WT/DS477/R  
WT/DS478/R  
 
22 December 2016 
(16-6998) Page: 1/280 
  Original: English  
 
 INDONESIA – IMPORTATION OF HORTI CULTURAL PRODUCTS,  
ANIMALS AND ANIMAL P RODUCTS  
REPORT OF THE PANEL  
 
 WT/DS477/R • WT/DS478/R  
 
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  TABLE OF CONTENTS  
 
1   INTRODUCTION  ................................ ................................ ................................ ........  18 
1.1   Complaints by New  Zealand and the United  States  ................................ ......................... 18 
1.2   Panel establishment and composition  ................................ ................................ ............ 18 
1.3   Panel procee dings  ................................ ................................ ................................ .......18 
1.3.1    General  ................................ ................................ ................................ .................. 18 
1.3.2    Request for enhanced third -party rights  ................................ ................................ .....19 
1.3.3    Request for a preliminary ruling  ................................ ................................ ................. 19 
2   FACTUAL ASPECTS ................................ ................................ ................................ ..... 19 
2.1   Introduction  ................................ ................................ ................................ ............... 19 
2.2   Indonesia's legal framework for the importation of horticultural products, animals 
and animal products  ................................ ................................ ................................ ........... 20 
2.2.1    Overarching legislative framewor k ................................ ................................ ............. 20 
2.2.1.1    Food Law  ................................ ................................ ................................ ............. 20 
2.2.1.2    Farmers Law  ................................ ................................ ................................ ........ 20 
2.2.1.3    Horticulture Law  ................................ ................................ ................................ ...21 
2.2.1.4    Animal Law  ................................ ................................ ................................ .......... 21 
2.2.2    Importation -related regulations adopted by Indonesia's Ministries of Trade and  
Agriculture in force at the time of the establishment of the Panel  ................................ ............. 22 
2.2.2.1    Import licensing procedures for horticultural products  ................................ ............... 22 
2.2.2.2    Import licensing procedures for animals and animal products  ................................ .....25 
2.2.3    Post-establishment regulations  ................................ ................................ .................. 27 
2.3   The measures at issue  ................................ ................................ ................................ 28 
2.3.1    Introduction  ................................ ................................ ................................ ............ 28 
2.3.2    Import licensing regime for horticultural products  ................................ ........................ 28 
2.3.2.1    Measure  1: Limited application windows and validity periods  ................................ ......28 
2.3.2.2    Measure  2: Periodic and fixed import terms  ................................ .............................. 29 
2.3.2.3    Measure  3: 80% realization requirement  ................................ ................................ .30 
2.3.2.4    Measure  4: Harvest period requirement  ................................ ................................ ...31 
2.3.2.5    Measure  5: Storage ownership and capacity requirements  ................................ ......... 32 
2.3.2.6    Measure  6: Use, sale and distribution requirements for horticultural products  ............... 32 
2.3.2.7    Measure  7: Reference prices for chillies and fresh shallots for consumption  .................. 33 
2.3.2.8    Measure  8: Six -month harvest requir ement  ................................ ............................. 34 
2.3.2.9    Measure  9: Import licensing regime for horticultural products as a whole  ..................... 34 
2.3.3    Import licensing regime f or animals and animal products  ................................ .............. 34 
2.3.3.1    Measure  10: Import prohibition of certain animals and animal products, except 
in "emergency circumstances"  ................................ ................................ ............................. 34 
2.3.3.2    Measure  11: Limited application windows and validity periods  ................................ ....35 
2.3.3.3    Measure  12: Periodic and fixed import terms  ................................ ............................ 35 
2.3.3.4    Measure  13: 80% realization requirement  ................................ ................................ 36 
2.3.3.5    Measure  14: Use, sale and distribution of imported bovine meat and offal  .................... 37 WT/DS477/R • WT/DS478/R  
 
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  2.3.3.6    Measure  15: Domestic purchase requirement for beef  ................................ ............... 38 
2.3.3.7    Measure  16: Beef reference price  ................................ ................................ ............ 39 
2.3.3.8    Measure  17: Import licensing regime for animals and animal products as a 
whole  ................................ ................................ ................................ ............................... 39 
2.3.4    Measure  18: Sufficiency of domestic production to fulfil domestic dema nd ...................... 40 
3   PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  ................................  40 
3.1   New Zealand  ................................ ................................ ................................ .............. 40 
3.2   United  States  ................................ ................................ ................................ ............. 41 
3.3   Indonesia  ................................ ................................ ................................ .................. 42 
4   ARGUMENTS OF THE PAR TIES  ................................ ................................ ...................  42 
5   ARGUMENTS OF THE THI RD PARTIES  ................................ ................................ ........  42 
6   INTERIM REVIEW  ................................ ................................ ................................ ...... 42 
6.1   Introduction  ................................ ................................ ................................ ............... 42 
6.2   Factual Aspects  ................................ ................................ ................................ .......... 42 
6.3   Structure of the findings  ................................ ................................ .............................. 43 
6.4   Whether certa in challenged measures are the results of decisions by private actors  ............ 43 
6.5   Whether an adverse trade effect test is necessary for a determination under 
Article  XI:1 of the GATT  1994 ................................ ................................ .............................. 43 
6.6   Evidentiary weight given to administrative practice vs. legal text  ................................ ......44 
6.7   Preliminary issues and claims pursuant Article XI: I of the GATT 1994  ............................... 45 
6.8   Claims pursuant Article XI:I of the GATT 1994  ................................ ............................... 46 
6.9   Incentives created by the measures at issue  ................................ ................................ ..46 
6.10   Whether Measure  1 (Limited application windows and validity periods) is 
inconsistent with Article XI:1 of the GATT  1994 ................................ ................................ .....47 
6.11   Whether Measure  3 (80% realization requirement) is inconsistent with Article  XI:1 
of the GATT  1994 ................................ ................................ ................................ ............... 48 
6.12   Whether Measure  5 (Storage ownership and capacity requirements) is incon sistent 
with Article  XI:1 of the GATT 1994  ................................ ................................ ....................... 49 
6.13   Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products) is inconsistent with Article  XI:1 of the GATT 1994  ................................ .................... 49 
6.14   Whether Measure  10 (Prohibition of importation of certain animals and animal 
products) is inconsistent with Article  XI:I of the GATT 1994  ................................ .................... 49 
6.15   Whether Measure  13 (80% realization requirement) is inconsistent with 
Article  XI:1 of the GATT 1994  ................................ ................................ .............................. 50 
6.16   Whether Measure  15 (Domestic purchase requirement for  beef) is inconsistent with 
Article  XI:1 of the GATT 1994  ................................ ................................ .............................. 50 
6.17   Whether Measure  16 (Beef reference price) is inconsistent with Article  XI:1 of the 
GATT  1994 ................................ ................................ ................................ ........................ 50 
6.18   Whether Measure  18 (Sufficiency of domestic production to fulfil domestic 
demand) is inconsistent with Article XI:1 of the GATT  1994 ................................ ..................... 50 
6.19   Whethe r Measure  3 (80% realization requirement) is justified under Article  XX(d) 
of the GATT  1994 ................................ ................................ ................................ ............... 50 
6.20   Whether Measure 4 ( Harvest period requirement ) is provisionally justified under 
Article XX (b) of the GATT 1994  ................................ ................................ ............................ 50 
6.21   Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products) is justified under Article  XX(d) of the GATT  1994 ................................ ..................... 51 WT/DS477/R • WT/DS478/R  
 
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  6.22   Conclusion concerning Indonesia's defence under Articles XX(a), (b) and (d) with 
respect to Measures 9 through 17  ................................ ................................ ........................ 51 
7   FINDINGS  ................................ ................................ ................................ .................  51 
7.1   Preliminary issues  ................................ ................................ ................................ .......51 
7.1.1    Request for enhanced third -party rights  ................................ ................................ .....51 
7.1.2    Request for a preliminary ruling  ................................ ................................ ................. 53 
7.1.3    Whether certain challenged measures are the result of decisions of private actors  ........... 53 
7.1.3.1    Introduction  ................................ ................................ ................................ ......... 53 
7.1.3.2    The relevant provision  ................................ ................................ ........................... 54 
7.1.3.3    Measures 1 and 11 (Limited application wi ndows and validity periods)  ......................... 54 
7.1.3.4    Measures 2 and 12 (Periodic and fixed import terms)  ................................ ................ 55 
7.1.3.5    Measures 3 and 13: 80%  realization requirement  ................................ ..................... 56 
7.1.3.6    Measure  5: Storage ownership and capacity requirements  ................................ ......... 57 
7.1.3.7    Conclusion  ................................ ................................ ................................ ........... 58 
7.1.4    Order of analysis  ................................ ................................ ................................ .....58 
7.2   Claims pursuant to Article XI:1 of the GATT 1994  ................................ ........................... 60 
7.2.1    Introduction  ................................ ................................ ................................ ............ 60 
7.2.2    The text of Article XI of the GATT 1994  ................................ ................................ ......60 
7.2.3    Legal standard under Article  XI:1 of the GATT  1994 ................................ ..................... 61 
7.2.3.1    Step 1: Whether the measure at issue falls within the scope of Article  XI:1 of 
the GATT  1994 ................................ ................................ ................................ .................. 61 
7.2.3.2    Step 2: Whether the measure at issue constitutes a prohibition or restriction on 
importation within the scope of Article XI:1 of the GATT 1994  ................................ ................. 62 
7.2.4    Preliminary issues  ................................ ................................ ................................ ....65 
7.2.4.1    Whether the measures at issue are outside the scope of Article  XI:1 because 
they are automatic import licensing procedures  ................................ ................................ .....65 
7.2.4.2    Indonesia's reliance upon Article XI:2(c)(ii) of the GATT  1994 ................................ ....67 
7.2.5    Whether Measure  1 (Limited application windows and validity periods) is 
inconsistent with Article XI:1 o f the GATT  1994 ................................ ................................ .....68 
7.2.5.1    Arguments of the parties  ................................ ................................ ....................... 68 
7.2.5.2    Analysis by the Panel  ................................ ................................ ............................. 71 
7.2.5.3    Conclusion  ................................ ................................ ................................ ........... 76 
7.2.6    Whether Measure  2 (Periodic and fixed import terms) is inconsistent with 
Article  XI:1 of the GATT  1994 ................................ ................................ .............................. 76 
7.2.6.1    Arguments of the parties  ................................ ................................ ....................... 76 
7.2.6.2    Analysis by the Panel  ................................ ................................ ............................. 78 
7.2.6.3    Conclus ion ................................ ................................ ................................ ........... 81 
7.2.7    Whether Measure  3 (80% realization requirement) is inconsistent with Article  XI:1 
of the GATT  1994 ................................ ................................ ................................ ............... 81 
7.2.7.1    Arguments of the parties  ................................ ................................ ....................... 81 
7.2.7.2    Analysis by the Panel  ................................ ................................ ............................. 83 
7.2.7.3    Conclusion  ................................ ................................ ................................ ........... 86 
7.2.8    Whether Measure  4 (Harvest period requirement) is inconsistent with Article  XI:1 
of the GATT 1994  ................................ ................................ ................................ ............... 86 
7.2.8.1    Arguments of the parties  ................................ ................................ ....................... 86 WT/DS477/R • WT/DS478/R  
 
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  7.2.8.2    Analysis by the Panel  ................................ ................................ ............................. 88 
7.2.8.3    Conclusion  ................................ ................................ ................................ ........... 91 
7.2.9    Whether Measure  5 (Storage ownership and capacity requirements) is inconsistent 
with Article  XI:1 of the GATT 1994  ................................ ................................ ....................... 92 
7.2.9.1    Arguments of the parties  ................................ ................................ ....................... 92 
7.2.9.2    Analysis by the Panel  ................................ ................................ ............................. 94 
7.2.9.3    Conclusion  ................................ ................................ ................................ ........... 96 
7.2.10    Whether Measure  6 (Use, sale and distribution requir ements for horticultural 
products) is inconsistent with Article  XI:1 of the GATT 1994  ................................ .................... 96 
7.2.10.1    Arguments of the parties  ................................ ................................ ...................... 96 
7.2.10.2    Analysis by the Panel  ................................ ................................ ........................... 99 
7.2.10.3    Conclusion  ................................ ................................ ................................ ....... 101 
7.2.11    Whether Measure  7 (Reference prices for chillies and fres h shallots) is 
inconsistent with Article  XI:1 of the GATT  1994 ................................ ................................ ... 101 
7.2.11.1    Arguments of the parties  ................................ ................................ ....................  101 
7.2.11.2    Analysis b y the Panel  ................................ ................................ .........................  104 
7.2.11.3    Conclusion  ................................ ................................ ................................ ....... 109 
7.2.12    Whether Measure  8 (Six -month harvest requirement) is inconsistent with 
Article XI:I of the GATT 1994  ................................ ................................ ............................  109 
7.2.12.1    Arguments of the Parties  ................................ ................................ ....................  109 
7.2.12.2    Analysis by the Panel  ................................ ................................ .........................  110 
7.2.12.3    Conclusion  ................................ ................................ ................................ ....... 112 
7.2.13    Whether Measure  9 (Indonesia's import licensing regime for horticultural 
products as a whole) is inconsistent with A rticle XI:1 of the GATT 1994  ................................ .. 112 
7.2.13.1    Arguments of the parties  ................................ ................................ ....................  112 
7.2.13.2    Analysis by the Panel  ................................ ................................ .........................  116 
7.2.13.3    Conclusion  ................................ ................................ ................................ ....... 119 
7.2.14    Whether Measure  10 (Prohibition of importation of certain animals and animal 
products) is inconsistent with Art icle XI:I of the GATT 1994  ................................ ..................  119 
7.2.14.1    Arguments of the parties  ................................ ................................ ....................  119 
7.2.14.2    Analysis by the Panel  ................................ ................................ .........................  123 
7.2.14.3    Conclusion  ................................ ................................ ................................ ....... 126 
7.2.15    Whether Measure  11 (Limited application windows and validity periods) is 
inconsistent with Article  XI:1 of the GA TT 1994  ................................ ................................ ... 126 
7.2.15.1    Arguments of the parties  ................................ ................................ ....................  126 
7.2.15.2    Analysis by the Panel  ................................ ................................ .........................  130 
7.2.15.3    Conclusion  ................................ ................................ ................................ ....... 134 
7.2.16    Whether Measure  12 (Periodic and fixed import terms) is inconsistent with 
Article  XI:1 of the GATT 1994  ................................ ................................ ............................  134 
7.2.16.1    Arguments of the parties  ................................ ................................ ....................  134 
7.2.16.2    Analysis by the Panel  ................................ ................................ .........................  137 
7.2.16.3    Conclusion  ................................ ................................ ................................ ....... 139 
7.2.17    Whether Measure  13 (80% realization requirement) is inconsistent with 
Article  XI:1 of the GATT 1994  ................................ ................................ ............................  139 
7.2.17.1    Arguments of the parties  ................................ ................................ ....................  139 WT/DS477/R • WT/DS478/R  
 
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  7.2.17.2    Analysis by the Panel  ................................ ................................ .........................  143 
7.2.17.3    Conclusion  ................................ ................................ ................................ ....... 145 
7.2.18    Whether Measure  14 (Use, sale and distribution of imported bovine meat and 
offal requirements) is inconsistent with Article  XI: 1 of the GATT 1994  ................................ ... 145 
7.2.18.1    Arguments of the Parties  ................................ ................................ ....................  145 
7.2.18.2    Analysis by the Panel  ................................ ................................ .........................  148 
7.2.18.3    Conclusion  ................................ ................................ ................................ ....... 151 
7.2.19    Whether Measure  15 (Domestic purchase requirement for beef) is inconsistent 
with Article  XI:1 of the GATT 1994  ................................ ................................ .....................  151 
7.2.19.1    Arguments o f the Parties  ................................ ................................ ....................  151 
7.2.19.2    Analysis by the Panel  ................................ ................................ .........................  156 
7.2.19.3    Conclusion  ................................ ................................ ................................ ....... 158 
7.2.20    Whether Measure  16 (Beef reference price) is inconsistent with Article  XI:1 of 
the GATT  1994 ................................ ................................ ................................ ................  158 
7.2.20.1    Arguments of the Parties  ................................ ................................ ....................  158 
7.2.20.2    Analysis by the Panel  ................................ ................................ .........................  160 
7.2.20.3    Conclusion  ................................ ................................ ................................ ....... 163 
7.2.21    Whether Measure  17 (Import licensing regime for animals and animal products 
as a whole) is inconsistent with Article  XI:1 of the GATT 1994  ................................ ...............  163 
7.2.21.1    Arguments of the Parties  ................................ ................................ ....................  163 
7.2.21.2    Analysis by the Panel  ................................ ................................ .........................  166 
7.2.21.3    Conclusion  ................................ ................................ ................................ ....... 169 
7.2.22    Whether Measure  18 (Su fficiency of domestic production to fulfil domestic 
demand) is inconsistent with Article XI:1 of the GATT  1994 ................................ ...................  169 
7.2.22.1    Arguments of the Parties  ................................ ................................ ....................  169 
7.2.22.2    Analysis by the Panel  ................................ ................................ .........................  171 
7.2.22.3    Conclusion  ................................ ................................ ................................ ....... 174 
7.3   Indonesia's defences under Artic le XX of the GATT  1994 ................................ ...............  174 
7.3.1    Preliminary remarks  ................................ ................................ ...............................  174 
7.3.2    Admissibility of Indonesia's defences due to late introductio n and lack of 
argumentation  ................................ ................................ ................................ .................  175 
7.3.3    Admissibility of Indonesia's unsubstantiated defences  ................................ ................  177 
7.3.4    Order of analysis of I ndonesia's defences under Article XX(a), (b) and (d) of the 
GATT  1994 ................................ ................................ ................................ ......................  178 
7.3.5    Whether Measure  1 (Application windows and validity periods) is justified under 
Article  XX(d) of the GATT  1994 ................................ ................................ ..........................  179 
7.3.5.1    Arguments of the Parties  ................................ ................................ .....................  179 
7.3.5.2    Analysis by the Panel  ................................ ................................ ...........................  193 
7.3.6    Whether Measure  2 (Periodic and fixed import terms) is justified under 
Article  XX(d) of the GATT  1994 ................................ ................................ ..........................  202 
7.3.6.1    Arguments of the parties  ................................ ................................ .....................  202 
7.3.6.2    Analysis by the Panel  ................................ ................................ ...........................  204 
7.3.7    Whether Measure  3 (80% realization requirement) is justified under Article  XX(d) 
of the GATT  1994 ................................ ................................ ................................ .............  204 
7.3.7.1    Arguments of the parties  ................................ ................................ .....................  204 WT/DS477/R • WT/DS478/R  
 
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  7.3.7.2    Analysis by the Panel  ................................ ................................ ...........................  207 
7.3.8    Whether Measure  4 (Indonesia's harvest period requirements) is justified under 
Article  XX(b) of the GATT  1994 ................................ ................................ ..........................  207 
7.3.8.1    Arguments of the parties  ................................ ................................ .....................  207 
7.3.8.2    Analysis by the Panel  ................................ ................................ ...........................  210 
7.3.9    Whether Measure  5 (Storage ownership and capacity requirement) is justified 
under Article  XX(a) of the GATT  1994 ................................ ................................ .................  215 
7.3.9.1    Arguments of the Parties  ................................ ................................ .....................  215 
7.3.9.2    Analysis by the Panel  ................................ ................................ ...........................  218 
7.3.10    Whether Measure  5 (Storage ownership and capacity requirement) is justified 
under Article  XX(b) of the GATT  1994 ................................ ................................ .................  222 
7.3.10.1    Arguments of the Parties  ................................ ................................ ....................  222 
7.3.10.2    Analysis by the Panel  ................................ ................................ .........................  225 
7.3.11    Whether Measure  5 (Storage ownership and capacity requirement) is justified 
under Article  XX(d) of the GATT  1994 ................................ ................................ .................  228 
7.3.11.1    Arguments of the parties  ................................ ................................ ....................  228 
7.3.11.2    Analysis by the Panel  ................................ ................................ .........................  230 
7.3.12    Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products) is justified under Article  XX(a) of the GATT  1994 ................................ ...................  230 
7.3.12.1    Arguments of the Parties  ................................ ................................ ....................  230 
7.3.12.2    Analysis by the Panel  ................................ ................................ .........................  233 
7.3.13    Whether Measure  6 (Use, sale and distributi on requirements for horticultural 
products) is justified under Article  XX(b) of the GATT  1994 ................................ ...................  237 
7.3.13.1    Arguments of the Parties  ................................ ................................ ....................  237 
7.3.13.2    Analysis by the Panel  ................................ ................................ .........................  239 
7.3.14    Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products) is justified under Article  XX(d) of the GATT  1994 ................................ ...................  242 
7.3.14.1    Arguments of the Parties  ................................ ................................ ....................  242 
7.3.14.2    Analysis by the Panel  ................................ ................................ .........................  244 
7.3.15    Whether Measure  7 (Reference prices for chillies and shallots for consumption) is 
justified under Article  XX(b) of the GATT  1994 ................................ ................................ ..... 244 
7.3.15.1    Arguments of the Part ies ................................ ................................ ....................  244 
7.3.15.2    Analysis by the Panel  ................................ ................................ .........................  247 
7.3.16    Whether Measure  8 (Six -month harvest requirement) is justified under 
Article XX(b) of the GATT  1994 ................................ ................................ ..........................  251 
7.3.16.1    Arguments of the Parties  ................................ ................................ ....................  251 
7.3.16.2    Analysis by the Panel  ................................ ................................ .........................  254 
7.3.17    Conclusion concerning Indonesia's defences under Articles XX(a), (b) and (d) 
with respect to Measures 9 through 17  ................................ ................................ ...............  267 
7.4   Claims pursuant  to Article  4.2 of the Agreement on Agriculture  ................................ ...... 267 
7.4.1    Arguments of the Parties  ................................ ................................ ........................  267 
7.4.2    Analysis by the Panel  ................................ ................................ .............................  267 
7.5   Claims pursuant to Article III:4 of the GATT  1994 ................................ ........................  268 
7.5.1    Introduction  ................................ ................................ ................................ ..........  268 
7.5.2    Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products) is inconsistent with Article III:4 of the GATT  1994 ................................ .................  268 WT/DS477/R • WT/DS478/R  
 
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  7.5.2.1    Arguments of th e Parties  ................................ ................................ .....................  268 
7.5.2.2    Analysis by the Panel  ................................ ................................ ...........................  269 
7.5.3    Whether Measure  14 (Use, sale and distribution of imported bovine meat  and offal 
requirements) is inconsistent with Article III:4 of the GATT 1994  ................................ ...........  269 
7.5.3.1    Arguments of the Parties  ................................ ................................ .....................  269 
7.5.3.2    Analysis by the Panel  ................................ ................................ ...........................  270 
7.5.4    Whether Measure  15 (Domestic purchase requirement for beef) is inconsistent 
with Article  III:4 of the GATT 1994  ................................ ................................ ....................  271 
7.5.4.1    Arguments of the Parties  ................................ ................................ .....................  271 
7.5.4.2    Analysis by the Panel  ................................ ................................ ...........................  272 
7.6   Claims under the Import  Licensing Agreement  ................................ .............................  272 
7.6.1    Introduction  ................................ ................................ ................................ ..........  272 
7.6.2    Whether Measures  1 and 11 (Limited application windows and validity pe riods) 
are inconsistent with Article  3.2 of the Import Licensing Agreement  ................................ ....... 272 
7.6.2.1    Arguments of the Parties  ................................ ................................ .....................  272 
7.6.2.2    Analysis by the Panel  ................................ ................................ ...........................  278 
8   CONCLUSIONS AND RECO MMENDATION(S)  ................................ ............................  279  
 WT/DS477/R • WT/DS478/R  
 
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  LIST OF ANNEXES  
ANNEX  A 
PRELIMINARY RULING O F THE PANEL  
Contents  Page  
Annex  A-1 Preliminar y Ruling  of the Panel  A-1 
 
ANNEX  B 
WORKING PROCEDURES O F THE PANEL  
Contents  Page  
Annex  B-1 Working Procedures of the Panel  B-1 
ANNEX C  
ARGUMENTS OF THE PAR TIES 
NEW ZEALAND  
Contents  Page  
Annex  C-1 First part of the executive summary of the arguments of  New Zealand  C-2 
Annex  C-2 Second part of the executive summary of the arguments of New Zealand  C-14 
 
UNITED STATES  
Contents  Page  
Annex  C-3 First part of the  executive  summary of the  arguments of the  United States   C-27 
Annex  C-4 Second part of the exe cutive summary of the arguments  of the United States  C-39 
 
INDONESIA  
Contents  Page  
Annex  C-5 First part of the executive summary of  the arguments of Indonesia  C-51 
Annex  C-6 Second part of the executive summary of the arguments of Indonesia  C-57 
 
ANNEX  D 
ARGUMENTS OF THE THI RD PARTIES  
Contents  Page  
Annex  D-1 Executive summary of the arguments of Argentina  D-2 
Annex  D-2 Executive summary of the arguments of Australia  D-4 
Annex  D-3 Executive summary of the arguments of Brazil  D-9 
Annex D -4 Executive s ummary of the arguments of Canada  D-12 
Annex D -5 Executive summary of the arguments of the European Union  D-14 
Annex D -6 Executive summary of the arguments of Japan  D-17 
Annex D -7 Executive summary of the arguments of Korea  D-21 
Annex D -8 Executive sum mary of the arguments of Norway  D-22 
Annex D -9 Executive summary of the arguments of Paraguay  D-25 
Annex  D-10 Executive summary of the arguments of Chinese Taipei  D-26 WT/DS477/R • WT/DS478/R  
 
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  ANNEX  E 
IMPORT LICENSING PRO CEDURES FOR HORTICUL TURAL PRODUCTS  AND FOR ANIMALS AND 
ANIMAL PRODUCTS  
Contents  Page  
Annex  E-1 Flow chart concerning Indonesia's Import Licensing Procedures for Horticultural 
Products  E-2 
Annex  E-2 Flow chart concerning Indonesia's Import Licensing Procedures for Animals and 
Animal Products  E-3 
  WT/DS477/R • WT/DS478/R  
 
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  WTO CASES C ITED IN THIS REPORT  
 
Short Title  Full Case Title and Citation  
Argentina – Hides and 
Leather  Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and 
Import of Finished Leather , WT/DS155/R  and Corr.1 , adopted 16 February 2001, 
DSR 2001:V, p. 1779  
Argentina – Import Measures  Appellate Body Reports, Argentina – Measures Affecting the Importation of Goods , 
WT/DS438/AB/R  / WT/DS444/AB/R  / WT/DS445/AB/R , adopted 26 January 2015  
Argentina – Import Measures  Panel Reports, Argentina – Measures Affecting the Importation of Goo ds, 
WT/DS438/R  and Add.1 / WT/DS444/R  and Add.1 / WT/DS445/R  and Add.1, 
adopted 26 January 2015, as modified (WT/DS438/R) and upheld (WT/DS444/R / 
WT/DS445/R) by Appellate Body Reports WT/DS438/AB/R / WT/DS444/AB/R / 
WT/DS445 /AB/R  
Brazil – Retreaded Tyres  Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/AB/R , adopted 17 December 2007, DSR 2007:IV, p. 1527  
Brazil – Retreaded Tyres  Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres , 
WT/DS332/R , adopted 17 December 2007, as modified by Appellate Body Report 
WT/DS332/AB/R, DSR 2007:V, p. 1649  
Canada – Renewable Energy  
/ Canada – Feed-in Tariff 
Program  Panel Reports, Canada – Certain Measures Affecting the Renewable Energy 
Generation Sector / Canada – Measures Relating to the Feed -in Tariff Program , 
WT/DS412/R  and Add.1 / WT/DS426/R  and Add.1, adopted 24 May 2013, as 
modified by Appellate Body Reports WT/DS412/AB/R / WT/DS426/AB/R, DSR 
2013:I, p. 237  
Canada – Wheat Exports and 
Grain Imports  Appellate Body Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/AB/R , adopted 27 September 2004, 
DSR 2004:VI, p. 2739  
Canada – Wheat Exports and 
Grain Imports  Appellate Body Report, Canada – Measures Relating to Exports of Wheat and 
Treatment of Imported Grain , WT/DS276/AB/R , adopted 27 September 2004, 
DSR 2004:VI, p. 2739  
Chile – Price Band System  Appellate Body Report, Chile – Price Band System and Safeguard Measures 
Relating to Certain Agricultural Products , WT/DS207/AB/R , adopted 23 October 
2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)  
Chile – Price Band System  Panel Report, Chile – Price Band System and Safeguard Measures Relating to 
Certain Agricultural Products , WT/DS207/R , adopted 23 October 2002, as 
modified by Appellate Body Report WT/DS207AB/R,  DSR 2002:VIII, p. 3127  
China – Auto Parts  Panel Reports, China – Measures Affecting Imports of Automobile Parts , 
WT/DS339/R , Add.1 and Add.2 / WT/DS3 40/R, Add.1 and Add.2 / WT/DS342/R , 
Add.1 and Add.2, adopted 12 January 20 09, upheld (WT/DS339/R) and as 
modified (WT/DS340/R / WT/DS342/R) by Appellate Body Reports 
WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, DSR 2009:I, p. 119  
China – Rare Earths  Panel Reports, China – Measures Related to the Exportation of Rare Earths, 
Tungsten, and Molybdenum , WT/DS431/R  and Add.1 / WT/DS432/R  and Add.1 / 
WT/DS433/R  and Add.1, adopted 29 August 2014, upheld by Appellate Body 
Reports WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R, DSR 2014:IV, p. 
1127 
China – Raw Materials  Appellate Body Reports, China – Measures Related to the Exportation of Various 
Raw Materials , WT/DS394/AB/R  / WT/DS395/AB/R  / WT/DS398/AB/R , adopted 22 
February 2012, DSR 2012:VII, p. 3295  
China – Raw Materials  Panel Reports, China – Measures Related to the Exportation of Various Raw 
Materials , WT/DS394/R , Add.1 and Corr.1 / WT/DS395/R , Add.1 a nd Corr.1 / 
WT/DS398/R , Add.1 and Corr.1, adopted 22 February 2012, as modi fied by 
Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, 
DSR 2012:VII, p. 3501  
Colombia – Ports of Entry  Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry , 
WT/DS366/R  and Corr.1, adopted 20 May 2009, DSR 2009:VI, p. 2535  
Dominican Republic – Import 
and Sale of Cigarettes  Appellat e Body Report, Dominican Republic – Measures Affecting the Importation 
and Internal Sale of Cigarettes , WT/DS302/AB/R , adopted 19 May 2005, DSR 
2005:XV, p. 7367  WT/DS477/R • WT/DS478/R  
 
- 12 - 
 
  Short Title  Full Case Title and Citation  
Dominican Republic – Import 
and Sale of Cigarettes  Panel Report, Dominican Republic – Measures Affecting the Importation and 
Internal Sale of Cigarettes , WT/DS302/R , adopted 19 May 2005, as modified by 
Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, p. 7425  
Dominican Republic – 
Safeguard Measures  Panel Report, Dominican Republic – Safeguard Measures on Imports of 
Polypropylene Bags and Tubular Fabric , WT/DS415/R , WT/DS416/R , 
WT/DS417/R , WT/DS418/R , and Add.1, adopted 22 February 2012, DSR 
2012:XIII, p. 6775  
EC – Bananas III  Appellate  Body Report, European Communities – Regime for the Importation, Sale 
and Distribution of Bananas , WT/DS27/AB/R , adopted 25 September 1997, DSR 
1997:II, p. 591  
EC – Bananas III 
(Guatemala and Honduras)  Panel Report, European Communities – Regime for the Importation, Sale and 
Distribution of Bananas, Complaint by Guatemala and H onduras , 
WT/DS27/R/GTM , WT/DS27/R/HND , adopted 25 September 1997, as modified by 
Appellate Body Report WT/DS27/AB/R, DSR 1997:II, p. 695  
  
EC – Export Subsidies on 
Sugar (Australia)  Panel Report, European Communities – Export Subsidies on Sugar, Complaint by 
Australia , WT/DS265/R , adopted 19 May 2005, as modified by Appellate Body 
Report WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIII, p. 
6499 
EC – Export Subsidies on 
Sugar (Brazil)  Panel Report, European Comm unities – Export Subsidies on Sugar, Complaint by 
Brazil , WT/DS266/R , adopte d 19 May 2005, as modified by Appellate Body Report 
WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIV, p. 6793  
EC – Export Subsidies on 
Sugar (Thailand)  Panel Report, European Communities – Export Subsidies on Sugar, Complaint by 
Thailand , WT/DS283/R , adopted 19 May 2005, as modified by Appellate Body 
Report WT/DS265/AB/R , WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIV, p. 
7071 
EC – Hormones  Appellate Body Report, EC Measures Concerning Meat and Meat Products 
(Hormones) , WT/DS26/AB/R , WT/DS48/AB/R , adopted 13 February 1998, DSR 
1998:I, p. 135  
EC – Hormones (Canada)  Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), 
Complaint by Canada , WT/DS48/R/CAN , adopted 13 February 1998, as modified 
by Appellate Body Report WT/DS26/AB/R, WT/DS48/AB/R, DSR 1998:II, p. 235  
EC – Poultry Panel Report, European Communities – Measures Affecting the Importation of 
Certain Poultry Products , WT/DS69/R , adopted 23 July 1998, as modified by 
Appellate Body Report WT/DS69/AB/R, DSR 1998:V, p. 2089  
EC – Seal Products  Appellate Body Reports, European Communities – Measures Prohibiting the 
Importation and Marketing of Seal  Products , WT/DS400/AB/R  / WT/DS401/AB/R , 
adopted 18 June 2014, DSR 2014:I, p. 7  
EC – Seal Products  Panel Reports, European Communities – Measures Prohibiting the Importation and 
Marketing of Seal Products , WT/DS400/R  and Add.1 / WT/DS401/R  and Add.1, 
adopted 18 June 2014, as modified by App ellate Body Reports WT/DS400/AB/R / 
WT/DS401/AB/R, DSR 2014:II, p. 365  
EC – Tariff Preferences  Panel Report, European Communities – Conditions for the Granting of Tariff 
Preferences to Developing Countries , WT/DS246/R , adopted 20 April 2004, as 
modified by Appellate Body Report WT/DS246/AB/R, DSR 2004:III, p. 1009  
EC – Trademark s and 
Geographical Indications  Panel Reports,  European Communities – Protection of Trademarks and 
Geographical Indications for Agricultural Products and Foodstuffs , WT/DS290/R 
(Australia)  / WT/DS174/R (US), adopted 20 April 2005, DSR 2005:VIII, p. 3499 / 
DSR 2005: X, p. 4603 
EC and certain member 
States – Large Civil Aircraft  Panel Report, European Communities and Certain Member States – Measures 
Affecting Trade in Large Civil Aircraft , WT/DS316/R , adopted 1 June 2011, as 
modified by Appellate Body Report, WT/DS316/AB/R, DSR 2011:II, p. 685  
India – Additional Import 
Duties  Appell ate Body Report, India – Additional and Extra -Additional Duties on Imports 
from the United States , WT/DS360/AB/R , adopted 17 November 2008, DSR 
2008:XX, p. 8223  
India – Autos  Panel Report, India – Measures Affecting the Automotive Sector , WT/DS146/R , 
WT/DS175/R , and Corr.1, adopted 5 April 2002, DSR 2002:V, p. 1827  
India – Quantitative 
Restrictions  Panel Report, India – Quantitative Restrictions on Imports of Agricultural, Textile 
and Industrial Products , WT/DS90/R , adopted 22 September 1999, upheld by 
Appellate Body Report WT/DS90/AB/R, DSR 1999:V , p. 1799  
Japan – Alcoholic Beverages 
II Appellate Body Report, Japan – Taxes on Alcoholic Beverages , WT/DS8/AB/R , 
WT/DS10/AB/R , WT/DS11/AB/R , adopted 1 November 1996, DSR 1996:I, p. 97  WT/DS477/R • WT/DS478/R  
 
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  Short Title  Full Case Title and Citation  
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and Paper , 
WT/DS44/R , adopted 2 2 April 1998, DSR 1998:IV, p. 1179  
Korea – Alcoholic Beverages  Appellate Body Report, Korea – Taxes on Alcoholic Beverages , WT/DS75/AB/R , 
WT/DS84/AB /R, adopted 17 February 1999, DSR 1999:I, p. 3  
Korea – Various Measures on 
Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and 
Frozen Beef , WT/DS161/AB/R , WT/DS169/AB/R , adopted 10 January 2001, DSR 
2001:I, p. 5  
Korea – Various Measures on 
Beef Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen 
Beef, WT/DS161/R , WT/DS169/R , adopted 10 January 2001, as modified by 
Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, DSR 2001:I, p. 59  
Mexico – Taxes on Soft 
Drinks  Appellate Body Report, Mexico – Tax Measures on Soft Drinks and Other 
Beverages , WT/DS308/AB/R , adopted 24 March 2006, DSR 2006:I, p. 3  
Peru – Agricultural Products  Appellate Body Report, Peru – Additional Duty on Imports of Certain Agricultural 
Products , WT/DS457/AB/R  and Add.1, adopted 31 July 2015  
Thailand – Cigarettes 
(Philippines)  Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes 
from the  Philippines , WT/DS371/AB/R , adopted 15 July 2011 , DSR 2011:IV, p. 
2203 
Turkey – Rice Panel Report, Turkey – Measures Affecting the Importation of Rice , WT/DS334/R , 
adopted 22 October 2007, DSR 2007:VI, p. 2151  
Turkey – Textiles  Panel Report, Turkey – Restrictions on Imports of Textile and Clothing Products , 
WT/DS34/R , adopted 19 November 1999, as modified by Appellate Body Report 
WT/DS34/AB/R, DSR 1999:VI, p. 2363  
US – 1916 Act  Appellate Body Report, United States – Anti-Dumping Act of 1916 , 
WT/DS136/AB/R , WT/DS162/AB/R , adopted 26 September 2000, DSR 2000:X, p. 
4793 
US – Carbon Steel  Appellate Body Report, United S tates – Countervailing Duties on Certain 
Corrosion -Resistant Carbon Steel Flat Products from Germany , WT/DS213/AB/R  
and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779  
US – COOL  Appellate Body Reports, United States – Certain Country of Origin Labelling 
(COOL) Requirements , WT/DS384/AB/R  / WT/DS386/AB/R , adopted 23 July 
2012, DSR 2012:V, p. 2449  
US – Corrosion -Resistant 
Steel Sunset Review  Appellate Body Report, United States – Sunset Review of Anti -Dumping Duties on 
Corrosion -Resistant Carbon Steel Flat Products from Japan , WT/DS 244/AB/R , 
adopted 9 January 2004, DSR 2004:I, p. 3  
US – FSC (Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales 
Corporations " – Recourse to Article 21.5 of the DSU by the European 
Communities , WT/DS108/AB/RW , adopted 29 January 2002, DSR 2002:I, p. 55  
US – Gambling  Appellate Body Repo rt, United States – Measures Affecting the Cross -Border 
Supply of Gambling and Betting Services , WT/DS285/AB/R , adopted 20 April 
2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)  
US – Gasoline  Appellate Body Report, United States – Standards for Reformulated and 
Conventional Gasoline , WT/DS2/AB/R , adopted 20 May 1996, DSR 1996:I, p. 3  
US – Lamb  Panel Report, United States – Safeguard Measures on Imports of Fresh, Chilled or 
Frozen Lamb Meat from New Zealand and Australia , WT/DS177/R , WT/DS178/R , 
adopted 16 May 2001, as modified by Ap pellate Body Report WT/DS177/AB/R, 
WT/DS178/AB/R, DSR 2001:IX, p. 4107  
US – Poultry (China)  Panel Report, United States – Certain Measures Affecting Imports of Poultry from 
China , WT/DS392/R , adopted 25 October 2010, DSR 2010:V, p. 1909  
US – Shrimp  Appellate Body Report, United States – Import Prohibition of Certain Shrimp and 
Shrimp Products , WT/DS58/AB/R , adopted 6 November 1998, DSR 1998:VII, p. 
2755 WT/DS477/R • WT/DS478/R  
 
- 14 - 
 
  Short Title  Full Case Title and Citation  
US – Shrimp (Thailand) / US 
– Customs Bond Directive  Appellate Body Report, United States – Measures Relating to Shrimp from 
Thailand / United States – Customs Bond Directive for Merchandise Subject to 
Anti-Dumping/Countervailing Duties , WT/DS343/AB/R  / WT/DS345/AB/R , 
adopted 1 August 2008, DSR 2008:VII, p. 2385 / DSR 2008:VIII, p. 2773  
US – Shrimp (Thailand)  Panel Report, United States – Measures Relating to Shrimp from Thailand , 
WT/DS343/R , adopted 1 August 2008, as modified by Appellate Body Report 
WT/DS343/AB/R / WT/DS345/AB/R, DSR 2008:VII, p. 2539  
US – Underwear  Panel Report, United States – Restrictions on Imports of Cotton and Man -made 
Fibre Underwear , WT/DS24/R , adopted 25 February 1997, as modified by 
Appellate Body Report WT/DS24/AB/R, DSR 1997:I, p. 31  
US – Wool Shirts and 
Blous es Appellate Body Report, United States – Measure Affecting Imports of Woven Wool 
Shirts and Blouses from India , WT/DS33/AB/R , adopted 23 May 1997, and Corr.1, 
DSR 1997:I, p. 323  
 
 WT/DS477/R • WT/DS478/R  
 
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  GATT CASES CITED IN THIS REPORT  
 
Short Title  Full Case Title and Citation  
Canada – Provincial Liquor 
Boards (EEC)  GATT Panel Report, Canada – Import, Distribution and Sale of Alcoholic Drinks by 
Canadian Provincial Marketing Agencies , L/6304 , adopted 22  March 1988, 
BISD 35S/37  
Canada – Provincial Liquor 
Boards (US)  GATT Panel Report, Canada – Import, Distribution and Sale of Certain Alcoholic 
Drinks by Provincial Marketing Agencies , DS17/R, adopted 18  February 1992, 
BISD 39S/27  
EEC – Minimum Import 
Prices  GATT Panel Report, EEC – Programme of Minimum Import Prices, Licences and 
Surety Deposits for Certain Processed Fruits and Vegetables , L/4687, a dopted 18 
October 1978, BISD 25S/68  
Japan – Leather (US II)  GATT Panel Report , Panel on Japanese Measures on Imports of Leather, L/5623, 
adopted 15 May 1984, BISD 31S/94  
Japan – Semi-Conductors  GATT Panel Report, Japan – Trade in Semi -Conductors , L/6309,  adopted 
4 May 1988, BISD  35S/116  
 
  WT/DS477/R • WT/DS478/R  
 
- 16 - 
 
  ABBREVIATIONS USED I N THIS  REPORT  
Abbreviation  Description  
ASEIBSSINDO  Indonesian association of horticultural product importers  
Animal Law   Law of the Republic of Indonesia Number 18 of 2009 on Animal 
Husbandry a nd Animal Health  
Animal Law Amendment  Law of the Republic of Indonesia Number  41 of  2014 Concerning 
Amendment of Law Number 18 of 2009 Concerning Husbandry and 
Animal Health  
API Importer Registration Number  
API-U Importer Registration Number for compani es importing certain 
goods for trading purposes  
API-P Importer Registration Number for companies importing goods for 
their own consumption  
BULOG  Indonesia's Logistics Agency  
DSB Dispute Settlement Body  
DSU  Understanding on Rules and Procedures Governi ng the Settlement 
of Disputes  
Farmers Law  Law of the Republic of Indonesia Number 19 of 2013 Concerning 
Protection and Empowerment of Farmers  
Food Law  Law of the Republic of Indonesia Number 18 of 2012 Concerning 
Food 
GATT  1994  General Agreement on Tar iffs and Trade 1994  
Horticulture Law  Law of the Republic of Indonesia Number 13 of 2010 Concerning 
Horticulture  
Import Licensing Agreement  Agreement on Import Licensing Procedures  
INATRADE  Trade Licensing Services Using Electronic and Online System  
INSW Indonesia National Single Window  
UPP Trade Services Unit  
MOA Ministry of Agriculture  
MOA 86/2013  Regulation of the Minister of Agriculture Number 
86/Permentan/OT.140/8/2013 Concerning Import 
Recommendation of Horticulture Products, of 30 August 2013  
MOA 139/2014, as amended  Regulation of the Minister of Agriculture Number 
139/Permentan/PD.410/12/2014 Concerning Importation of 
Carcasses, Meats, and/or Their Processed Products into the 
Territory of the Republic of Indonesia, of 24 December 2014 
amended  by Regulation of the Minister of Agriculture Number 
02/Permentan/PD.410/1/2015, of 22 January 2015  
MOA Recommendation  Recommendation from the Ministry of Agriculture  
MOT Ministry of Trade  
MOT 16/2013, as amended  Regulation of the Minister of Trade Numb er 16/M -DAG/PER/4/2013 
Concerning Provisions on the Import of Horticultural Products, of 
22 April 2013, amended by Regulation of the Minister of Trade 
Number 47/M -DAG/PER/8/2013 Concerning Amendment of 
Regulation of the Minister of Trade Number 16/M -
DAG/PE R/4/2013, of 30 August 2013  
MOT 46/2013, as amended  Regulation of the Minister of Trade Number 46/M -DAG/PER/8/2013 
Concerning Provisions on the Import and Export of Animals and 
Animal Products, of 30 August 2013, amended by Regulation of 
the Minister of T rade No. 57/M -DAG/PER/9/2013, of 26 September 
2013 and by Regulation of the Minister of Trade 17/M -
DAG/PER/3/2014, of 27 March 2014  
MUI Indonesian Council of Ulama  
PI Producer Importer of Horticultural Products  
REIPPT  Export Import Recommendation for C ertain Agricultural Products  
RI Registered Importer of Horticultural Products  WT/DS477/R • WT/DS478/R  
 
- 17 - 
 
  Abbreviation  Description  
RIPH Horticultural Products Import Recommendation ( Rekomendasi 
Impor Produk Hortikultura)  
SPS Agreement  Agreement on Sanitary and Phytosanitary Measures  
TBT Agreement  Agree ment on Technical Barriers to Trade  
 WT/DS477/R • WT/DS478/R  
 
- 18 - 
 
  1  INTRODUCTION  
1.1  Complaint s by New Zealand  and the United  States  
1.1.  On 8 May 2014, New Zealand  and the United  States  (the co -complainants)  requested 
consultations with Indonesia pursuant to Articles 1 and 4 of the Understand ing on Rules and 
Procedures Governing the Settlement of Disputes  (DSU) , Article XXII of the General Agreement on 
Tariffs and Trade 1994  (GATT  1994), Article 19 of the  Agreement on Agriculture , Article 6 of the 
Agreement on Import Licensing Procedures  (Impo rt Licensing Agreement), and Articles 7 and 8 of 
the Agreement on Preshipment Inspection  concerning certain measures imposed by Indonesia on 
the importation of horticultural products and animals and animal products into Indonesia.1  
1.2.  The co -complainants held consultations w ith Indonesia in Jakarta on 19 June 2014 but failed 
to resolve the dispute.2 
1.2  Panel establishment and composition  
1.3.  On 18 March 2015, the co -complainants requested the establishment of a panel pursuant to 
Article  6 of the DSU with standard te rms of reference.3 At its meeting on 20 May 2015, the Dispute 
Settlement Body (DSB ) established a single panel pursuant to the request s of the co -complainants, 
in accordance with Article  9.1 of the DSU.4 
1.4.  The Panel's terms of reference are the following:  
To examine, in the light of the relevant provisions of the covered agreements cited by 
the parties to the dispute, the matter referred t o the DSB by New Zealand  in 
document WT/DS 477/9, and the United  States  in document WT/DS478/9, and to 
make such findings a s will assist the DSB in making the recommendations or in giving 
the rulings pr ovided for in those agreements.5 
1.5.  On 28 September 2015 , the co -complainants  requested the Director -General to determine 
the composition of the Panel, pursuant to parag raph 7 of A rticle 8 of the DSU.  On 8 October 2015 , 
the Director -General accordingly composed the Panel as follows:  
 Chairman:  Mr Cristian Espinosa Cañizares  
 Members:  Mr Gudmundur Helgason  
   Ms Angela María Orozco Gómez  
1.6.  Argentina; Australia , Brazil , Canada , China,  the European Union , India, Japan , Korea,  
Norway , Paraguay , Singapore , Chinese Taipei , and Thailand reserved their rights to participate in 
the panel proceedings as third parties.6  
1.3  Panel proceedings  
1.3.1   General  
1.7.  On 28 October 2015 , after consultation with the p arties, the Panel adopted its 
Working  Procedures7 and timetable. The timetable was  subsequently revised on 
12 December  2015. 
                                                
1 New Zealand's  request for consultations ( WT/DS477/1 ); United  States'  request for consultations 
(WT/DS478/1 ). 
2 New Zealand's  request for the establishment of a panel  (WT/DS477/9)  (hereafter New  Zealand 's Panel 
Request); United  States'  request for the establishment of a panel  (WT/DS478 /9) (hereafter United  States'  
Panel Request) . 
3 New Zealand's  Panel Request; United  States'  Panel Request.  
4 See the Minutes of the Meeting of the D SB held in the Centre Wi lliam Rappard on 20 May 2015 
WT/DSB/M/361.  
5 WT/DS477/10, WT/DS478/10, para.  2. 
6 WT/DS477/10, WT/DS478/10, para.  5. 
7 See the Working Pr ocedures of the Panel in Annex B . WT/DS477/R • WT/DS478/R  
 
- 19 - 
 
  1.8.  The Panel held a first substantiv e meeting with the parties on 1 and 2 February  2016. 
A session with the third parties took place o n 2 February 2016 . The Panel held a second 
substantive meeting with the parties on 13 and 14 April  2016.  
1.9.  On 26 May 2016 , the Panel issued the descriptive part of its Report to the parties. The Panel 
issued its Interim Report to the parties on 12 July  2016. The Panel issued its Final Report to the 
parties on 5 July 2016 . 
1.3.2   Request for enhanced third -party rights  
1.10.   On 2 December 2015, Australia, Brazil, Canada and the European Union jointly requested 
the Panel to exercise its discretion under Arti cle 12.1 of the  DSU to modify its Working Procedures . 
The requesting third parties asked the Panel to grant them additional rights to those provided in 
Article  10 of the DSU, in particular: (i)  "to receive an electronic copy of all submissions and 
statements of the parti es, including responses to Panel questions, up to the issuance of the interim 
report "8; and (ii) "to be present for the entirety of all  substantive meetings of the Panels  with the 
parties ".9  
1.11.   Responding to the Panel's invitation to present their views on t his request, both the 
United  States10 and Indonesia11 opposed the granting of enhanced rights to third parties in these 
proceedings. New Zealand  support ed the request.12  
1.12.   On 20  January 2016, the Panel issued a communication where it decline d Australia, Brazil , 
Canada and the European Union 's joint request for enhanced third party rights in these 
proceedings . 
1.3.3   Request for a p reliminary ruling  
1.13.   On 11 December 2015,  Indonesia submitted to the Panel a request for a preliminary ruling 
concerning the consistency  of New Zealand 's and the United  States ' panel requests and first 
written submissions with the requirements of the DSU.13  
1.14.   In response to the Panel's invitation to provide their views on Indonesia's request, the 
United  States  and New Zealand  provided a joint comm unication on 21 December 2015. The Panel 
also provided third parties with an opportunity to comment on the preliminary ruling request prior 
to the submission of Indonesia's first written submission. Only Australia and Brazil took advantage 
of this opportun ity and submitted to the Panel their comments on Indonesia's preliminary ruling 
request on 6 January 2016.  
1.15.   In the light of Indonesia's wish that the Panel rule on its request before the first substantive 
meeting, the Panel decided to communicate its concl usions on Indonesia's request on 27 January 
2016, as early as possible before its first substantive meeting. At that time, the Panel indicated 
that, following prior practice14 and in the interest of the efficiency of the proceedings, more 
detailed reasons i n support of those conclusions would be provided as soon as possible and, in any 
event, prior to the date of issuance of the Interim Report.15 The Panel issued its preliminary ruling 
to the parties, with a copy to the third parties, on  5 July  2016. The Pane l's preliminary ruling of 
5 July 2016 is an integral part of this panel  Report  and is included in Annex A -1. 
2  FACTUAL ASPECTS  
2.1  Introduction  
2.1.  The co-complainants challenged 18 separate measures that Indonesia impose d on the 
importation of horticultural product s, animals and animal products. Most of these measures 
                                                
8 Joint letter from the requesting third parties dated 2 December  2015.  
9 Joint lette r from the requesting third parties dated 2 December  2015.  
10 Letter from the United  States  dated 11 December 2015, para. 13.  
11 Letter from Indonesia dated 14 December 2015.  
12 Letter from New Zealand  dated 11 December 2015, para.  2. 
13 Indonesia 's request fo r a preliminary ruling, para.  1. 
14 See, for instance,  Panel Reports, Canada – Renewable Energy/Canada – Feed in Tariff Program , 
para. 7.8; and United  States  – Lamb , paras. 5.15 –5.16. 
15 Conclusions of the Preliminary Ruling by the Panel, 27 January 2016, pa ra. 1.3.  WT/DS477/R • WT/DS478/R  
 
- 20 - 
 
  constitute d distinct elements or components of Indonesia's import licensing regimes for 
horticultural products, on the one hand, and animals and animal products, on the other. Two of the 
challenged measures concern  the import licensing regimes "as a whole ", defined as these distinct 
elements operating in conjunction.  In addition, the co -complainants challenged Indonesia's 
requirement conditioning the importation of horticultural products and animals and  animal 
products on Indonesia's  determination of the  sufficiency of domestic production to fulfil domestic 
demand . 
2.2.  In this section of the Report, the Panel will describe Indonesia's legal framework for the 
importation of horticultural products, animals and  animal products ; the relevant import licensing 
application and issuance procedures  and the measures at issue in this dispute.  
2.3.  The Panel notes that the parties disagree on a number of factual issues. To the extent that it 
is necessary for the Panel to reso lve those disputed factual issues, it will do so in its Findings.  
2.2  Indonesia's legal framework for the importation of horticultural products, animals 
and animal products  
2.2.1   Overarching legislative framework  
2.2.1.1   Food Law  
2.4.  The Law of the Republic of Indonesia Number  18 of 2012 Concerning Food (Food Law)16 deals 
with national food production , planning and management . It emphasizes the importance of 
sovereignty17 and independence18 in food policy -making. While instituting an  overarching principle 
of sufficiency of domesti c production , its provisions define the scope and objectives of, inter alia , 
national food production, management, planning, availability,  affordability , distribution, 
consumption  and trade. Indonesia's Food Law  also delineates the role of government insti tutions in 
managing food supply and distribution as well as price stabilization.19 It prioritizes domestic food 
production and national food reserves as the main sources of food supply, with importation to be 
considered only in case of food shortages.20 It enshrines the government's overall responsibility in 
formulating food import regulations that are supportive of sustainable farming and foster farmer 
and consumer welfare.21 The Food Law also addresses the implementation and monitoring of halal 
requirements.22  
2.2.1.2   Farmers Law  
2.5.  The Law of the Republic of Indonesia Number 19 of 2013 Concerning Protection and 
Empowerment of Farmers (Farmers Law)23 aims at assisting farmers to cope with numerous 
production and marketing challenges (infrastructure, risk -management, ca pacity-building, finance, 
etc.). Indonesia's Farmers Law applies to agricultural commodities24 and echoes the fundamental 
principles of sufficiency and prioritization of domestic agricultural production (and consumption), 
while citing price stabilization obje ctives. To enforce adherence to the suffici ency principle, the 
Farmers  Law prohibits the importation of agricultural commo dities when domestic supply or 
government food reserves  are deemed sufficient.25 In order to meet national food requirements, 
"import a rrangements " must be planned by the government "according to the harvest season 
and/or domestic consumption requirement ", with relevant inter -ministerial coordination.26 The 
Farmer s Law further  requires all agricultural imports to come in to Indonesia throug h 
government -stipulated entry points.27 It broadly establishes import licensing procedures for 
agricultural products28 as well as stipulat ing criminal penalties for not conforming to the 
                                                
16 Exhibits JE -2 and IDN -6. 
17 Article 1(2)  of the Food Law, Exhibit JE -2.  
18 Article 1(3)  of the Food Law, Exhibit JE -2. 
19 See, for example, Article s 13 and  55-57 of the Food Law, Exhibit JE -2. 
20 Articles 14 and 36  of the Food Law, Exhibit JE -2. 
21 Article 39  of the Food Law, Exhibit JE -2. 
22 See, for instance, Article 69 (food safety); Article 95 (general implementation of the national 
guarantee system); Articles 97 and 101 (labelling); or Article  105 (advertising) of the Food Law (Exhibit JE -2). 
23 Exhibits JE -3 and IDN -7. 
24 Article 1(5)  of the Farmers Law , Exhibit JE -3. 
25 Article 30  of the Farmers Law , Exhibit JE -3.  
26 Article 15  of the Farmers Law , Exhibit JE -3. 
27 Articles 25, 28 and 29  of the Farmers Law, Exhibit JE -3.  
28 Article s 31(1) to (3) of the Farmers Law,  Exhibit JE -3.  WT/DS477/R • WT/DS478/R  
 
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  designated entry points29 and for importing agricultural commodities whe n domestic supply is 
sufficient.30 
2.2.1.3   Horticulture Law  
2.6.  The Law of the Republic of Indonesia Number 13 of 2010 Concerning Horticulture 
(Horticulture Law)31 lays down general rules regarding planning, development, research, finance, 
investment, marketing (includi ng distribution) and imports . Indonesia's Horticulture Law also 
enshrines the principle of sufficiency and prioritization of domestic production with respect to 
horticultural products .32 In addition to food safety, quality, packaging and labelling requireme nts, 
importation under the Horticulture Law is subject to criteria such as the "availability of domestic 
horticultural products " and the "established production and consumption targets ".33 It also 
contains the generally applicable import licensing requireme nts (namely , a recommendation from 
the Ministry of Agriculture; an import permit from the Ministry of Trade; and the mandated use of 
government -designated entry points34) subject to the issuance of supplementary specific 
regulations.35 It provides that t he M inister  of Agriculture  determines the types of horticultural 
products whose exit and/or entry from and to Indonesia's territory "requires permit ".36 This Law 
makes t he Government and/or local governments along with business actors collectively 
responsible f or balanc ing national supply and deman d for horticultural products, inter alia by 
controlling imports and exports .37 
2.2.1.4   Animal Law  
2.7.  The Law of the Republic of Indonesia Number 18 of 2009 on Animal Husbandry and Animal 
Health (Animal Law)38 as revised by the Law of the Republic of Indonesia Number  41 of  2014 
Concerning Amendment of Law Number 18 of 2009 Concerning Husbandry and Animal Health 
(Animal Law Amendment)39 constitutes the legal foundation for the organization of husbandry  and 
preservation of animal health  (i.e. prevention of animal disease and zoonosis).  Indonesia's Animal 
Law applies to animals40 and animal products.41 This Law mirrors the concepts of food sovereignty, 
sufficiency, independence, and food security that are found in the above Laws.42 As far as  
manufacturing is concerned, the Animal  Law prioritizes "domestic raw material utilization ".43 It also  
specifically regulat es the importation of animals and animal products. Importation is only 
permitted if "domestic production and supply of Livestock and A nimal Product has not fulfil[ed] 
public consumption ".44 The Animal Law requires c entral and regional government agencies to 
ensure that all animal products, whether locally produced or imported, are halal and comply with 
quality and safety regulations durin g the entire supply chain.45 Only animal products that have 
been certified as halal46 and safe may be distributed.47 Additionally, processed food of animal 
origin "must comply with the provision of the regulating  legislation in the food sector ".48 The 
Ministry  of Trade is the competent body to issue import licences for animal products (fresh and 
                                                
29 Article 100  of the Farmers Law,  Exhibit JE -3.  
30 Article 101  of the Farmers Law, Exhibit JE -3.  
31 Exhibits JE -1 and IDN -5.  
32 Article 1  of the Horticulture Law , Exhibit JE -1. For instance, it provides that "big" processors "shall be 
obligated to absorb local horticultural products " (Article 71). The prioritization of domestic production equally 
applies when marketing and promotion services are extended to horticultural products (Articles 74(2) and 
92(1) ). 
33 Article 88(1)  of the Horticulture Law , Exhibit  JE-1. 
34 Articles 88(2) -(3) of the Horticulture Law , Exhibit JE -1.  
35 Article 88(5)  of the Horticulture Law, Exhibit JE -1. 
36 Article 89(2) of the Horticulture Law, Exhibit JE -1.  
37 Article 90  of the Horticulture Law , Exhibit JE -1.  
38 Exhibits JE -4 and IDN -13. 
39 Exhibit JE -5. 
40 Article 1(3) of the Animal Law Amendment , Exhibit JE -5.  
41 Article 1(13)  of the Animal Law Amendment , Exhibit JE -5. 
42 See, for instance, para.(a) of the Preamble and Article 1(2)  of the Animal Law Amendmen t, 
Exhibit  JE-5. See also  Article 76(4)  of the Animal Law , Exhibit JE -4. 
43 Article 37 (1) of the Animal Law Amendment,  Exhibit JE -5. 
44 Article 36B(1) of the Animal Law Amendment , Exhibit  JE-5 
45 Article s 58(1) -(3) of the Animal Law Amendment,  Exhibit JE -5.  
46 Specific slaughtering guidelines are provided for in Article 61  of the Animal Law, Exhibit JE -4. 
47 Articles 58(4) -(5) of the Animal Law Amendment , Exhibit JE -5. 
48 Article 58(8) of the Animal Law Amendment , Exhibit JE -5. WT/DS477/R • WT/DS478/R  
 
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  processed), after the applicants have obtained a "recommendation " from the relevant 
governmental agencies.49  
2.2.2   Importation -related r egulations adopted by Indonesia's Mini stries of Trade and 
Agriculture  in force at the time of the establishment of the P anel 
2.8.  The Horticulture, Animal, Food and Farmers Law s provide the basis and rationale for the 
import licensing regimes for horticultural  products on the one hand,  and animals and animal 
products  on the other .50 Although the se two separate regimes share common  features, the  
applicable  importation rules and procedures differ  and are set out in two distinct  sets of 
regulations adopted by the Ministry of Trade and the Ministry of Ag riculture : (i) MOT 16/2013 , as 
amended51, and MOA 86/201352 set out Indonesia's import licensing regime for horticultural 
products  in force at the time of the establishment of the Panel53; and (ii) MOT 46/2013 , as 
amended54, and MOA 139/2014 , as amended55, set out Indonesia's import licensing regime for 
animals and animal products in force at the time of the establishment of the Panel .56   
2.9.  An element common to both regimes is that all importers of goods, whatever their nature, 
must obtain an importer registration  number or API, which is further differentiated in two sub -
categories, depending on the intended end -use of the goods being imported57; namely, API -U, 
which is granted only to companies  importing certain goods for trading purposes58; and API -P, 
which is only  delivered to companies importing goods for their own consumption and that are thus 
prohibited from trading or transferring such goods to other parties.59 
2.2.2.1   Import licensing procedures for horticultural products  
2.10.   The import licensing application and issuance p rocedures that relate to  certain  horticultural 
products are described below. Annex E-1 contains a graphical representation of these procedures.  
2.2.2.1.1   Applicati on process and related requirements  
2.11.   Prior to i mportation , applicants must complete the following steps : 
                                                
49 Article 59 of the Animal Law Ame ndment , Exhibit JE -5.  
50 Specifically,  Article 88 of the Horticulture Law  (Exhibit JE -1), Article 36B of the Animal Law 
Amendment  (Exhibit JE -5), Article 99 of the Farmers Law  (Exhibit JE -3), and Article 40 of the Food Law  
(Exhibit JE -2), provide for the e nactment of implementing regulations by the relevant government authorities.  
51 Regulation of the Minister of Trade Number 16/M -DAG/PER/4/2013 Concerning Provisions on the 
Import of Horticultural Products, of 22 April 2013 ( MOT 16/2013 ), Exhibit JE -8, amend ed by Regulation of the 
Minister of Trade Number 47/M -DAG/PER/8/2013 Concerning Amendment of Regulation of the Minister of 
Trade Number 16/M –DAG/PER/4/2013, of 30 August 2013 ( MOT 47/2013 ), Exhibit JE -9, (hereafter, 
MOT 16/2013, as amended ), Exhibit JE -10.  
52 Regulation of the Minister of Agriculture Number 47/Permentan/OT.140/4/2013 Concerning Import 
Recommendation of Horticulture Products, of  19 April 2013 (MOA 47/2013)  Exhibit JE -14, replaced by 
Regulation of the Minister of Agriculture Number 86/Perment an/OT.140/8/2013 Concerning Import 
Recommendation of Horticulture Products, of  30 August 2013 (MOA 86/2013) , Exhibit JE -15.  
53 New Zealand' s first written submission, para.71; United  States'  first written submission, para. 34 ; 
Indonesia's response to Panel  question No. 90  
54 Regulation of the Minister of Trade Number 46/M -DAG/PER/8/2013 Concerning Provisions on the 
Import and Export of Animals and Animal Products, of August 30 2013 ( MOT 46/2013 ), Exhibit JE -18. 
MOT 46/2013 was amended by Regulation of the Mi nister of Trade No. 57/M –DAG/PER/9/2013, of  26 
September 2013  (MOT 57/2013 ), Exhibit JE –19 and by Regulation of the Minister of Trade 17/M –
DAG/PER/3/2014, of 27 March  2014 (MOT 17/2014 ) (hereafter MOT 46/2013, as amended) , Exhibit JE -21.  
55 Regulation of t he Minister of Agriculture Number 139/Permentan/PD.410/12/2014 Concerning 
Importation of Carcasses, Meats, and/or Their Processed Products into the Territory of the Republic of 
Indonesia, of  24 December 2014 ( MOA 139/2014 ) (Exhibit JE -26). MOA 139/2014 was  amended by Regulation 
of the Minister of Agriculture Number  02/Permentan/PD.410/1/2015, of  22 January  2015 ( MOA 2/2015 ) 
(Exhibit JE -27), hereafter MOA 139/2014, as amended , Exhibit JE -28. 
56 New Zealand' s first written submission, para. 2 0; United  States'  first written submission, para. 97 ; 
Indonesia's response to the Panel questions after the second substantive meeting, fn.  2. 
57 Article 2 of MOT 27/2012 , Exhibit IDN -12. See also  Indonesia 's responses t o Panel questions No. 11 
and 21 . The APIs a re valid as long as companies remain in business and must be renewed every 5 years. 
Article 15 of MOT 27/2012, Exhibit IDN -12. 
58 Article 4 of MOT 27/2012, Exhibit IDN -12. 
59 Article 5  of MOT 27/2012 , Exhibit IDN -12. WT/DS477/R • WT/DS478/R  
 
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  a. Obtain a "Horticultural Products " designation from the Ministry of Trade.60 This 
designation differs depending on end-use: (i) If the applicant wishes to  import  
horticultural products  for human consumption , a designation as a Registered Importer of 
Horticu ltural Products (RI)  must be obtained61; (ii) If the applicant wishes to use 
imported horticultural products  as raw materials in a production process , a designation 
as a Producer Importer of Horticultural Products (PI)  must be obtained62; 
b. Obtain a  Horticultu ral Products Import Recommendation (Rekomendasi Impor Produk 
Hortikultura  or RIPH) from the Ministry of Agriculture63,  
c. Obtain a n Import Approval ( Surat Persetujuan Import ) from the Ministry of Trade64, and  
d. Undergo a technical inquiry65, carried out by a Sur veyor66 at the port of origin . 
2.12.   The above steps can differ in sequence,  depending on the intended use of the imported 
horticultural product . If the product is destined  for human consumption , the applicant  needs to 
obtain the RI  recognition first. Once regist ered, the RI may proceed to request an RIPH, followed 
by an Import Approval.67 If the product is intended  to be used as raw material  in a production 
process , the applicant  needs to obtain the RIPH first. Only then  may the applicant  seek recognition 
as a PI.68  
2.2.2.1.2   Recognition either as an RI  or PI by the Ministry of Trade  
2.13.   The application process , documentary  requirements and validity periods relating to the 
recognition as an RI  or PI are regulated by MOT 16/2013 , as amended. As mentioned above, 
pursuant to Article 3 of MOT 16/2013 , as amended, a designation either as a PI or and RI is a 
mandatory preliminary step . All applications are submitted electronically69 to the Trade Services 
Unit (UPP) , and addressed to the UPP  Coordinator and Implementer, who manages the l icensing 
service.70  
2.2.2.1.2.1   Recognition as an RI  
2.14.   This is the first step for importers seeking to import horticultural products for human 
consumption. Importer s holding  an RI designation  can import horticultural products for human 
consumption but are prohibited fro m trading or transferring products directly to consumers or 
retailers.71 Importers holding an RI designation  may only trade and/or transfer such imports to a 
"distributor " and cannot therefore sell the imported products directly to consumers.72 RI 
applicatio ns may be submitted at any time electronically.73 The documentation submitted is then 
verified for completeness74, after which, an "Assessment Team "75 checks it s veracity and conduct s 
a field inspection.76 Both the document verification and the field inspectio n are "conducted no later 
than" three  working days from the date an application is deemed complete, and "conducted in no 
more than " three working days.77 If the results of the inspection process are satisfactory, the UPP 
Coordinator grants the RI designatio n within the next two working days; otherwi se the application 
                                                
60 Article 3  of MOT  16/2013, as amended,  Exhibit JE -10. 
61 Article 1(7)  of MOT 16/2013, as amended , Exhibit JE -10. 
62 Article 1(6) of MOT  16/2013, as amended, Exhibit JE -10. 
63 Articles 1(4) and 4 of MOA 86/2013 , Exhibit JE -15. 
64 Articles 1(13), 11 and 12 of MOT 16/2013, as amended, Exhibit JE -10. 
65 Articles 21 and 22 of MOT 16/2013, as amended, Exhibit JE -10, Exhibit IDN -92. 
66 Articles 1(16) and 1(17) of MOT 16/2013, as amended, Exhibit JE -10. 
67 Articles 3, 11 and 12 of MOT 16/2013, as amended, Exhibit JE -10; Exhibit IDN -92. 
68 Articles 3 and 5(1)g. of MOT 16/201 3, as amended, Exhibit JE -10; Exhibit IDN -92. 
69 Article 16  of MOT 16/2013, as amended, Exhibit JE -10.  
70 Articles 1(18) and 1(21) of MOT 16/2013, as amended, Exhibit JE -10.  
71 Article 15 of MOT 16/2013, as amended, Exhibit JE -10. 
72 Article 15 of MOT 16/201 3, as amended, Exhibit JE -10. 
73 Article 8(1) of MOT 16/2013,  as amended, Exhibit JE -10; Exhibit IDN -92.  
74 Article 8(2)  of MOT 16/2013, as amended, Exhibit JE -10. 
75 Article 10 of MOT 16/2013, as amended, Exhibit JE -10. 
76 Article 8(3) of MOT 16/2013, as ame nded, Exhibit JE -10. 
77 Article 8(4) of MOT 16/2013, as amended, Exhibit JE -10. WT/DS477/R • WT/DS478/R  
 
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  is rejected.78 Once issued, the validity period for the RI designation  is two years starting from the 
date of issuance.79 
2.2.2.1.2.2   Recognition as a PI  
2.15.   This is the second  step for importers seeking to impor t horticultural products as raw 
materials as they need to obtain an RIPH first. An importer who obtains a PI-designation can only 
import fresh or processed horticultural products as raw materials or auxiliary materials for its 
industrial production process es and is prohibited from trading and/or transferring these 
horticultural products.80 PI applications may be submitted at any time electronic ally.81 The 
verification process is identical to that applying to the RI designation .82 The validity period for the 
PI designation "will correspond with the validity period of a [n] RIPH" starting from the date of the 
PI issuance.83 
2.2.2.1.3   Obtaining an RIPH  
2.16.   After having obtained the RI designation , this is the second  step for importers of 
horticultural products for human consumpti on; and the first step for importers seeking to import 
horticultural products as raw materials , i.e. prospective PI applicants . The issuance of the RIPH is 
also a pre -requisite to the issuance of an Import Approval  in the case of RIs .84 The application 
process is open twice a year for 15 working days, i.e. in November and in May85, and a pplications 
are submitted electronically .86 A maximum timeframe of seven working days is foreseen for the 
verification and issuance process to be completed, after which the RIP H is issued.87 The RIPH 
letters are issued twice a year , with a six-month validity period, i.e. from January to June , and 
from July to December.88 However, in the case of  chillies and fresh shallot s for consumption , RIPHs 
are issued for three -month periods a nd on the basis of reference prices pursuant to Article  5.89 
2.2.2.1.4   Obtaining an Import Approval  
2.17.   As a third step, importers of horticultural products for human consumption holding an RI  
designation  and an  RIPH must also obtain an Import Approval  from the Ministry of Trade.90 The 
application must be addressed electronically91 to the UPP Coordinator attaching the RIP H and the 
confirmation as RI -Horticultural Products. The UPP Coordinator then issues the Import Approval 
"no more than " two working days after the applicat ion is deemed complete and accurate.92 The 
timing for the submission of such applications is specifi cally regulated. Hence, the application 
windows are of one -month duration, twice a year. For imports of fresh and processed horticultural 
products listed in Appendix I that are scheduled for the period from January to June, "applications 
can only be submitted in the month of December "; and for imports planned for the period from 
July to December, "applications can only be submitted in the month of June. "93 The Import 
Approvals  are issued "at the beginning of each semester "94 and remain valid for that same 
semester .95 
                                                
78 Article 8(5 )-(6) of MOT 16/2013, as amended, Exhibit JE -10. 
79 Article 9 of MOT 16/2013, as amended, Exhibit JE -10. 
80 Article  7 of MOT 16/2013, as amended, Exhibit JE -10. 
81 Article 5(1) of MOT 16/2013, as amended, Exhibit JE -10. 
82 Article 5  of MOT 16/2013, as amended, Exhibit JE -10. 
83 Article 6  of MOT 16/2013, as amended, Exhibit JE -10. 
84 Article 12 of MOT 16/2013, as amended, Exhibit JE -10; Article 4 of MOA 86/2013,  Exhibit JE -15; 
Exhibit IDN -92.  
85 Article 13(2) of MOA 86/2013,  Exhibit JE -15.  
86 Articles 10 and 11  of MOA 86/2013,  Exhibit JE -15. 
87 Article 12  of MOA 86/2013,  Exhibit JE -15. 
88 Article 13 (1)-(3) of MOA 86/2013,  Exhibit JE -15. 
89 Article 5 (4) of MOA 86/2013,  Exhibit J E-15; Article 14 of MOT 16/2013, as amended, Exhibit JE -10 
90 This step is mandatory for RIs. Article  11(1) and  12 of MOT 16/2013, as amended, Exhibit JE -10 and 
IDN-92.  
91 Article 13(1) of MOT 16/2013, as amended, Exhibit JE -10. 
92 Article 13(2) and 13(3) of  MOT 16/2013, as amended, Exhibit JE -10. 
93 Article 13A(1) of MOT 16/2013, as amended, Exhibit JE -10. 
94 Article 13A(1) -(2) of MOT 16/2013, as amended, Exhibit JE -10. 
95 Article 14  of MOT 16/2013, as amended, Exhibit JE -10. WT/DS477/R • WT/DS478/R  
 
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  2.18.   For chillies  and fresh shallots for consumption, applications "can be submitted at any 
time".96 Import Approvals remain  valid for  three  months.97  
2.2.2.1.5   Tech nical inquiry at the port of origin  
2.19.   Once the Import Approval has been issued, all import s of fresh and processed horticultural 
product s, whether by RIs or PIs,  "must first undergo verification or technical inquiry at the port of 
origin ".98 These mandated "technical inquiries " are carried out by Surveyors appointed  by the 
Ministry of Trade.99 Once such inspections are completed, actual shipments may take place.100    
2.2.2.2   Import licensing procedures for animals  and animal products  
2.20.   The import licensing application and  issuance procedures that relate to animals and animal 
produ cts are described below. Annex E -2 contains a graphical representation of these procedures.  
2.2.2.2.1   Application process and related requirements  
2.21.   Importers must obtain similar  approvals to those required w hen importing horticultural 
products, albeit with a number of procedural differences. The approvals required to import animals 
and animal products depend on whether the product is listed in Appendix I or II of MOT 46/2013 , 
as amended, and MOA 139/2014 , as amended:  
a. For the importation of cattle and beef meat and offals listed in Appendix I of 
MOT 46/2013 , as amended, and MOA 139/2014 , as amended, three  approvals are 
required  in the following sequence : (i) Recognition as an RI  from the Ministry of 
Trade101; (ii) Recommendation from the Ministry of Agriculture  ("MOA 
Recommendation ")102; and (iii) Import Approval from the Ministr y of Trade103;  
b. For importation of the non -bovine animals, meat and offals listed in Appendix II of 
MOT 46/2013 , as amended, and MOA 139/2014 , as amended, two approvals are 
required  in the following sequence : (i) MOA Recommendation104; and (ii) Import 
Approval from the Ministry of Trade.105  
2.2.2.2.2   Recognition as an RI  
2.22.   Obtaining recognition as an RI  is the first step for importers seeking to import cattle  and 
beef meat and offals listed in Append ix I of MOT 46/2013 , as amended . This step is not foreseen in 
the case of products listed in  Appendix II of MOT 46/2013 , as amended .106 As in the case of 
horticultural products, all applications are submitted electro nically to the UPP and addressed to the 
UPP Coordinator and Implementer . The UPP Coordinator then conducts document and field 
inspections to investigate the correctne ss of the application materials107, in a similar manner and 
within identical timelines as th ose described above in paragraph 2.14 above with respect to 
horticultural products . RI designation s are valid f or two years from the date of issuance  and "can 
be extended ".108  
                                                
96 Article 13A(2)  of MOT 16/2013, as  amended, Exhibit JE -10. 
97 Article 14  of MOT 16/2013, as amended, Exhibit JE -10. As explained in Section 2.3.2.7  below , imports 
of chili and fresh shallots for consumption are subject to a reference price sys tem. 
98 Article 21(1)  of MOT 16/2013, as amended, Exhibits JE -10 and IDN -92. 
99 Articles 21 -23 and 25 of MOT 16/2013, as amended, Exhibit JE -10.  
100 Article 21(1) of MOT 16/2013, as amended, Exhibit JE -10. 
101 Article 4(1) of MOT 46/2013, as amended, Exhibit JE -21. 
102 Article 10 of MOT 46/2013, as amended, Exhibit JE -21; Article 4 of MOA 139/2014, as amended, 
Exhibit JE -28. 
103 Article 8 (1) of MOT 46/2013, as amended, Exhibit JE -21. 
104 Article 10 of MOT 46/2013 as amended, Exhibit JE -21; Article 4 of MOA 139/2014, a s amended, 
Exhibit JE -28. 
105 Article 9(1) of MOT 46/2013, as amended, Exhibit JE -21.  
106 See Indonesia 's response to Panel question No.  103, para. 39; Exhibit IDN -93. 
107 Article 5(2) –5(6) of MOT 46/2013, as amended, Exhibit JE -21. 
108 Article 6  of MOT 46/2013, as amended, Exhibit JE -21. WT/DS477/R • WT/DS478/R  
 
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  2.2.2.2.3   Obtaining an MOA Recommendation  
2.23.   Obtaining the MOA Recommendation is the second  step for recognized RIs wishing to import 
products listed in  Appendix I of MOT 46/2013 , as amended, and MOA 139/2014 , as amended ; and 
the first step for companies  wishing  to import the products  listed in Appendix  II of MOT 46/201 3, 
as amended, and MOA 139/2014 , as amended.109 Obtaining  an MOA Recommendation  is also a 
mandatory step prior to applying for an Import Approval.110  
2.24.   To obtain an MOA Recommendation , eligible applicants111 have four windows, i.e. in 
December, March, June and Se ptember, to submit an electronic application to the Ministry of 
Agriculture.112 It is foreseen that  the outcome is notified within seven working days.113 
MOA Recommendations are issued four times a year in March, June, September, and December 
(for the followin g year).114 They remain valid at the latest until the end of the year to which they 
apply .115 Importers of carcasses, meat, and/or their processed products are prohibited from 
requesting changes to the country of origin, point of entry, type/category of carcas ses, meat, 
and/or their processed products in already issued Recommendations.116 
2.25.   In emergency circumstances, MOA 139/2014 , as amended, provides that state -owned 
enterprises may be tasked by the Minister  of State -Owned Enterprises to import carcasses and/or 
secondary cuts of meat in order to address food availability, price volatility, anticipated inflation or 
natural disasters .117 The same exception is mirrored in MOT 46/2013  as amended, allowing 
BULOG, Indonesia's Logistics Agency, to import the animals and an imal products listed in 
Appendix  I of the same regulation, for food security or price stabilization purposes. In that 
instance, BULOG would also be exempted from seeking RI registration. Attaching an MOA 
Recommendation when applying for an Import Approval would suffice.118  
2.2.2.2.4   Obtaining an Import  Approval  
2.26.   As previously outlined in paragraph 2.21 above , obtaining an Import Approval is the third 
step for importers seeking to import cattle and beef meat and offals listed  in Appendix  I of 
MOT 46/2013 , as amended, and MOA 139/2014 , as amended , after obtaining both the 
RI designation  and MOA Recommendation; and the second step, for importers seeking to import 
non-bovine animals, meat, and offals listed in Appendix II of MOT 46/2013 , as amended, and 
MOA 139/2014 , as amended,  after having obtained the MOA Recommendation .119 As for 
horticultural products, requests for import approvals are submitted online to the UPP Coordinator 
and Implementer in accordance with fixed application windows preceding  each quarter .120 Import 
approvals are granted within two working days once the application is deemed complete121, are 
issued "at the beginning of each quarter " for any of the periods, January to March, April to June, 
July to September, or Oct ober to December , and have a three -month validity .122 The validity 
period of import approvals may be extended for a maximum of 30 days under  certain  
circumstances , except in the fourth quarter of the year when extension is not possible .123 
2.2.2.2.5   Obtaining a Certific ate of Health  
2.27.   A Certificate of Health from the country of origin of the animals and animal products that 
are to be imported must be issued after the RIs have received their Import Approvals.124 The 
                                                
109 See paragraph  2.22 above and Exhibit IDN -93. 
110 Article 10 of MOT 46/2013, as amended, Exhibit JE -21; Articles 4(3) and 4(4) of MOA  139/2014, as 
amended, Exhibit JE -28. 
111 Article 4(1) of MOA  139/2 014, as amended, Exhibit JE -28.  
112 Article 23(1)  of MOA  139/2014, as amended, Exhibit JE -28.  
113 Articles 25  and 26(2) of MOA  139/2014, as amended, Exhibit JE -28.  
114 Article 29 of MOA  139/2014, as amended, Exhibit JE -28.  
115 Article 31 of MOA  139/2014, as am ended, Exhibit JE -28. 
116 Article 33  of MOA  139/2014, as amended, Exhibit JE -28. 
117 Article 23(3) of MOA  139/2014, as amended, Exhibit JE -28.  
118 Article 18  of MOT 46/2013, as amended, Exhibit JE -21. 
119 Article 10 of MOT 46/2013, as amended, Exhibit JE -21, and Exhibit IDN -93. As explained in 
Sections  2.3.2.3  and 2.3.3.4  below , imports of certain animal and animal products  are subject to the 
80% realization requirement and to the reference price system.  
120 Article 12(1)  of MOT 46/2013, as amended, Exhibit JE -21. 
121 Articles 11(3) -(4) of MOT 46/2013, as amended, Exhibit JE -21. 
122 Articles 12(2) -(3) of MOT 46/2013, as amended, Exhibit JE -21. 
123 Article 12A of MOT 46/2013, as amended, Exhibit JE -21. 
124 Article 15  of MOT 46/2013, as amended, Exhibit JE -21. WT/DS477/R • WT/DS478/R  
 
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  Import Approval Number must be specified in the Certificate of Health that must accompany every 
shipment of animal products to Indonesia.125  
2.2.3   Post-establishment regulations  
2.28.   This section cover s certain  changes to the import licensing regimes for both horticultural 
products and animals and animal products that took pla ce after the establishment of this Panel .  
2.29.   Concerning the g eneral importer identification , from January 2016126, API registrations are 
valid as long as importers have on -going business activities . Importers holding an API are required 
to re-register at the i ssuing agency every five years commencing from the issuance date.127 
2.30.   With respect to the i mport licensing regime for horticultural products128, the RI and PI  
designation processes have been eliminated so that importers of horticultural products need  only 
obtain an RIPH, and  an Import Approval , for each validity period .129 The end -use requirements 
previously applying to RIs and PIs  and some of the documentary requirements  have however been 
maintained. Another element modified is t he timing for the submission of ap plications for Import 
Approvals : while Import approval applications by API -Ps can be submitted at any time130, API-Us 
wishing to import fresh horticultural product have two one -month application windows (December, 
for imports scheduled for the January -June s emester; and June for the July-December  semester) . 
API-U applications for chillies  and fresh shallots for consumption, and for processed horticultural 
products can be presented at any time.131 In addition, the 80 % realization requirement and the 
accompanying  penalty to reduc e import allocations for the next period  have been repealed .132 
Once importers receive their Import Approval they must, however, continue to report  on imports 
realized, attaching the scanned results of an Import Realization Control Card, dul y stamped by a 
Customs and Excise official.133 Failing to do so twice will cause the Import Approval to be 
suspended for the next period.134  
2.31.   Concerning the i mport licensing regime for animal and animal products135, the RI 
designation  processes have also been el iminated so that to import  Appendix I and Appendix II 
products , API-U and API -P importers only need obtain the MOA Recommendation and the MOT 
Import Approval .136 The 80% import realization requirement  has also been repealed,  although 
importers need to still submit written reports on their respective import realization s, for 
supervision purposes.137 The v alidity period for the MOA Recommendation and Import Approval 
has been extended from three to four months (1 January to 30 April; 1 May to 30 August; 1 
Septembe r to 31 December) , with a corresponding reduction in the number of application windows 
from four per year to three .138 Furthermore, the listing of  animal s and animal products  in 
Appendi ces I and II  has been amended.139 While the  domestic absorption requirement  at 3% for 
API-Us is maintained, this requirement is reduced to 1.5% for API -Ps.140 Finally, the length of prior 
storage periods is limited to a maximum of six months from the slaughter time  to arrival in 
                                                
125 Article 15(2)  of MOT 46/2013, as amended, Exhibit JE -21. 
126 Regulation Number 70/M -DAG/PER/9/2015 (MOT 70/2015) . Indonesia's second written submission, 
para. 7; and Exhibit IDN -35. 
127 Indonesia 's second written sub mission, para. 12 . 
128 MOT 16/2013, as amended, has been replaced by  Regulation of the Minister of Trade 71//M -
DAG/PER/9/2015 Concerning Provisions on the Import of Horticultural Products of 28 September 2015 (MOT 
71/2015) , Exhibits JE -12 and IDN -9, which ca me into effect on 1 December 2015.  
129 Indonesia 's response to Panel question No.  11. See also  Exhibit IDN -30. 
130 Article 12 of MOT 71/2015, Exhibit JE -12. 
131 Article 11 of MOT 71/2015, Exhibit JE -12. 
132 Indonesia 's response to Panel question No. 15. 
133 Article 20 of MOT 71/2015, Exhibit JE -12. 
134 Article 22 of MOT 71/2015, Exhibit JE -12. 
135 MOT 46/2013, as amended, has been replaced by Regulation of the Minister of Trade 05/M -
DAG/PER/1/2016, Concerning Export and Import Provisions on Animals and Animal Products (M OT 05/2016) , 
Exhibit IDN -41, which entered into force on 28 January 2016 . MOA 139/2014, as amended, has been replaced 
by Regulation 58/Permentan/PK.210/11/2015, Concerning Importation of Carcass, Meat and/or its Processed 
Product (MO A 58/2015) of 25 Decemb er 2015,  Exhibits  IDN-40 and AUS -1. 
136 Indonesia 's response to Panel question No.  20; Indonesia' s second written submission.  
137 Indonesia 's second written submission, para. 4.  
138 Article 30 of MOA 58/2015, Exhibit IDN -40. 
139 Article 22  and Appendices I -III of MOA 58/2015, Exhibit IDN -40. 
140 Article 5 of MOA 58/2015, Exhibit IDN -40.  WT/DS477/R • WT/DS478/R  
 
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  Indonesia in the case of imported frozen carcass and meat; and to a maximum of three months in 
the case of c hilled carcass and meat .141 
2.3  The m easures at issue  
2.3.1   Introduction  
2.32.   As explained above, t he co -complainants  have challenged a total of 18 measures  concerning 
Indonesia's import licensing regime s for horticult ural products  and animals and animal products  as 
well as Indonesia's sufficiency of domestic production  requirement.  The table below enumerates 
the 18 measures at issue.  
A. IMPORT LICENSING REGI ME FOR HORTICULTURAL  PRODUCTS  
DISCRETE ELEMENTS OF THE REGI ME: 
Measure 1  Limited application windows and validity periods  
Measure 2  Periodic and fixed import terms  
Measure 3  80% realization requirement  
Measure 4  Harvest period requirement  
Measure 5  Storage ownership and capacity requirements  
Measure 6  Use, s ale and distribution requirements for horticultural products  
Measure 7  Reference prices for chillies  and fresh shallots  for consumption  
Measure 8  Six-month harvest requirement  
REGIME AS  A WHOLE : 
Measure 9  Import licensing regime for horticultural produ cts as a whole . 
B. IMPORT LICENSING REGI ME FOR ANIMALS AND A NIMAL PRODUCTS  
DISCRETE ELEMENTS OF THE REGIME : 
Measure 10  Prohibition of importation  of certain  animals and animal products , except in 
emergency circumstances  
Measure 11  Limited application w indows and validity periods  
Measure 12  Periodic and fixed import terms  
Measure 13  80% reali zation requirement  
Measure 14  Use, sale and distribution of imported bovine meat and offal requirements  
Measure 15  Domestic purchase requirement  
Measure 16  Beef reference price  
REGIME AS  A WHOLE : 
Measure 17  Import licensing regime for animals and animal products as a whole  
C. SUFFICIENCY REQUIREM ENT 
Measure 18  Sufficiency of domestic production to fulfil domestic demand  
 
2.3.2   Import licensing regime for horticul tural products  
2.3.2.1   Measure  1: Limited application windows and validity periods  
2.33.   Measure 1 consists of a combination of the limited application windows and the six -month 
validity period s of RIPHs and Import Approvals.142 Indonesia applies this M easure pursuant to  
                                                
141 Article 9 of MOA 58/2015 , Exhibit IDN -40. WT/DS477/R • WT/DS478/R  
 
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  Article  13 of Regulation  MOA 86/2013143, which regulates the relevant timeframes concerning 
RIPHs and Article s 13A144,14145, 21146, 22147 and 30148 of Regulation  MOT 16/2013 , as amended, 
which does the same for Import Approvals.  
2.34.   Pursuant to these provisions , importe rs may apply for a n RIPH for the period from January 
to June over 15 working days starting in early November of the previous year, and for the period 
from July to December over 15 working days starting in early May of that year. Applications for 
Import App rovals may be made in December for the period from January to June, and in June for 
the period from July to December.  Import Approvals are issued "at the beginning " of each 
semester and are valid for 6 months.  
2.3.2.2   Measure  2: Periodic and fixed import terms  
2.35.   Measure 2 consists of the requirement to import horticultural products only within the terms 
of the RIPHs and Im port Approvals, including the quantity of the products permitted to be 
                                                                                                                                                  
142 New Zealand's Panel Request , pp. 1-4; United States'  Panel Request , pp. 1-4; New Zealand' s first 
written submission, para . 87; United  States' first written submission, para.  46. 
143 Article 13  of MOA 86/2013, as amended, provides as follows:  
(1) In one year, RIPH is issued 2 (two) times which is valid for a period from January to June and 
from July to December.  
(2) RIPH service as intended i n paragraph (1) for the period from January to June, the 
submission of application is open for 15 working days from the start of November of the previous 
year, and for the period from July to December, the submission of application is open for 15 
working d ays from the start of May of the current year.  
(3) RIPH of fresh horticulture products for industrial raw materials, processed for industrial raw 
materials, and processed for consumption is issued 1 (one) time within 1 (one) period for 1 (one) 
company.  
(4) RIPH service as intended in paragraph (1) is not applicable for fresh horticulture product in 
the form of chili and shallot as intended in Article 5 paragraph (3) and paragraph (4).   
Exhibit JE -15. 
144 Article 13A of MOT 16/2013, as amended, provides as fol lows:  
(1) The timing for the submission of applications for Import Approval of Horticultural Products as 
included in Appendix I of this Ministerial Regulation, is defined as follows:  
a. for the first Semester, the period from January to June, applications  can only be submitted in 
the month of December; and  
b. for the second Semester, the period from July to December, applications can only be 
submitted in the month of June.  
(2) Applications for Import Approval of Horticultural Products, specifically chili ( fruit of genus 
Capsicum) with Tariff Number/HS 0709.60.10.00 and fresh shallots for consumption with Tariff 
Number/HS 0703.10.29.00, as included in Appendix I of this Ministerial Regulation, can be 
submitted at any time.  
(2) Import Approval, as described i n paragraph (1), are issued at the beginning of each 
semester. Exhibit JE -10. 
145 Article 14 of MOT 16/2013, as amended, provides:  
Import Approval, as described in Article 13 paragraph (2), item (a), are valid for 6 (six) months starting 
from the date of iss uance of the Import Approval, except for the Import Approval of Horticultural 
Products such as chili (fruit of genus Capsicum) with Tariff Number/HS 0709.60.10.00 and fresh shallots 
for consumption with Tariff Number /HS 0703.10.29.00, which are valid for 3 (three) months starting 
from the date of issuance of the Import Approval. Exhibit JE -10. 
146 Article 21 of MOT 16/2013, as amended, relevantly provides:  
(1) Every Horticultural Product import, as described in Article 2, by a PI -Horticultural Products or a RI-
Horticultural Products, must first undergo verification or technical inquiry at its port of origin.  
(2) Verification or technical inquiry as described in paragraph (1) will be carried out by a Surveyor 
designated by the Minister. Exhibit JE -10. 
147 Article 22 of MOT 16/2013, as amended, relevantly provides:  
(1) Verification, as described in Article 21 paragraph (1), of Horticultural Product imports, examines 
data or information regarding: (a) Country and port of origin; (b) Tariff or HS number and product 
description; (c) Type and volume; (d) Shipping time; (e) Port of destination; . . .  
(2) Verification results, as described in paragraph (1), are incorporated in a Surveyor Report (LS), and 
are to be used as a supplementary document in completing import cus toms. Exhibit JE -10. 
148 Article 30 of MOT 16/2013, as amended by MOT 47/2013, relevantly provides:  
(2) If a fresh Horticultural Product import: (a) is not the Horticultural Product included in the 
Recognition of the PI -Horticultural Products and/or the Impo rt Approval; . . . it will be destroyed in 
accordance with regulatory legislation.  
(3) If a processed Horticultural Product import: (a) is not the Horticultural Product included in the 
Recognition of the PI -Horticultural Products and/or the Import Approval ; . . . it will be destroyed in 
accordance with regulatory legislation.  
(4) The cost of destroying and re -exporting a Horticultural Product, as described in paragraph (2) and 
paragraph (3), is the responsibility of the importer. Exhibit JE -10. WT/DS477/R • WT/DS478/R  
 
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  imported, the specific type of products permitted to be imported, the count ry of origin of the 
products, and the Indonesian port of entry through which the products will enter, and the 
impossibility to amend these terms during the validity period of RIPHs and Import Approvals.149 
This Measure is implemented by Indonesia by means of  Article 6 of MOA 86/2013150, that 
regulates the elements that need to be specified in the RIPHs , and, Article 13151 and 30152 of 
MOT 16/2013 , as amended, which  stipulates the same for the Import Approvals .  
2.36.   Pursuant to these provisions , the RIPHs include the pr oduct name, the tariff post/HS of 
horticulture product s, the country of origin, and entry point , while the Import Approvals include 
the type of imported product, the  quantity requ ested for the six -month semester, the country of 
origin and the port of entry . Once issued, t he terms of RIPHs and  Import Approvals cannot be 
amended or revised during their validity period and therefore importers cannot import other than 
as specified in the relevant RIPH or Import Approval.  When imported products do no t coincide w ith 
the terms specified in the Import Approvals and/or in the RIPHs , they are destroyed (fre sh) or 
re-exported (processed) at the importers' cost.153  
2.3.2.3   Measure  3: 80 % realization requirement  
2.37.   Measure 3 consists of the requirement that RIs of fresh horticultura l products must import 
at least 80% of the quantity of each type of product specified on their Import Approvals for every 
six-month validity period.154 This Measure is implemented through Articles  14A155, 24156, 25A157, 
26158 and 27A159 of MOT 16/2013 , as amended.  
                                                
149 New Zealan d's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, para. 90; United  States'  first written submission, para. 52.  
150 Article 6 (3) and (4)  of MOA 86/20 13 provide  as follows : 
(3) RIPH includes;  
a. RIPH num ber; 
b. company name and address;  
c. company Director name and address;  
d. number and date of application letter;  
e. product name;  
f. tariff post/HS of Horticulture Product;  
g. country of origin;  
h. manufacturing location (for industrial material); and  
i. entry point.  
(4) RIPH as intended in paragraph (2) is an Attachment that is an integral part of this Import 
Approval Letter. Exhibit JE -15. 
151 Article 13 of MOT 16/2013, as amended, reads as follows:  
(1) To obtain Import Approval, as described in Article 1 1, RI-Horticultural Products must submit 
an electronic application to the Minister and the UPP Coordinator and Implementer, attaching:  
a. AN RIPH; and  
b. Confirmation as RI -Horticultural Products.  
(2) The UPP Coordinator and Implementer, on behalf of the M inister, issues:  
a. Import Approval, no more than 2 (two) working days after receiving a complete and accurate 
application; or  
b. A rejection of Import Approval request, no more than 2 (two) working days after receiving an 
application, in the case that the  application is incomplete and/or contains inaccurate information.  
(3) Import Approval, as described in paragraph (2) item (a), is issued to a RI -Horticultural 
Products and a copy of the Import Approval will also be given to relevant agencies. Exhibit JE -10. 
152 Article 30 of MOT 16/2013, as amended by MOT 47/2013 relevantly provides:  
(2) If a fresh Horticultural Product import: (a) is not the Horticultural Product included in the 
Recognition of the PI -Horticultural Products and/or the Import Approval; ... it  will be destroyed in 
accordance with regulatory legislation.  
(3) If a processed Horticultural Product import: (a) is not the Horticultural Product included in the 
Recognition of the PI -Horticultural Products and/or the Import Approval; ... it will be dest royed in 
accordance with regulatory legislation.  
(4) The cost of destroying and re -exporting a Horticultural Product, as described in paragraph (2) and 
paragraph (3), is the responsibility of the importer. Exhibit JE -10. 
153 Article 30(2) -(3) of MOT 16/2013,  as amended , Exhibit JE -10. 
154 New Zealand's Panel Request , pp. 1 -4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, para. 92; United  States'  first written submission, para. 56.  
155 Article 14A of MOT 16 /2013, as amended , provid es that " RI-Horticultural Products who have 
obtained Import Approval, as described in Article 13 paragraph (2), item (a), are required to realize at least 
80% (eighty %) of imports of Horticultural Products as is listed in its Import Approval for every per iod" Exhibit 
JE-10.  
156 Article 24 of MOT 16 /2013, as amended , provides as follows:  WT/DS477/R • WT/DS478/R  
 
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  2.38.   Pursuant to t hese provisions , RIs are required  to import at least 80% of the quantity 
specified for each type of horticultural product listed on their Import Approval for every six -month  
period .160 Furthermore, RIs must account for the quantity of their realiz ed imports during a 
semester by submitting an Import Realization Control Card to the Director General of Foreign 
Trade at the Ministry of Trade  on a monthly basis. The Ministry of Trade sanctions RIs that fail to 
meet the 80 % realization requirement or fai l to file the Import Realization Control Card , with the 
suspension of their RI designation s. A RI that fails to file the Import Realization Control Card three 
times could have its designation revoked .  
2.3.2.4   Measure  4: Harvest period requirement  
2.39.   Measure 4 consis ts of the requirement that the importation of horticulture products takes 
place prior to, during and after the respective domestic harvest season s within a certain time 
period .161 Indonesia implements this measure mainly by means of Articles 5162 and 8163 of 
MOA 86/2013 . 
                                                                                                                                                  
(1) Upon the import of Horticultural Products, PI -Horticultural Products and RI -Horticultural 
Products must submit a written report including the scanned results of an Impor t Realization 
Control Card that has been initialed and stamped by a Customs and Excise official.  
(2) The report, as described in paragraph (1), is submitted every month via 
http://inatrade.kemendag.go.id, no later than the 15th (fifteenth) of the following  month to the 
Director General with a copy for the Director General of Processing and Marketing of Agricultural 
Products in the Ministry of Agriculture, and the Head of the Food and Drug Control Agency.  
(3) The report, as described in paragraph (1), is inc luded in Appendix II, which is an integral part 
of this Ministerial Regulation.  
(4) Import Realization Control Card, as described in paragraph (1), is a control card that 
measures the amount of realized imports of Horticultural Products . Exhibit JE -10.  
157 Article 25A of MOT 16/2013, as amended, provides:  
Recognition as a PI -Horticultural Products and Confirmation as a RI -Horticultural Products is suspended 
if a company:  
(a) does not fulfill the realization requirement of its Import Approval, as described in  Article 14A for RI -
Horticultural Products; and/or  
(b) does not fulfil its obligation to submit a report, as described in Article 24. Exhibit JE -10. 
158 Article 26 of MOT 16/2013, as amended, provides as follows:  
Recognition as a PI -Horticultural Products an d Confirmation as a RI -Horticultural Products is 
revoked if a company:  
a. does not submit the required report, as described in Article 24, 3 (three) times;  
b. is proven to have altered the information included in Horticultural Products import documents;  
c. is proven to have submitted false data and/or information that was required in obtaining 
Recognition as a PI -Horticultural Products, Confirmation as a RI -Horticultural Products, and 
Import Approval;  
d. is proven to have violated the packaging provision, a s described in Article 18, and/or the 
labelling provision, as described in Article 19;  
e. is proven to have traded and/or transferred imported Horticultural Products, as is described in 
Article 7 for PI -Horticultural Products;  
f. is proven to have traded a nd/or transferred imported Horticultural Products to a party other 
than a Distributor, as is described in Article 15 for RI -Horticultural Products;  
and/or  
g. is found guilty, on the basis of a court decision which has permanent legal force, of the 
criminal  offense of misusing Horticultural Products import documents. Exhibit JE -10. 
159 Article 27A of MOT 16/2013, as amended, provides:  
A company whose Recognition as a PI -Horticultural Products or Confirmation as a RI -Horticultural 
Products has been revoked, ca n reapply for Recognition as a PI -Horticultural Products or Confirmation 
as a RI -Horticultural Products no earlier than 2 (two) years from the date of the revocation of its 
Recognition as a PI -Horticultural Products or Confirmation as a RI -Horticultural Pr oducts. Exhibit JE -10. 
160 Article 14 A of MOT 16/2013, as amended, Exhibit JE -10. 
161 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, paras. 95 -96; United  States'  first written submission, pa ra. 60.  
162 Article 5 of MOA 86/2013 provides as follows:  
(1) Import of Horticulture Product can be conducted prior to harvest season, during harvest 
season and after harvest season within a certain time period.  
(2) Within a certain time period as intended i n paragraph (1) is stipulated by the Minister of 
Agriculture and submitted to the Minister of Trade.  
(3) Import period of horticulture products as intended in paragraph (1) is not applicable to 
horticulture product of fresh chili and shallot for consumptio n. 
(4) Issuance of RIPH of fresh horticulture products for consumption in the form of chili and 
shallot is based on determined reference price from the Minister of Trade. Exhibit JE -15. 
163 Article 8  of MOA 86/2013  reads:  WT/DS477/R • WT/DS478/R  
 
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  2.40.   Pursuant to these provisions , importation of horticultural products can only take place prior 
to, during  and after the harvest season, within  a certain time period  established by the Indonesian 
authorities. Measure  4 prohibit s imports outside the  time periods decided by the Ministry of 
Agriculture .164 In establishing the time period s, the Ministry of Agriculture is guided by the 
objectives and determinations made by the Food Security Council165 which are later published as 
part of Indonesia's five -year Development Plans. The Ministry of Agriculture communicates its 
specified time period s to the business community before the start of each application window, 
notifying officially the Ministry of Trade at the same time. The Ministry of Trade may be consul ted 
prior to the official adoption of a specified time  period for a validity period. In turn, the Ministry of 
Trade gives effect to the specified time  period s set by the Ministry of Agriculture by issuing Import 
Approvals in accordance with the  specified t ime period . Importers are required to submit a plan for 
the distribution of imported products, indicating the time of entry and the region/municipality 
where the products will be distributed.   
2.3.2.5   Measure  5: Storage ownership and capacity requirements  
2.41.   Measure 5 consists of the requirement that importers must own their storage facilities with 
sufficient capacity to hold the full quantity requested on their Import Application.166 This 
requirement is implemented by Indonesia through Article 8 (1)(e) of MOT 16/2013 , as amended167, 
and by Article  8(2)(c)  and (d)  of MOA 86/2013 , as amended .168 
2.42.   Accordingly, importers applying for designation as an RI  are to provide "proof of ownership 
of storage facilities appropriate for the product's characteristics ". In addition, importers  applying 
for an RIPH must include a statement of ownership of storage as part of their applications.  
2.3.2.6   Measure  6: Use, sale and distribution requirements for horticultural products  
2.43.   Measure 6 consists of the  requirements on the importation by PIs and RIs of listed 
horticultural products that limit the use, sale and distribution of the imported products.169 
                                                                                                                                                  
(1) RIPH is issued with the followi ng administrative requirements: a. Fresh horticulture products 
for consumption shall include: - Photo copy of RI -Horticulture Product from the Ministry of Trade; 
- Photo copy of General Importer Identification Number (API -U); and - Statement of not 
importi ng horticulture products which exceed 6 (six) months after the harvest period. b. Fresh 
and processed horticulture products for industrial raw materials shall include: - Technical letter of 
consideration, industry location, and industrial capacity from the  Minister of Industry; - Photo 
copy of Importer Producer Identification Number (API -P). c. Processed horticulture product for 
consumption shall include: - Photo copy of RI -Horticulture Product from the Ministry of Trade; - 
Importation approval letter from the Agency of Drug and Food Control; and - Photo copy of 
General Importer Identification Number (API -U). (2) Issuance of RIPH for fresh produce for 
consumption, in addition to meeting the administrative requirements as intended in paragraph 
(1) item a must  be accompanied with the following technical requirements: a. 
plantation/business area registration information or Certificate of Good Agr iculture 
Practices/GAP; b. post -harvest packing house registration issued by authorized agency from the 
country of ori gin; c. statement of ownership of storage and distribution facilities for horticulture 
products according to their characteristics and product type; d. statement of suitability of storage 
capacity; and e. information of distribution plan according to the t ime and area (regency/city). 
(3) Technical requirements as intended in paragraph (2) item a and b is translated into Bahasa 
Indonesia . Exhibit JE -15. 
164 Indonesia 's response to Panel question No.  34. 
165 Indonesia 's response to Panel Question s nos. 18 and 34.  
166 New Zealand's Panel Request , pp. 1 -4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, para. 99; United  States'  first written submission, para. 66.    
167 Article 8  of MOT 16/2013, as amended, provides as follows that: " (1) To receive Confirmation as a 
RI-Horticultural Products, as described in Article 3, a company must submit an electronic application to the 
Minister and the UPP Coordinator and Implementer, and attach  … e. Proof of ownership of storage facilities 
appropriate for the product 's characteristics… " Exhibit JE -10. 
168 Article 8(2)(c) and (d) of MOA 86/2013 relevantly provides: " (2) Issuance of RIPH for fresh produce 
for consumption, in addition to meeting the administrative requirements as intended in paragraph (1) it em a 
must be accompanied with the following technical requirements:  … c. statement of ownership of storage and 
distribution facilities for horticulture products according to their characteristics and product type ; d. statement 
of suitability of storage cap acity …" Exhibit JE -15. 
169 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, paras. 106 -109; United  States'  first written submission, paras. 70 -72. WT/DS477/R • WT/DS478/R  
 
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  Indonesia implements th is Measure by means of Articles 7170, 8171, 15 and 26(e) -(f)172 of 
MOT 16/2013 , as amended.173 
2.44.   Pursuant to these provisions, an importer that obtains recognition as a PI can only import 
horticultural products as raw materials or auxiliary materials for its industrial production processes 
and is thus prohibited from trading and/or transferring them.  Likewise , an importer that obtains 
recognition as an RI can only import horticultural products for consumption provided they are 
traded or transferred to a distributor and not directly to consumers or  retailers. Designation as an 
RI or PI can be revoked where the relevant importer is proven to have tra ded and/or transferred 
imported horticultural p roducts.174 
2.3.2.7   Measure  7: Reference prices for chillies  and fresh shallots for consumption  
2.45.   Measure 7 consists of the implementation  of a reference price  system  by the Ministry of 
Trade on imports of chil lies and fresh shallots  for consumption.175 Indonesia implements this 
Measure by means of Article 5(4) of MOA 86/2013176 and by Article 14B of MOT 16/2013 , as 
amended by MOT 47/2013.177 
2.46.   Pursuant to these provisions, importation is  suspended  when the domestic market price f alls 
below the pre -established reference price . Whenever  the reference price system is activated, 
imports are temporarily suspended , independently of whether an im porter holds an RIPH and/or 
an Import Approval . Already authorized import volumes do not "carry over " to the next validity 
period.178 Imports are resumed when  the market price again reaches the reference price. 
2.47.   The term "reference price " is defined as "the reference selling price at the retail level that is 
established by the Horticultural Product P rice Monitoring Team. "179 This team is formed by the 
                                                
170 Article 7 of MOT 16/2013, as amended, pr ovides : "Businesses that have received Recognition as a 
PI-Horticultural Products can only import Horticultural Products as raw materials or as supplementary materials 
for the needs of its industrial production process and are prohibited from trading and/o r transferring these 
Horticul tural Products." Exhibit JE -10. 
171 Article 8 of MOT 16/2013, as amended by MOT 47/2013, relevantly provides:  
(1) To receive Confirmation as a RI -Horticultural Products, as described in Article 3, a company must submit an 
electr onic application to the Minister and the UPP Coordinator and Implementer, and attach … i. A stamped 
statement letter agreeing not to sell Horticultural Products directly to consumers or retailers.  
172 Article 26(e) -(f) of MOT 16/2013, as amended by MOT 47/20 13, relevantly provides:  
Recognition as a PI -Horticultural Products and Confirmation as a RI -Horticultural Products is revoked if a 
company:  
… (e) is proven to have traded and/or transferred imported Horticultural Products, as is described in 
Article 7 for  PI-Horticultural Products;  
(f) is proven to have traded and/or transferred imported Horticultural Products to a party other than a 
Distributor, as is described in Article 15 for RI -Horticultural Products … Exhibit JE -10. 
173 Article 15 of MOT 16/2013, as a mended by MOT 47/2013, provides : "Businesses that have received 
Confirmation as a RI-Horticultural Products:  a. Only can trade and/or transfer imported Horticultural Products 
to a Distributor; and  b. Are forbidden from trading and/or transferring imported H orticultural Products directly 
to consumers or retailers ". Exhibit JE -10. 
174 Article s 26(e) and 26(f) of MOT 16/2013, as amended , Exhibit JE -10.  
175 New Zealand's Panel Request , pp. 1 -4; United States' Panel Request , pp. 1 -4; New Zealand' s first 
written subm ission, para. 109; United  States'  first written submission, paras. 75 -76. 
176 Article 5(4) of MOA 86/2013 provides that "[i]ssuance of RIPH of fresh horticulture products for 
consumption in the form of chili and shallot s is based on determined reference pric e from the Minister of 
Trade ". Exhibit JE -15. 
177 Article 14B of MOT 16/2013, as amended, reads as follows:  
(1) Importation of chili (fruit of genus Capsicum) with Tariff Number/HS 0709.60.10.00 and fresh 
shallots for consumption with Tariff Number/HS 0703.1 0.29.00 is conducted with due observance 
of the Reference Price established by the Horticultural Product Price Monitoring Team which was 
formed by the Minister and whose membership consists of representatives from relevant 
agencies.  
(2) In the event that t he market price of chili (fruit of genus Capsicum) with Tariff Number/HS 
0709.60.10.00 and fresh shallots for consumption with Tariff Number/HS 0703.10.29.00 is below 
the Reference Price, then the importation of chili (fruit of genus Capsicum) with Tariff 
Number/HS 0709.60.10.00 and fresh shallots for consumption with Tariff Number/HS 
0703.10.29.00 is postponed until the market price again reaches the Reference Price.  
(3) The Reference Price of chili (fruit of genus Capsicum) with Tariff Number/HS 0709.60.1 0.00 
and fresh shallots for consumption with Tariff Number/HS 0703.10.29.00 as described in article 
(1) can be evaluated at any time by Horticultural Product Price Monitoring Team.  Exhibit JE -10. 
178 See Indonesia 's response to Panel question No.  13.  
179 Article 1(15) of MOT  16/2013, as amended, Exhibit JE -10. WT/DS477/R • WT/DS478/R  
 
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  Minister of Trade and "consists of representatives from relevant agencies ".180 It has the authority 
to evaluate the reference price "at any time ".181 In determining the reference price, the Ministry of 
Trade t akes into account: (1) farmers' operational costs; (2) farmers’ profit margins; and (3) a 
"reasonable price of such products to be sold to customers. "182 The Ministries of Agriculture and 
Trade (Directorate of Import, Directorate of Export Import Facilitatio n and Directorate of Primary 
and Strategic Products) are responsible for monitoring the reference price system while the 
domestic market prices of chil li and shallot are monitored by Indonesia's Statistic Central 
Bureau.183 The reference price calculation me thodology and parameters are not published .184 
Pursuant to the Decree of Director General of Domestic Trade No 118/PDN/KEP/10/2013, effective 
from 3 October 2013, the reference prices have been respectively set as follows: IDR 26,300/kg 
for big red chil li; IDR 28,000 for bird 's eye chil li; and IDR 25,700 for shallot.185  
2.3.2.8   Measure  8: Six -month harvest requirement  
2.48.   Measure 8 consists of the requirement that all imported fresh horticultural products have 
been harvested less than six months prior to importation.186 Indonesia implements this measure 
by means of Article 8(1)(a) of MOA 86/2013 .187 Pursuant to this provision, in order to obtain an 
RIPH for fresh horticultural products, a n RI must produce a statement committing  not to import  
horticultural  products harvested ov er six months prior to importation .  
2.3.2.9   Measure  9: Import licensing regime for horticultural products as a whole  
2.49.   Measure 9 consist s of Indonesia's import licensing regime for horticultural products, as 
maintained through MOT 16/2013 , as amended, and MOA 86/20 13, as a whole.188 Reference is 
made to  the various subsections describing the individual elements of this regime that have been 
challenged as separate Measures 1 to 8.  
2.3.3   Import licensing regime for animals and animal products  
2.3.3.1   Measure  10: Import p rohibition of certain animals and animal products , except 
in "emergency circumstances " 
2.50.   Measure 10 consists of the prohibition on the importation of bovine meat, offal, carcass and 
processed products that are not listed  in Appendices I of MOT 46/2013 , as amended , and 
MOA 139/2014 , as amended; or non -bovine and processed products that are not listed in 
Appendices II of MOT 46/2013 , as amended , and MOA 139/2014 , as amended.189 Indonesia 
implements this  Measure by means of Article 2(2) of MOT 46/2013 , as amended190; and 
Article s 8191 and 23(3)192 of MOA 139/2014 , as amended , and Article 59(1) of the Animal Law 
Amendment.193 
                                                
180 Article 14B(1) of MOT 16/2013, as amended, Exhibit JE -10. 
181 Article 14B(3) of MOT 16/2013, as amended, Exhibit JE -10. 
182 Indonesia 's response to Panel question No.  35. 
183 Indonesia 's response to Panel qu estion No.  35. 
184 Indonesia 's response to Panel question No.  35. 
185 Indonesia 's response to Panel question No.  38. 
186 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, para. 111; United  States ' first written submission, paras. 80 and 204.  
187 Article 8(1)(a) of MOA 86/2013 provides that: "RIPH is issued with the following administrative 
requirements: a. Fresh horticulture products for consumption shall include: - Photo copy of RI -Horticulture 
Product from the Ministry of Trade; - Photo copy of General Importer Identification Number (API -U); and - 
Statement of not importing horticulture products which exceed 6 (six) months after the harvest period." 
Exhibit  JE-15. 
188 New Zealand's Panel Request , pp. 1-4; United States ' Panel Request , pp. 1-4; New Zealand' s first 
written submis sion, para.  274; United  States'  first written submission, para. 211.  
189 New Zealand 's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written s ubmission, paras.  38-45; United  States'  first written submission, para. 105.  
190 Article 2(2) of MOT 46/2013, as amended, provides:  "The types of Animals and Animal Products that 
can be imported are included in Appendix I and Appendix II, which is an integra l part of this Ministerial 
Regulation. " Exhibit JE -21. 
191 Article 8 of MOA 139/2014, as amended, provides: "Requirements for bovine meats, as listed in 
Appendix I, are an integral part of this Ministerial Regulation, and non -bovine carcasses and/or meats as  well 
as their processed products that can be imported, as listed in Appendix II, are an integral part of this 
Ministerial Regulation. " Exhibit  JE-28. WT/DS477/R • WT/DS478/R  
 
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  2.51.   Pursuant  to the  above provisions, only those animals and animal products that are listed in 
the relevant appendices to both MOA 139/2014 , as amended, and MOT 46/20 13, as amended, are 
eligible to obtain MOA Recommendations and Import Approvals , and thus can be imported under 
Indonesia's import licensing regime . State-owned enterprises may be authorized to  import unlisted 
carcasses and/or secondary cut meats  up to the  amount determined by Indonesian officials to be 
required  to address food availability , price volatility, inflation and/or natural disasters.194  
2.3.3.2   Measure  11: Limited application windows and validity periods  
2.52.   Measure 11 consists of a combination of requirement s, including the prohibition on 
importers from applying for Recommendations and Import Approvals outside four one -month 
periods, the provision that Import Approvals are valid for only th e three -month duration of each 
quarter, and the requirement that impor ters are only permitted to apply for Recommendations and 
Import Approvals in the month immediately before the start of the relevant quarter.195 This 
measure is implemented by Indonesia through Article 29 of MOA 139/2014 , as amended by 
MOA 2/2015196, and Articl es 12197 and 15198 of MOT 46/2013 , as amended.  
2.53.   Pursuant to these provisions, the issuance of a r ecommendation is conducted four times; 
namely, December of the previous year, and March, June, and September of the current year. 
Applications for Import Approval o f animals and animal products listed in Appendix I can only be 
submitted as follows: (i) for the first quarter (January to March), in the month of December; (ii) 
for the second quarter (April to June), in the month of March ; (iii) for the third quarter (Ju ly to 
September), in the month of June; and (iv) for the fourth quarter (October to December), in the 
month of September. The Import Approval is then issued at the beginning of each relevant quarter 
and is valid for three months.  
2.3.3.3   Measure  12: Periodic and f ixed import terms  
2.54.   Measure 12 consists of the requirement to only import animals and animal products within 
the terms of the Recommendations and Import Approvals, the prohibition of importing 
types/categories of carcasses, meat, and/or their processed prod ucts other than as specified  in 
Import Approvals and  Recommendation s, and the  prohibition from requesting changes to the 
                                                                                                                                                  
192 Article 23 (3) of MOA  139/2014, as amended, provides : "In order to address food availability and 
price v olatility, and anticipate inflation and/or natural disasters, State -Owned Enterprises can be tasked by the 
Minister of State -Owned Enterprises to import carcasses and/or secondary cut meats. " Exhibit JE -28. 
193 Article 59(1) of the Animal Law Amendment  (Exhibit JE -5) provides as follows : 
(1) Every Person that import Animal Product into the territory of Republic of Indonesia must obtain 
import permit from the minister that organizes government affairs in trade sector after obtaining 
recommendation from:  
a. the Minister for Fresh Animal Product; or  
b. the Head of agency in the field of drug and food control for processed food 
product of Animal origin . 
194 Article 23(3) and 5 of MOA 139/2014, as amended, Exhibit JE -28. 
195 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written submission, para. 46; United  States'  first written submission, para. 113.  
196 Article 29 of MOA 139/2014, as amended by MOA 2/2015, provides that "[r]ecommendation 
issuance, as described in Articl e 28, is conducted 4 (four) times: December of the previous year, and March, 
June, and September of the current year ". (Exhibit JE -28). 
197 Article 12 of MOT 46/2013, as amended,  provides as follows : 
(1) Applications for Import Approval of Animals and Animal  Products, as included in Appendix I, 
for: 
a. The first quarter, period from January to March, can only be submitted in the month of 
December.  
b. The second quarter, period from April to June, can only be submitted in the month of [March]  
c. The third quar ter, period from July to September, can only be submitted in the month of June.  
d. The fourth quarter, period from October to December, can only be submitted in the month of 
September.  
(2) Import Approval is issued at the beginning of each quarter.  
(3) Imp ort Approval, as described in Article 11, paragraph (3), item (a), is valid for 3 (three) 
months commencing from the date of its issuance . Exhibit JE -21. 
198 Article 1 5 of MOT 46/2013 , as amended (Exhibit JE -10), provides as follows : 
(1) A Certificate of Hea lth from the country of origin of the Animals and/or Animal Products that 
are to be imported must be issued after a RI -Animals and Animal Products have received Import 
Approval.  
(2) The Import Approval Number must be included in the Certificate of Health, as described in 
paragraph (1).  WT/DS477/R • WT/DS478/R  
 
- 36 - 
 
  elements specified in Recommendations once they have been issued .199 This measure is 
implemented by Indonesia through Articles 30200 and 33 (a)-(b) and 39(e)201 of MOA 139/2014 , as 
amended202, and Article  30 of MOT 46/2013 , as amended.203 
2.55.   Pursuant to these provisions, MOA Recommendations and Import Approvals must specify, 
inter alia , the quantity of products permitted to be imported; a description o f the type, category, 
cut and HS Code for the products to be imported; the country of origin of products permitted for 
importation; and the port of entry into Indonesia through which products are permitted to be 
imported.  Importers are prohibited from requ esting changes to the country of origin, point of 
entry, type/category of carcasses, meat, and/or their processed products once a Recommendation 
has been issued.  If the quantity, type, business unit, and/or country o f origin of imports is not in 
accordance  with the  relevant  Import Approval , those imports  will have to be re -exported , at the 
importer's cost . 
2.3.3.4   Measure  13: 80 % reali zation requirement  
2.56.   Measure 13 consists of the requirement whereby RIs must import at least 80% of each type 
of product covered by th eir Import Approvals every year.204 This Measure  is implemented by 
Indonesia by means of Articles 13205, 25206, 26207 and 27208 of MOT 46/2013 , as amended.   
                                                
199 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written submission, paras. 49 -51; United  States'  first written submission, para. 117.  
200 Article 30 of MOA 139/2014, as amended , provides as follows:  
A Recommendation, as described in Article 28, must at a minimum consist of:  
a. Recommendation number;  
b. Applicant name and address, and cold storage address;  
c. Application letter number and date;  
d. Country of origin;  
e. Name and e stablishment number of the supplying business unit;  
f. Type/category of carcasses, meat, offals and/or their process products, along with HS code;  
g. Technical requirements of veterinary public health;  
h. Point of entry;  
i. Validity period of Recommendatio n; and  
j. Intended use.  Exhibit JE -28. 
201 Article 39(e) of MOA 139/2014, as amended, relevantly provides:  
Business Operators, State -Owned Enterprises, Regional -Government Owned Enterprises, Social 
Institutions, or Foreign Country/International Institution R epresentatives that violate the provisions in: 
… (e) Article 33 will be subject to sanctioning in the form of Recommendation revocation, not being 
given Recommendation in the future, and will have their Import Approval Letter (SPI) and status as a 
Register ed Importer (IT) of Animal Products proposed to the Minister of Trade for revocation.  Exhibit 
JE-28. 
202 Article 33b of MOA 139/2014, as amended by MOA 2/2015, provides as follows:  
Business Operators, State -Owned Enterprises, Regional -Government Owned Ente rprises, Social 
Institutions, or Foreign Country/International Institution Representatives, as described in Article 
23, paragraph (1) and paragraph (2), that import carcasses, meat, and/or their processed 
products:  
a. are prohibited from requesting changes  to the country of origin, point of entry, type/category 
of carcasses, meat, and/or their processed products in Recommendations that have been issued;  
b. are prohibited from importing types/categories of carcasses, meat, and/or their processed 
products oth er than what is included in their Recommendation;  
c. must prevent the entry and spread of infectious animal diseases; and  
d. must report their importation realization from the previous period when submitting a new 
application for import Recommendation, in accordance with Format -4. Exhibit JE -28. 
203 Article 30 of MOT 46/2013, as amended, reads as follows:  
(1) Importers or Exporters of Animals and/or Animal Products that are not in accordance with the 
provisions in this Ministerial Regulation will be punished in accordance with regulatory legislation  
(2) Imports of Animals and/or Animal Products whose quantity, type, business unit, and/or 
country of origin is not in accordance with their Import Approval and/or not in accordance with 
the provisions in this Minis terial Regulation will be reexported.  
(3) The cost of re -export, as described in paragraph (2), is the responsibility of the importer.  
Exhibit JE -21. 
204 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written  submission, para. 52; United  States'  first written submission, para. 122 . 
205 Article 13 of MOT 46/2013, as amended, provides as follows:  
RI-Animals and Animal Products who have received Import Approval, as described in Article 11, 
paragraph (3), item (a), are required to realize at least 80% (eighty %) of imports of Animals 
and Animal Products for 1 (one) year . Exhibit JE -21. 
206 Article 25 of MOT 46/2013, as amended, provides as follows:  WT/DS477/R • WT/DS478/R  
 
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  2.57.   Pursuant to the above provisions, RIs are required to import, on an annual basis, 80% of 
the quantity of each  type of animal and animal product  specified in their Import Approvals . In 
addition,  RI designees are required to submit monthly import and export realization reports setting 
out all of their imports of animals and animal products. The se reports must be su bmitted every 
month to the Ministry of Trade, the Ministry of Agriculture, and the Head of the Food and Drug 
Control Agency . The RI  designees must attach a photocopy of their "Import Realization Control 
Card". Failing to fulfil the 80% realization requirem ent carries the penalty of suspension or 
revocation of the RI  designation , depending on the circumstances  established in Articles 26 and  27 
of MOT 46/2013, as amended . 
2.3.3.5   Measure  14: Use, sale and distribution of imported bovine meat and offal  
2.58.   Measure 14 con sists of certain requirements that limit the use, sale and distribution of 
imported  animals and animal products, including bovine meat and offal .209 This measure is 
implemented by Indonesia through Articles 3210, 17211, 25(2)212 and 26213 of MOT 46/2013 , as 
amended,  and Article s 32214 and 39(d)215 of MOA 139/2014 , as amended .  
                                                                                                                                                  
(1) RI -Animals and Animal Products or companies that have already obta ined Import Approval 
and companies that have already obtained Export Approval must:  
a. submit a written report evaluating their import or export of Animals and/or Animal Products, 
through http://inatrade.kemendag.go.id in the form of the report template in cluded in Appendix 
IV, which is an integral part of this Ministerial Regulation; and  
b. attach a photocopy of Import or Export Realization Control Card that has been signed and 
stamped by a Customs and Excise official.  
(2) RI -Animals and Animal Products th at have obtained Import Approval must submit a cattle 
and beef distribution report in the form of the report templates included in Appendix V and 
Appendix VI, which are an integral part of this Ministerial Regulation.  
(3) The reports, as described in parag raph (1) and paragraph (2), must be submitted every 
month no later than the 15th (fifteenth) of the following month to the Director General with a 
copy to:  
a. The Director General of Domestic Trade, Ministry of Trade;  
b. The Head of the Food and Drug Contr ol Agency; and  
c. The Director General of Livestock and Animal Health, Ministry of Agriculture . Exhibit JE -21. 
207 Article 26  of MOT 46/2013, as amended , provides as follows:  
Confirmation as a RI -Animals and Animal Products is suspended if a company:  
a. does  not fulfill the realization obligation of its Import Approval, as described in Article 13; 
and/or  
b. does not fulfill the obligation to submit a report as described in Article 25 as many as 3 (three) 
times . Exhibit JE -21.  
208 Article 27  of MOT 46/2013, as amended , provides as follows:  
Confirmation as a RI -Animals and Animal Products is revoked if a company:  
a. does not fulfill the realization obligation of its Import Approval, as described in Article 13 as 
many as 2 (two) times;  
b. is proven to have violate d the labeling inclusion provision, as described in Article 19, and/or 
the packaging provision, as described in Article 20;  
c. is proven to have submitted false data and/or information that was required in receiving 
Confirmation as a RI -Animals and Animal  Products, Import Approval, or Export Approval;  
d. is proven to have altered the information included in the RI -Animals and Animal Products 
import, Import Approval, or Export Approval documents; and/or  
e. is found guilty, on the basis of a court decision which has permanent legal force, of the 
criminal offense of misusing RI -Animals and Animal Products import, Import Approval, or Export 
Approval documents . Exhibit JE -21. 
209 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand's first 
written submission, para. 55; United  States'  first written submission, para. 125.  
210 Article 3 of MO T 46/2013, as amended, provides as follows : 
(1) Animals, as described in Article 2, paragraph (2), can be imported in order to:  
a. improve genet ic quality and diversity;  
b. develop science and technology;  
c. overcome domestic deficiencies of Seeds, Breeders and/or Feeders; and/or  
d. fulfill research and development needs.  
(2) Animals, as described in Article 2, paragraph (3), can be exported only if the domestic needs 
of Seeds, Breeders and/or Feeders have been fulfilled and the sustainability of local livestock is 
secure . Exhibit JE -21. 
211 Article 17 of MOT 46/2013, as amended, provides that bovine c arcasses, meats, and/or offals, as 
listed in Appe ndix I "can only be imported for the use and distribution of industry, hotels, restaurants, catering, 
and/or other special needs ". Exhibit JE -21. 
212 Article 25(2) of MOT 46/2013, as amended, provides:  WT/DS477/R • WT/DS478/R  
 
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  2.59.   Pursuant to the above provisions , the animals216 listed in Appendix I and Appendix  II of 
MOT 46/2013 , as amended, can only be imported for the purposes  of improving genetic quality 
and diversity; dev eloping science and technology; overcoming domestic deficiencies of seeds, 
breeders and/or feeders; and/or fulfilling research and development needs.217. For animal 
products, the  bovine c arcasses, meats, and/or offals listed in Appendix  I of MOT 46/2013  can also 
be imported for the use and distribution of industry, hotels, restaurants, catering, and/or other 
special needs.218 The non -bovine carcasses, meats, and/or offal listed in Appendix II of Article  32 
of MOA 139/2014 , as amended by MOA 2/2015,  may be impor ted only for the same purposes as 
the bovine products specified in Appendix I and, additionally, for sale in "modern markets ".219  
2.3.3.6   Measure  15: Domest ic purchase requirement for beef  
2.60.   Measure 15 consists of the require ment imposed upon  importers of large rumin ant meats to 
absorb local beef .220 Indonesia implements this Measure pursuant to  Article s 5(1)221, and (1)222, 
26(1)223 and 39(b) -(c)224 of MOA 139/2014 , as amended . 
                                                                                                                                                  
RI-Animals and Animal Products that have obtained Import  Approval must submit a cattle and beef 
distribution report in the form of the report templates included in Appendix V and Appendix VI, which 
are an integral part of this Ministerial Regulation.  Exhibit JE -21. 
213 Article 26 of MOT 46 /2013, as amended, prov ides: 
Confirmation as a RI -Animals and Animal Products is suspended if a company:  
a. does not fulfill the realization obligation of its Import Approval, as described in Article 13; and/or  
b. does not fulfill the obligation to submit a report as described i n Article 25 as many as 3 (three) times.  
Exhibit JE -21. 
214 Article  32 of MOA 139/201 4, as amended , provides as follows:  
(1) Intended use, as described in Article 30, item (j), for bovine meat, as described in Article 8, 
includes for: hotel, restaurant, cate ring, manufacturing, and other special needs.  
(2) Intended use, as described in Article 30, item (j), for carcasses, and/or non -bovine meat and 
processed meats, as described in Article 8, includes for: hotel, restaurant, catering, 
manufacturing, other spec ial needs, and modern markets.  
(3) Other special needs, as described in paragraph (1) and paragraph (2), include:  
a. gifts/grants for public worship, charity, social services, or for natural disaster mitigation;  
b. the needs of foreign country/internationa l institution representatives and officials on 
assignment in Indonesia,  
c. the needs of science research and development; or  
d. sample goods that are not for trade (e.g., that are for exhibition) that are up to 200 (two 
hundred) kilograms.  
(4) The intende d use, as described in Article 30, item (j), of State -Owned Enterprises, as 
described in Article 23, paragraph (3), is to fulfill sufficiency needs and activities of market 
operations.  
(4) The intended use, as described in Article 30, item (j), for imports  by State -Owned 
Enterprises, as described in Article 23, paragraph (3), is to stabilize prices through market 
operation activities and to provide disaster relief . Exhibit JE -28. 
215 Article 39(d) of MOA 139/2014, as amended, relevantly provides : 
Business Ope rators, State -Owned Enterprises, Regional -Government Owned Enterprises, Social 
Institutions, or Foreign Country/International Institution Representatives that violate the provisions in:  
… (d) Article 32 will be subject to sanctioning in the form of Recomme ndation revocation, not being 
given Recommendation in the future, and will have their Import Approval Letter (SPI) and status as a 
Registered Importer (IT) of Animal Products proposed to the Min ister of Trade for revocation. Exhibit 
JE-28. 
216 Animals, as de scribed in Article 2, paragraph (2) , of MOT 46/2013, as amended , Exhibit JE -21. 
217 Article 3. a. -d. of of MO T 46/2013, as amended , Exhibit JE -21. 
218 Article 17 of MOT 46/2013, as amended, Exhibit JE -21. 
219 Articles 30(j) and 32(2) of MOA 139/2014. Exhibit JE -28. 
220 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written submission, para. 59; United  States'  first written submission, paras. 129 -130. 
221 Article 5(1) of MOA 139/2014 provides as follows:  
(1) Business O perators, State -Owned Enterprises, or Regional Government -Owned Enterprises, 
as described in Article 4, that import large ruminant meats must absorb local beef from slaughter 
houses that have a Veterinary Control Number.  
(2) The absorption of local beef, a s described in paragraph (1), must be verified by the Provincial 
and/or Regency/Municipal Agency from which the local beef originates . Exhibit JE -28. 
222 Article 24(1) of MOA 139/2014, as amended provides as follows:  
(1) Recommendation applications that are submitted by Business Operators, State -Owned 
Enterprises and Regional Government -Owned Enterprises, must include the following:  
a. Identity card (KTP) and/or identification as the head of the company;  
b. Tax Identification Number (NPWP);  
c. Trade Business License (SIUP);  
d. Registration Certificate or Business License in the field of livestock and animal health;  WT/DS477/R • WT/DS478/R  
 
- 39 - 
 
  2.61.   Pursuant to t hese provisions , in applying for a Recommendation, importers must submit  
proof of local  beef purchases duly  verified by the provincial agency or municipality of origin.  
Accordingly, business operators, state -owned enterprises, or regional government -owned 
enterprises that import large ruminant meats must absorb local beef when applying for a  
Recommendation.  
2.3.3.7   Measure  16: Beef reference price  
2.62.   Measure 16 consists of the implementation of a reference price system on imports of 
Appendix  I animals and animal products and the ensuing suspension of imports when the  domestic  
market price of secondary beef cuts falls below the pre -established reference price.225 This 
Measure is implemented by means of Article 14 of MOT 46/2013 , as amended .226  
2.63.   Pursuant to these provisions , in the event that the market price of secondary cuts of beef is 
below the reference p rice, imports of animals and animal products, as included in Appendix I , are 
suspended . Imports are resumed when the market price reaches again the reference price . The 
reference price  is set at 76,000 Rupiah/kg.227 
2.3.3.8   Measure  17: Import licensing regime for an imals and animal products as a 
whole  
2.64.   This measure consist s of Indonesia's import licensing regime for animals and animal 
products, as maintained th rough MOT 46/2013 , as amended, and MOA 139/2014 , as amended by 
                                                                                                                                                  
e. Certificate of incorporation, with its most recent amendments;  
f. Veterinary Control Number (NKV);  
g. Confirmation as a Registered Importer (IT)  of Animal Products;  
h. Stamped statement letter regarding ownership of cold storage and cold transportation facilities 
complete with supporting proof/documents, except for ready -to-eat processed meat imports that 
do not need cold storage facilities as per  the information on the product label;  
i. Recommendation from provincial Agency;  
j. Employment of a competent veterinarian in the field of veterinary public health, proven with a 
letter of appointment or work contract from the company head;  
k. Importation realization report from the previous period;  
l. Proof of local beef meat absorption verified by the provincial Agency and/or 
regency/municipality from which the local beef originates; and  
m. Stamped statement letter stating that all the documents submitted  are correct and legally 
valid. Exhibit JE -28. 
223 Article 26(1) of MOA 139/2014, as  amended, provides:  
An application is rejected , as described in Article 25,  if it does not meet the requirements described in 
Article 5, … and a rejection letter will be issu ed by the Director of Veterinary Public Health and Post -
Harvest to the importer via online and/or manually with a copy to Director General of Livestock and 
Animal Health, in accordance with Format -2. Exhibit JE -28. 
224 Article 39(b) -(c) of MOA 139/2014, as a mended, relevantly provides:  
Business Operators, State -Owned Enterprises, Regional -Government Owned Enterprises, Social 
Institutions, or Foreign Country/International Institution Representatives that violate the provisions in:  
(b) Article 5; (c) Article 2 4 paragraph (1) … item (l) … will be subject to sanctioning in the form of 
Recommendation revocation, not being given Recommendation in the future, and will have their Import 
Approval Letter (SPI) and status as a Registered Importer (IT) of Animal Products  proposed to the 
Minister of Trade for revocation. Exhibit JE -28. 
225 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written submission, para. 62; United  States'  first written submission, para. 131. 
226 Article  14 of MOT 46/2013, as amended , provides as follows:  
(1) In the event that the market price of secondary cuts of beef is below the reference price, 
imports of Animals and Animal Products, as included in Appendix I, of this Ministerial Regulation 
are postpo ned until the market price reaches its reference price.  
(2) The reference price of secondary cuts of beef, as described in paragraph (1), is Rp 
76,000.00/kg (seventy -six thousand rupiah per kilogram).  
(3) The reference price of beef, as described in paragr aph (2), can be evaluated at any time by 
the Beef Price Monitoring Team, which is formed by the Minister and whose membership consists 
of representatives from relevant agencies.  
(4) Based on the results of the aforementioned evaluation, as described in par agraph (3), the 
Beef Price Monitoring Team then proposes a reference price to the Minister in order to set a new 
reference price. Exhibit JE -21. 
227 Article 14 of MOT 46/2013, as amended , Exhibit JE -21. This price level has remained unchanged 
since it became  effective on 2 September 2013.  Indonesia 's response to Panel question No.  35. WT/DS477/R • WT/DS478/R  
 
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  MOT 2/2015, as a whole.228 We refer to the vario us subsections describing the individual elements 
of this regime which have been challenged as separate Measures 10 to 16.  
2.3.4   Measure  18: Sufficiency of domestic production to fulfil domestic demand  
2.65.   Measure 18 consists of the requirement whereby importation o f horticultural products, 
animals and animal products depend s upon Indonesia's determination of the sufficiency of 
domestic supply  to satisfy domestic demand .229 This measure is encompassed by Article  36B230 of 
the Animal Law Amendm ent, Article 88 of the Horti cultur e Law, Article s 14 and  36 of the Food 
Law231 and Article 30 of the  Farmers Law.232 
2.66.   Pursuant to these provisions , importation of horticultural products, animals and animal 
products is contingent upon the sufficiency of domestic supply for consumption and /or government 
food reserves.  
3  PARTIES' REQUESTS FO R FINDINGS AND RECOM MENDATIONS  
3.1  New Zealand  
3.1.  New Zealand  requests that the Panel finds that:  
a. Indonesia’s import licensing regime for animals and animal products is  inconsistent with 
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture, both 
                                                
228 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, para. 274;  New Zealand 's responses to the Panel Q uestion n o. 82, paras. 16 -21. New 
Zealand 's second opening statement, paras. 6 -8; United  States'  first written submission, para. 211.  
229 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written submission, paras. 15 -16 and 67; United  States'  first written submission, paras. 13 and 82 -83. 
230 Article 36B of the Animal Law Amendment provides as follows:  
(1) Importation of Livestock and Animal Product from overseas into the Territory of the Republic 
of Indonesia can be perfo rm if domestic production and supply of Livestock and Animal Product 
has not fulfill public consumption.  
(2) Importation of Livestock as intended in paragraph (1) must be in the form of Feeder.  
(3) Importation of large ruminants Feeder cannot exceed certai n weight.  
(4) Every Person that performs importation of Feeder as intended in paragraph (2) must obtain 
permit from the Minister.  
(5) Every Person that import Feeder from overseas as intended in paragraph (2) must perform 
fattening domestically to obtain a dded value in a time period of 4 (four) months at the soonest 
since quarantine measure is performed in the form of discharge.  
(6) Importation of Livestock from overseas as intended in paragraph (2) and paragraph (3) 
must:  
a. fulfill the technical requireme nt of Animal Health;  
b. free of Infectious Animal Disease required by Veterinary Authority;  
c. fulfill the provision of the regulating legislation in the field of animal quarantine.  
(7) Importation of Livestock from overseas to be bred in Indonesia must:  
a. fulfill technical requirement of Animal Health;  
b. free of Infectious Animal Disease required by Veterinary Authority; and  
c. fulfill the provision of the regulating legislation in the field of Animal quarantine.  
(8) Further provision regarding importati on of Livestock and Animal Product as intended in 
paragraph (1) as well certain weight as intended in paragraph (3) is regulated by Ministerial 
Regulation. Exhibit JE -5. 
231 Article 36 of the Food Law establishes as follows:  
(1) Import of Food can only be do ne if the domestic Food Production is insufficient and/or cannot 
be produced domestically.  
(2) Import of Basic Food can only be done if the domestic Food Production and the National Food 
Reserve insufficient.  
(3) The sufficiency of domestic Basic Food Prod uction and the Government Food Reserves is 
determined by the minister or the government agency tasked with carrying out government work 
in the field of Food . Exhibit JE -2. 
232 Article 30 of the Farmers Law provides as follows:  
(1) Every Person is prohibited from importing Agricultural Commodities when the availability of 
domestic Agricultural Commodities is sufficient for consumption and/or Government food 
reserves.  
(2) Sufficiency of consumption and Government food reserves as intended in paragraph (1) is 
stipulated by the Minister.  Exhibit JE -3. WT/DS477/R • WT/DS478/R  
 
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  when viewed as a single measure and when its components are viewed as individual 
measures233; 
b. Indonesia’s import licensing regime for horticultural products is  inconsistent with 
Article  XI:1 of the GAT T 1994 and Article 4.2 of the Agreement on Agriculture , both 
when viewed as a single measure and when its components are viewed as individual 
measures234; 
c. Indonesia’s import restrictions based on the sufficiency of domestic production are 
inconsistent with A rticle XI:1 of the GATT 1994 and Article 4.2 of the Agreement on 
Agriculture235; 
d. the Domestic Purchase Requirement for beef and the restrictions on use, sale and 
distribution  of animals and animal products are inconsistent with Article III:4 of the 
GATT 1994  to the extent they affect the internal sale, offering for sale, purchase, 
transportation, distribution or use of products236; 
e. the restrictions on use, sale and d istribution of horticultural products are inconsistent 
with Article III:4 of the GATT  1994 to the extent they affect the internal sale, offering for 
sale, purchase, transportation, distri bution or use of products237; and 
f. the limited application windows and validity periods for MOA Recommendations and 
Import Approvals for animals and animal products and  horticultural products are 
inconsistent with Article 3.2 of the Import Licensing Agreement  to the extent that they 
are non -automatic import licensing procedures.238 To the extent that the application 
windows and validity periods are automatic licensing proc edures, New Zealand  submits 
that they would be inconsistent with Article 2.2(a) of the Import Licensing Agreement .239 
3.2.  Accordingly, New Zealand  requests that the Panel recommend to the DSB that Indonesia 
brings its prohibitions and restrictions on the imports  of animals and animal products and 
horticultural products into conformity with its WTO obligations.240  
3.2  United  States  
3.3.  The United  States  requests that the Panel finds241 that the prohibitions and restrictions 
imposed by Indonesia’s import licensing regimes for  horticultural products and animals and animal 
products, operating individually and as whole regimes, and the provisions of Indonesia’s laws 
conditioning importation on the insufficiency of domestic production to fulfil domestic demand, are 
inconsistent wi th Article  XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture.242  
3.4.  The United  States  also requests that to the extent that the Panel finds that the limited 
application windows and validity periods for MOA Recommendations and Import Approva ls, both 
for horticultural products and for animals and animal products , are subject to the disciplines of the 
                                                
233 New Zealand's Panel Request, pp. 4 -6; first written submission, para. 435.  
234 New Zealand's Panel Request, pp. 1 -4; first written submission, para. 435.  
235 New Zealand's Panel Request, pp. 6 -7; first written submis sion, para. 435.  
236 New Zealand 's Panel Request, fn. 12 and  14; first written submission, para. 435.  
237 New Zealand's Panel Request, fn. 7; first written submission, para. 435.  
238 New Zealand's Panel Request, fn. 5 and 8; first written submission, para. 435.  
239 New Zealand' s response to Panel question No. 5.  
240 New Zealand' s first written submission, para. 437; second written submission, para. 310.  
241 The Panel notes that in response to Panel question No. 4, the United  States explained that it " has not 
presen ted any argumentation concerning Article III:4 of the GATT 1994 and has not asked the Panel to make 
findings concerning the inconsistency of the challenge d measures with Article III:4. Nor has the United  States  
at this point defi nitively withdrawn these cl aims". Similarly, in  response to Panel question No. 5, the 
United  States stated that it " has not presented any argumentation concerning Article 2.2 of the Import 
Licensing Agreement and we have not asked for findings concerning the consistency of the chall enged 
measures with Article 2.2(a). Nor has the United  States  at this point defin itively withdrawn these claims". The 
United  States has not presented any subsequent request for findings by the Panel under these two provisions.  
242 United  States' Panel Reque st; United  States'  first written submission, para. 395; second written 
submission, para. 242.  WT/DS477/R • WT/DS478/R  
 
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  Import Licensing Agreement , these requirements would be inconsistent with Article 3.2 of that 
Agreement.243 
3.5.  Accordingly, the United  States  requests , pursuant to Article 19.1  of the DSU , that the Panel  
recomm ends the DSB that Indonesia bring the  challenged  measure s into conformity with its WTO 
obligations.244 
3.3  Indonesia  
3.6.  Indonesia requests the Panel to reject the co -complainants' claims in their entirety.245 
4  ARGUMENTS OF THE PAR TIES  
4.1.  The arguments of the parties are reflected in their executive summaries, provided to the 
Panel in accordance with paragraph 18 of the Working Procedures adopted by the Pan el (see 
Annexes B -1 and B -2). 
5  ARGUMENTS OF T HE THIRD PARTIES  
5.1.  The arguments of Argentina, Australia, Brazil,  Canada, the European Union, Japan, Korea, 
Norway, Paraguay  and Chinese Taipei are reflected in their executive summaries, provided in 
accordance with paragraph 21 of the Working Procedures ado pted by the Panel (see Annexes C -1, 
C-2, C-3, C-4, C-5, C-6, C-7, C-8, and C -9).  
6  INTERIM REVIEW  
6.1  Introduction  
6.1.  On 12 July 2016 , the Panel issued its Interim Report to the parties. On 26 July 2016, 
New Zealand, the United  States and Indonesia submitted writt en requests for the review of the 
Interim Report. No party requested an interim review meeting. On 2 August 2016, New Zealand 
and the United  States submitted comments on Indonesia's request for review.  Indonesia did not 
submit comments on the co -complainan ts' requests for review.  
6.2.  In accordance with Article  15.3 of the DSU, this Section of the Panel Report sets out the 
Panel's response to the parties' requests for review of precise aspects of the Report made at the 
interim review stage. The Panel modified as pects of its Report in the light of the parties' comments 
where it considered it appropriate, as explained below. In addition, the Panel also corrected a 
number of typographical and other non -substantive errors, including those identified by the 
parties. R eferences to sections and paragraph numbers in this Section relate to the Interim Report, 
except as otherwise noted.  
6.2  Factual Aspects  
6.3.  Regarding paragraph 2.8, t he United States requested that the Panel make explicit that the 
measures within our terms of ref erence are those that were in effect at the time the Panel was 
established.246 The United States thus asked us to insert a footnote in the Report including 
references to Article  7.1 of the DSU and to some jurisprudence. No other party has commented on 
this request.  
6.4.  The Panel observes that the United States' request  relates to the descriptive part of the 
Interim Report, where the parties already had the opportunity to present their views on 2 June 
2016. We recall that, at that time, the United States submitte d a comment on that same 
paragraph but in relation to a different issue. The Panel  considers that the understanding that the 
measures at issue in this dispute are those in effect at the time of the Panel's establishment is 
already reflected in Section  2.3 of the Report entitled "Measures at issue". T he Panel thus declines 
to make the changes suggested by the United States.  
                                                
243 United  States' Panel Request, fn. 5 and 8; United  States ' first written submission, paras. 384 and 
394.  
244 United  States ' first written submission, para. 395.  
245 Indonesia 's first written submission, para. 189; second written submission, para. 278.  
246 United States' comments on the Interim Report of the Panel , para. 4.  WT/DS477/R • WT/DS478/R  
 
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  6.3  Structure of the findings  
6.5.  According to t he United States,  panel reports frequently contain a section in which the panel 
sets out its app roach to interpretation  of the covered agreements as well as the standard of review 
and burden of proof.247 The United States suggested that  the Panel insert a section at the outset of 
its findings set ting out our approach to these issues.  No other party has  commented on this 
request.  
6.6.  The Panel notes that there is no common approach to inserting introductory sections as 
suggested by the United States .248 Nonetheless, our approach to the terms of reference, standard 
of review or burden of proof in the context o f the present proceedings has been punctually 
addressed by the Panel where relevant. For instance, the Panel's approach to our terms of 
reference was amply discussed in our Preliminary Ruling of 5 July 2016.249 Similarly, the Panel's 
understanding on the bur den of proof was discussed in the context of Article  XX of the GATT  1994 
and the order of analysis the Panel should follow, as evidenced in paragraph 7.34 below . 
Consequently, the Panel declines to make  the changes suggested  by the United States.  
6.4  Whether certain challenged measures are the results  of decisions by private actors  
6.7.  Regarding paragraphs 7.3 to 7.26, the United  States submitted that Indonesia had not 
argue d that the measures at issue were not thems elves attributabl e to Indonesia  but that the 
limiting effects demonstrated by the co-complainants were not attributable to the Indonesian 
measures because they were entirely the result of the choices of private actors.250 The United 
States thus suggest ed that the Panel either move its discussion  on whether certain measures are 
the result of private actions  to the Section of the Report addressing the co-complainants'  claims 
under Article XI:1 of the GATT 1994  or, alternatively,  this issue be addressed separately under the 
Article XI:1 analyses of Measur es 1, 2, 3, 5, 11, 12, and 13.251 No other party has commented on 
this request.  
6.8.  While we acknowledge that, in some instances, Indonesia seemed to have argued that the 
limiting effect of a number of its Measures was the result of t he decision of private actors, this 
does not, however, detract from the fact that Indonesia  presented this discussion under Article 4.2 
of the Agreement on Agriculture252 and Article XI:1 of the GATT 1994.253 To us, this issue goes to 
the core of our jurisdict ion and should be addressed  before entering into the substantive analysis 
of the relevant claims at issue , as the Panel has done . For these reasons, the Panel declines to 
make the changes suggested by the United States.  
6.5  Whether an adverse trade effect test  is necessary for a determination under 
Article  XI:1 of the GATT  1994  
6.9.  Regarding paragraphs 7.47 and 7.49, the United States requested that the Panel change the 
term "ruling" when referring to the Appellate Body's report in Argentina – Import Measures  and 
use instead the term of "findings" or, alternatively , "guidance" to describe the referenced section 
in the Appellate Body’s report.254 No other party has commented on this request. The Panel made 
adjustments accordingly in paragraphs 7.47 and 7.49.  
                                                
247 United  States' comments on the Interim Report of the Panel , para. 3.  
248 See, for instance, the Panel Reports India – Agricultural Products ; US – Animals ; India – Solar Cells; 
Argentina  – Financial Services . 
249 See Annex A -1. 
250 United States' comments on the Interim Report of the Panel , para. 4 (referring to Indonesia's first 
written submission, p aras. 69, 78, 86, 101, 141, 147 and  163; second written submission, paras. 75 and 177).  
251 United States' comments on the Interim Report of the Panel, para. 7.  
252 For instance, Indonesia argued that "[m]easures that are not maintained, resorted to, or reverted t o 
by a Member are also excluded from the scope of Article 4.2. Thus, a 'measure' that is in fact the result of the 
decisions of private actors is not included in the scope of measures prohibited by Article 4.2" . Indonesia's first 
written submission, para. 52. 
253 For instance, Indonesia argued that "Article XI:1 provides that only those prohibitions or restrictions 
'instituted or maintained' by any Member are prohibited. Measures are 'instituted or maintained' by a Member 
when they are the direct result of go vernment action, and not dictated by the actions of private parties" . 
Indonesia's first written submission, para. 119.  
254 United States' comments on the Interim Report of the Panel, para. 8.  WT/DS477/R • WT/DS478/R  
 
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  6.6  Evidentiar y weight given to administrative practice vs. legal text  
6.10.   Indonesia requested the Panel to provide further clarification with respect to the evidentiary 
weight it ascribed to the plain text of Indonesia's  laws and regulations versus the common practice 
of implementing agencies, in the light of the Panel's apparent inconsistency with respect to the 
treatment of both categories throughout its report.255 Indonesia noted some disparity between the 
Panel's treatment of administrative practice in its Interim Report.  For Indonesia, in several 
instances, the Panel seemed to adopt the co -complainants' assertions that importers, in practice, 
are limited by the operation of Indonesia's import licensing regime256 while it seemed that similar 
arguments made by Indonesia regar ding the regular practice of its administrative agencies in 
implementing the import licensing regime were deemed insufficient.257 Indonesia then quoted 
paragraph  7.84 of the Interim Report referring to Article  11 of MOT 71/2015  in the conte xt of the 
Panel's analysis of Me asure 1258 and submitted that this Measure, although outside the Panel's 
terms of reference, was introduced as an example of the agency's regular practice regarding the 
timing of approvals.259 Indonesia further argued that, in its analysis of Mea sure 4, the Panel 
accepted the arguments of the co -complainants that administrative practice is more persuasive 
than the plain text of the regulation. Indonesia quotes part of paragraph  7.151 of the Interim 
Report  in support of its argument .260 
6.11.   Both co -compl ainants objected to Indonesia's request for review.261 New Zealand submitted 
that the Panel appropriately weighed the evidence before it and it is therefore not necessary for 
the Panel to provide the further clarification requested by Indonesia.262 New Zealand  noted that, in 
the example provided by Indonesia regarding Measure 4, the Panel made its findings in part based 
on the extensive evidence submitted by the co -complainants . For New Zealand, the fact that the 
Panel reached factual findings on the basis of t he evidence before it in respect of one measure and 
factual findings on the basis of other evidence that it weighed appropriately in respect of another 
measure does not amount to an "inconsistency" in treatment.263   
6.12.   The United States submitted that the "app arent inconsistency" identified by Indonesia does 
not exist and that the Panel has made an objective assessment and exercised its discretion to give 
the evidence the weight it considered due.264 With respect to Measure 1, the United States noted 
that the co -complainants pointed out that the regulation in force at the time of the Panel's 
establishment stipulated that Import Approvals were issued at the beginning of each semester and 
that, in contrast, Indonesia asserted that Import Approvals are issued within two days. The United 
States pointed out that, in making this claim, Indonesia had cited a regulation that was issued 
after the establishment of the Panel but that, in any event, the said regulation did not support 
Indonesia’s assertion because it was silen t on when Import  Approvals are issued.265 With respect 
to Measure 4, the United States maintained that the Panel found that, although the text of the 
regulation "does not expressly restrict importation in terms of specific quantities", the operation of 
the Measure  demonstrated its limiting effect on importation.266 The United States submitted that in 
coming to this conclusion, the Panel relied in part on evidence submitted by the co -complaints in 
the form of letters from Indonesian officials describing the harv est period restrictions and trade 
data showing sharp declines for the affected horticultural  products.267 For the United States, far 
from treating the parties' evidence differently, the Panel simply found the co -complainants’ 
evidence persuasive as to the me aning of the challenged measure.268  
                                                
255 Indonesia's comments on the Interim Report of the Panel, para. 1 2. 
256 Indonesia's comments on the Interim Report of the Panel, para. 8 (referring to Interim Panel Report, 
para. 7.91).  
257 Indonesia's comments on the Interim Report of the Panel, para. 8.  
258 Indonesia's comments on the Interim Report of the Panel, para. 9.  
259 Indonesia's comments on the Interim Report of the Panel, para. 10.  
260 Indonesia's comments on the Interim Report of the Panel, para. 11.  
261 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 10; 
United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 20.  
262 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 12.  
263 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 12. 
264 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 16.  
265 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 17 
(referring to the Interim Report of the Panel, para. 7.84).   
266 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 18 
(referring to the Interim Report of the Panel, para. 7.151).  
267 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 18 
(referring to the Interim Report of the Panel, paras. 7.151 -7.155).   
268 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 18.  WT/DS477/R • WT/DS478/R  
 
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  6.13.   The Panel observes that Article  15.2 of the DSU, and paragraph 22 of the Panel's Working 
Procedures, provide parties with an opportunity to request the Panel "to review precise aspects of 
the interim report". Previous pan els have declined to expand the scope of interim review beyond 
that provided for in Article 15 .2 and have accordingly circumscribed their review to address only 
those comments  that relate to "precise aspects " of the interim report .269 The Panel notes the 
general terms in which Indonesia put forward its statement that there is a disparity in the 
treatment of Indonesia's laws and regulations versus the common practice of implementing 
agencies. Indonesia only identifies three paragraphs270 of the Interim Report  referring to the 
Panel's analysis of the consistency of two (out of 18) measures at issue with Article XI:1 of the 
GATT  1994 and that would allegedly represent instances of such a disparity. We shall therefore 
consider Indonesia's request for review with res pect to the three  paragraphs it mentioned . 
6.14.   We commence with paragraph 7.84, where the Panel assessed Indonesia's reliance upon  
Article 11 of MOT 71/2015 in seeking to respond to allegations about the time it takes to receive 
an Import A pproval , in the cont ext of our analysis of Measure 1 under Article XI:1 of the GATT 
1994. In particular, Indonesia had attempted to persuade the Panel that, contrary to the explicit 
text of Article  13(A) of MOT 16/2013, as amended, Import Approvals were not issued at the 
beginning of each semester, but rather, within two days after the request s are received by the 
Ministry of Trade . In paragraph  7.84, we amply discussed why Indonesia's argument was 
inapposite to prove its point. First, we recalled that MOT 71/2015 was issued a fter the 
establishment of this Panel and is therefore not within  our terms of reference. Furthermore, as the 
Panel remarked, there is nothing in Article 11 of MOT 71/2015 that would support Indonesia's 
contention that Import Approvals are issued within two  days after the requests are received by the 
Ministry of Trade.  Indeed, as we pointed out in the Interim Report, this provision does not touch 
upon the timeframes for the issuance of Import Approvals.  In this sense, we fail to see how 
Article  11 of MOT 71/ 2015 constitutes an example of the A gency's regular practice as Indonesia is 
arguing.   
6.15.   Concerning paragraph  7.91, we note that it includes our conclusion where we agree with  the 
co-complainants that the way Measure  1 is designed and structured results in a  limitation of the 
competitive opportunities of importers in practice because it restricts the market access of 
imported products into Indonesia. Unlike Indonesia appears to be arguing, we do not simply 
"adopt the co -complainants' assertions that importers , in practice, are limited by operation of 
Indonesia's import licensing regime".271 Rather, we concur  with the co -complainants' view after 
having duly examined the design, architecture and revealing structure of Measure  1.272 
6.16.   Regarding paragraph 7.151, Indones ia argued that, in our analysis, the Panel accepted the 
arguments of the co -complainants that "administrative practice" is more persuasive than the plain 
text of the regulation.273 We disagree with this interpretation of our findings. As evidenced in 
paragra phs 7.151 to 7.155, in reaching the conclusion that Measure 4 is inconsistent with 
Article  XI:1 of the GATT 1994, the Panel examines the design, architecture and revealing structure 
of Measure  4 in the light of the evidence submitted by the parties. We not e that, in this analysis, 
we did not refer to " administrative practice" but only to the fact that while there was no express 
numerical limit set out in the text of the regulation, the consequence of temporarily limiting 
importations was that of a quantitat ive restriction prohibited under Article XI:1 of the GATT  1994.   
6.17.   For these reasons, the Panel declines to make  the changes suggested by Indonesia.  
6.7  Preliminary issues and claims pursuant Article  XI:I of the GATT 1994  
6.18.   Regarding paragraphs 7.10, 7.15, 7.20, 7 .23, and 7.175, the United States requested the 
Panel to make some  changes  in the language used when describing its arguments on the grounds 
that the United States had not refer red to volumes of imports in its submissions with respect to 
these measures, bu t referred more generally to the limiting effect on importation.274 No other 
                                                
269 Panel Report s, Japan – Alcoholic Beverages II , para. 5.2; Australia – Salmon , para. 7.3;  Japan – 
Apples (Article 21.5 – US), para. 7.21 ; India – Quantitative Restrictions , para. 4.2;  Canada – Continued 
Suspension , paras. 6.16 –6.17; US – Continued Suspension , paras. 6.17 –6.18; India – Agricultural Products , 
para. 6.5; China – GOES (Article 21.5 – US), para. 6.21.  
270 Paragraphs  7.84, 7.91 and 7.151.  
271 Indonesia's comments on the Interim Report of the Panel, para. 8.  
272 See paragraphs  7.77-7.89 of the Interim Report of the Panel.  
273 Indonesia's comments on the Interim Report of the Panel, para. 11.  
274 United States' comments on the Interim Report of the Panel, para. 9 .      WT/DS477/R • WT/DS478/R  
 
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  party has commented on this request. The Panel made adjustments accordingly in paragraphs 
7.10, 7.15, 7.20, 7.23 and 7.175.  
6.8  Claims pursuant Article XI:I of the GATT  1994  
6.19.   Regarding p aragraphs 7.73, 7.101, 7.122, 7.166, 7.310, 7.337  and 7.363 , the United States 
suggested that the Panel may wish to choose a consistent formulation when describing the "task 
before the P anel"275 in the referred paragraphs. The United States requested that th e Panel revise 
the mentioned paragraphs  to conform to the language used by the Panel in its interpretation of 
Article XI:1  of the GATT 1994 , in particular, to eliminate the reference to the limiting effect on the 
volume of imports and refer instead to the limiting effect on importation.276 The United States also 
asked that the Panel, in using the phrase  "limiting effect on imports" or "limiting condition on 
imports"  throughout the Final Report, replace th e word "imports" so that the phrases would read 
"limiti ng effect on importation" and " limiting condition on importation. "277 No other party has 
commented on this request. The Panel made adjustments accordingly in paragraphs  7.73, 7.101, 
7.122, 7.166, 7.310, 7.337 and 7.363 , where appropriate . 
6.9  Incentives created by the measures  at issue  
6.20.   Regarding the Panel's analysis of the measures at issue, Indonesia requested that the Panel 
be explicit regarding the incentives created by each element of the relevant measure at issue 
when reference is made to such incentives dri ving private behaviour.278 In particular, Indonesia 
noted that, in the context of Measure 2, the challenged measure includes several elements, i.e. 
quantity, product type and country of origin. With respect to quantity, Indonesia submitted that 
importers wer e previously incentivized to comply with a fixed quantity term in their import licences 
by the imposition of penalties associated with failure to achieve the 80% realization requirement. 
Indonesia asked the Panel to elaborate on its understanding of the in centives it perceives with 
respect to the quantity term of Measure 2 in order to provide clarity to Indonesia regarding the 
steps it needs to take to bring its measures into compliance given that this requirement is no 
longer in effect.279  
6.21.   The co -complainan ts objected to Indonesia's request.280 For New Zealand, the Panel has 
appropriately made findings under Article  XI:1 of the GATT 1994 on the basis of the overall 
"design, architecture and revealing structure" of the challenged measures and has provided 
exten sive reasoning for these findings in the Interim Report.281 New Zealand also submitted that it 
considered that the Panel had discharged its function under its terms of reference by making 
findings  based on the measures as set out in the co -complainants' pane l requests and that 
Indonesia's request to provide further elaboration is not necessary in order for the Panel to 
discharge its function.282  
6.22.   Similarly, the United States considered that the Panel has made sufficient findings with 
respect to the operation of  the measures to which Indonesia refers and disagrees with Indonesia' s 
request that additional findings are necessary. For the United States, t he Panel has already 
elaborated on the findings with regard to the challenged measures that create incentives a nd 
inducement to private actors.283 The United States also submitted that, to the extent that 
Indonesia is requesting the Panel to opine on whether Indonesia has already brought its measures 
into compliance, such a  request goes beyond this Panel' s term of refe rence .284 
6.23.   As with its prior request, Indonesia's request that we be more explicit regarding the 
incentives created by each element of the measures at issue when reference is made to such 
incentives driving private behaviour is crafted in very general terms. No specific references is 
made to the paragraphs or wording that Indonesia wishes us to review, apart from a reference to 
Measure  2 and paragraph  7.109 of our Interim Report. As explained in paragraph  6.13 above , we 
                                                
275 United States' comments on the Interim Report of the Panel, para. 10.  
276 United States' comments on the Interim Report of the Panel, para. 10.  
277 United States' comments on the Interi m Report of the Panel, para. 11.  
278 Indonesia's comments on the Interim Report of the Panel, para. 4.  
279 Indonesia's comments on the Interim Report of the Panel, para. 4.  
280 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, pa ra. 3; 
United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 10.  
281 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 4.  
282 New Zealand's comments on Indonesia's comments on the Inter im Report of the Panel, para. 5.  
283 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 4.  
284 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 9.  WT/DS477/R • WT/DS478/R  
 
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  shall ad dress Indonesia's comments  that relate  to "precise aspects " of the I nterim Report . In this 
instance, we address the comments concerning Measure  2 in paragraph  7.109 of our Interim 
Report.  
6.24.   In this respect, we recall that we have examined in detail the desi gn, architecture and 
revealing structure of Measure  2 in paragraphs  7.104 to 7.110 of the Interim Report and thus 
consider that we have already provided extensive  reasoning in our findings. Furthermore, in the 
event that Indonesia is asking us to assess th e impact of a repeal of the 80% realization element 
of Measure 3 with respect to Measure 2, we also recall that our terms of reference included the 
measures at issue at the time of this Panel's establishment. Therefore, establishing whether 
Indonesia has r epealed an element of Measure  3 (80% realization requirement) and its relevance 
in terms of compliance with the WTO Agreement is not within our terms of reference. We thus 
decline Indonesia's request to provide further clarification.  
6.10  Whether Measure  1 (Limited application  windows and validity periods ) is 
inconsistent with Article XI:1 of the GATT  1994  
6.25.   Regarding paragraph 7.87, Indonesia requested the Panel to clarify its analysis with respect 
to the role of geographical location in the design, architecture and revealing structure of 
Indonesia's import licensing regime. In particular , Indonesia asked whether the Panel is suggesting 
that the application windows and validity periods that would allow some  but not all Members to 
engage in continuous importation d ue to relative proximity would nonetheless be inconsistent with 
Article XI:1 of the GATT  1994.285 For Indonesia, a measure cannot be inconsistent with respect to 
certain Members but not to others, depending on their proximity.286 Indonesia thus argued that it 
is unclear how Indonesia  is meant to take into account the various geographical limitations of all of 
its trading partners in designing an import licensing regime.287  
6.26.   The co -complainants objected to Indonesia's request.288 New Zealand disagreed with 
Indonesia 's reading of the Interim Report and considered that the Panel's findings are clear in this 
regard.289 New Zealand noted that, with respect  to Measure 1, the Panel expressly states that "the 
effect on import ation can be attributed to the intrinsic  elements o f Measure  1"290, confirming that 
the restrictive effect of the measure is a consequence of the intrinsic features of the measure 
itself, not the geographical proximity of exporting Members.291 For New Zealand, the Panel found 
that the challenged measures are b y their design inconsistent with Article XI:1  of the GATT 1994, 
irrespective of the geographic circumstances of an exporting Member. In its view, the Panel did not 
find that a measure may be inconsistent with respect to certain Members but not inconsistent  as to 
others, depending on their proximity to Indonesia; nor did it find that a measure was " more 
inconsistent toward[ s] some Members than others" as Indonesia contends.292  
6.27.   For the United States, Indonesia mischaracterized the Panel's findings since t he Panel has 
found that Measure  1 is a limitation on importation because of its intrinsic elements. The United 
States pointed out that the Panel further supported its finding by noting  the negative effects of 
Measure 1 on the competitive opportunities  of import ed products.293 The United States argued that 
these elements apply to importers from every WTO Member regardless of their geographic 
location294 and that, contrary to Indonesia's assertion, the Panel did not find that Measure 1 is 
more inconsistent to wards som e Members than others.295  
6.28.   Concerning paragraph 7.87 , we observe that Indonesia interpret ed this paragraph of our 
analysis as meaning that the "the measure might be inconsistent with respect to certain Members, 
                                                
285 Indonesia's comments on the Int erim Report of the Panel, para. 16.  
286 Indonesia's comments on the Interim Report of the Panel, para. 15.  
287 Indonesia's comments on the Interim Report of the Panel, para. 15.  
288 New Zealand's comments on Indonesia's comments on the Interim Report of the Pane l, para. 13; 
United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 24.  
289 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 13.  
290 New Zealand's comments on Indonesia's comments on th e Interim Report of the Panel , para. 13 
(referring to Interim Report, paras. 7.86 ). (emphasis added  by New Zealand)   
291 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 14.  
292 New Zealand's comments on Indonesia's comm ents on the Interim Report of the Panel, para. 15 
(referring to Indonesia's comments on the Panel's Interim Report, para. 15 . (emphasis original)  
293 Interim Panel Report, para. 7.90.  
294 United States' comments on Indonesia's comments on the Interim Report of  the Panel, para. 22.  
295 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 23.  WT/DS477/R • WT/DS478/R  
 
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  but not as to others…"296 and th us argued  that a measure cannot be more inconsistent towards 
some Members than to others.297 We agree with Indonesia that a measure cannot be more 
inconsistent towards some Members than to others. This is not, however,  our conclusion with 
respect to M easure  1 and we thus dis agree with Indonesia's reading of our findings of 
inconsistency with Article XI:1 of the GATT  1994 in respect of Measure  1. Indeed, in 
paragraph  7.86, we explicitly concluded that the effect of Measure  1 on importation "can be 
attributed to the intrinsic e lements of Measure 1". Accordingly, we see no basis for Indonesia's 
interpretation of our findings and we thus decline Indonesia's request  to provide further 
clarification .  
6.11  Whether Measure  3 (80% realization  requirement ) is inconsistent with Article  XI:1 
of the GATT  1994  
6.29.   Referring to paragraph 7.131, Indonesia requested the Panel to either provide an analysis 
regarding the impact of the realization requirement, and its repeal, vis-à-vis the restrictive effects 
of other measures, or explicitly state that th e Panel declines to provide such analysis.298 Indonesia 
explained that the Panel's discussion of the realization requirement contains implications for other 
Measures and that Indonesia understands the Panel to be stating that the effects of Measures 2, 3 
and 7 are, to some degree, dependent upon each other. In this respect, Indonesia  argued that it 
understands that the removal of the realization requirement will therefore alter the impact of 
Measures 2 and 7.299 
6.30.    The co -complainants objected to Indonesia's requ est.300 In New Zealand's view, it is clear 
from the Interim Report that the Panel's findings of inconsistency in respect of each of the 
measures at issue are not "dependent" upon the operation of any other measures.301 For New 
Zealand, the Panel made clear in its Interim Report that each of the measures at issue in this 
dispute are, when viewed as stand -alone measures, inconsistent with Article XI:1 of the GATT 
1994.302 New Zealand submitted that, although the Panel observed  that the "limiting effects of the 
fixed terms imposed by Measure  2 are enhanced  by its interaction with Measure 3"303 and that the 
limiting effect of certain measures is "exacerbated" when combined with other measures304, this 
fact was not determinative of the Panel's finding that each of the indi vidual measures at issue is 
inconsistent with Article XI:1 in its own right.305  
6.31.   In the same vein, the United States submitted that, although the Panel found that the 80% 
realization requirement exacerbates the limiting effects of the other measures306, the Pa nel first 
found each measure to breach Article XI:1 of the GATT 1994 based on its own design, architecture 
and revealing structure and supporting evidence.307 The United States further submitted that the 
Panel has made sufficient findings regarding Measures 2 and 7 to support its conclusion under 
Article XI:1, independent of any exacerbating effect created by Measure 3.308 Lastly, the United 
States argued that, to the extent that Indonesia is requesting the Panel to find t hat, by removing 
the 80 % realization re quirement, Indonesia has already brought its measure  into compliance , the 
United States was of the view  that such a request went beyond the  Panel' s term s of reference.309 
6.32.   With respect to paragraph  7.131, we  observe that it includes our analysis of M easure  3 in 
the context of Indonesia's import licensing regime for horticultural products and in particular of 
Measures  2 and 7. This analysis follows our conclusion in the previous paragraph that the design, 
architecture and revealing structure of Measure  3 shows that this measure has a limiting effect in 
terms of volume of imports of horticultural products into Indonesia. Indonesia is asking us to 
                                                
296 Indonesia's comments on the  Interim Report  of the Panel , para. 15 . 
297 Indonesia's comments on the Interim Report  of the Panel, para. 15.  
298 Indonesia's comments on the Interim Report of the Panel, para. 7.  
299 Indonesia's comments on the Interim Report of the Panel, paras. 5 -6. 
300 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 6; 
United States' comments  on Indonesia's comments on the Interim Report of the Panel, para. 15.  
301 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 8.  
302 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 7. 
303 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 9 
(referring t o Interim Report, para. 7.111 , emphasis added).  
304 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 9 
(referr ing to Interim Report, para. 7.131 ). 
305 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 9.  
306 See Interim Panel Report, para. 7.131.  
307 United States' comments on Indonesia's comments on the Interim Report of the Pane l, para. 12.  
308 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 12.  
309 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 13.  WT/DS477/R • WT/DS478/R  
 
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  "either (i) provide analysis regarding the impact of the realization requirement (and its repeal) vis -
à-vis the restri ctive effects of other measures; or (ii) explicitly state that the Panel declines to 
provide such analysis".310 As explained in paragraph  6.24 above , our terms of reference included 
the measures at issue at the  time of this Panel's establishment. Therefore , establishing whether 
Indonesia has repealed an element of Measure  3 and its relevance in terms of compliance with the 
WTO Agreement is not within our terms of reference. We thus decline Indonesia's request.  
6.12  Whether Measure  5 (Storage ownership and capacity requirements ) is inconsistent  
with Article  XI:1 of the GATT 1994  
6.33.   With respect to paragraphs  7.175  to 7.178, Indonesia requested the Panel to explicitly 
confirm that its analysis is limited to the specific st orage ownership and capacity terms challenged 
by the co -complainants and is not generally applicable to all pre -importation storage requirements. 
In particular, Indonesia wanted to confirm that the Panel is not making any findings with respect  
to whether r equiring importers to obtain storage prior to importation is per se  inconsistent with 
Article XI:1.311   
6.34.   The co -complainants objected to Indonesia's request.312 New Zealand considered  that 
Indonesia's request should be declined because the scope of the Panel's  findings in respect of 
Measure 5 is clear from the Interim Report. In New  Zealand's view, it would not be appropriate for 
the Panel, in light of its terms of reference, to make statements regarding the applicability or 
otherwise of its analysis to measure s that are outside its terms of reference.313 The United States 
also considered that the Panel's finding and recommendation on Measure 5 appear to be clear. The 
United States further considered that Indonesia has not identified any ambiguity or error that 
would require the Panel to revise its Interim Report.314   
6.35.   We note that paragraphs  7.175 to 7.178 of our Interim Report include part of our analysis 
of the consistency of Measure  5 with Article XI:1 of the GATT  1994. Indonesia is asking us to 
clarify the scope  of that analysis in terms of the relevant measure. In our view, the scope of 
Measure  5 is clearly defined in paragraph  7.170 and, by reference, in Section 2.3.2.5 above . We 
are therefore only concluding that Measure  5, as d efined in paragraph  7.170 and, by reference, in 
Section 2.3.2.5 above , is inconsistent with Article XI:1 of the GATT  1994. We thus decline 
Indonesia's request.  
6.13  Whether Measure  6 (Use, sale and distribution requirements for horticultural  
products ) is inconsistent with Article  XI:1 of the GATT 1994  
6.36.   Regarding paragraph 7.180, New Zealand suggest ed that the last sentence of th is 
paragraph include a reference to the limiting effect through the additional distribution layer, which 
according to New Zealand, was raised in paragraph 252 of New Zealand's first written 
submission.315 No other party has commented on this request. The Panel made adjustments 
accordingly in paragraph 7.180.  
6.14  Whether Measure  10 (Prohibition of importation of cer tain animals and animal 
products) is inconsistent with Article  XI:I of the GATT 1994  
6.37.   Regarding paragraph 7.271, New Zealand suggested that the first sentence of this 
paragraph be amended to reflect New Zealand's submission that the positive list also opera tes to 
prohibit imports of bovine carcass and secondary cuts.316 No other  party has commented on this 
request.  The Panel made adjustments accordingly in paragraph 7.121.  
6.38.   Regarding paragraph 7.290, New Zealand suggested that the second sentence of this 
paragr aph be clarified to reflect New Zealand's submissions  that carcass and secondary cuts are 
                                                
310 Indonesia's comments on the Interim Report of the  Panel, para. 7.  
311 Indonesia's comments on the Interim Report of the Panel, para. 17.  
312 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 17; 
United States' comments on Indonesia's comments on the Interim Report of th e Panel, para. 25.  
313 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 17.  
314 United States' comments on Indonesia's comments on the Interim Report of the Panel, para. 27.  
315 New Zealand's comments on the Interim Report  of the Panel, para. 10.  
316 New Zealand's comments on the Interim Report of the Panel , para. 10 (referring to New Zealand's 
first written submission, para. 135).  WT/DS477/R • WT/DS478/R  
 
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  the only unlisted products which state -owned enterprises may be directed to import.317 No other 
party has commented on this request. The Panel made adjustments accordin gly in 
paragraph  7.290.  
6.15  Whether Measure  13 (80% realization requirement) is inconsistent with 
Article  XI:1 of the GATT 1994  
6.39.   Regarding paragraph 7.374, New Zealand suggested that for clarity, the word "with" be 
inserted in the first sentence of this paragra ph and the current word "with" be replaced with the 
word "to".318 No other party has commented on this request.  The Panel made adjustments 
accordingly in paragraph 7.374.  
6.16  Whether Measure  15 (Domestic purchase requirement for beef) is inconsistent 
with Articl e XI:1 of the GATT 1994  
6.40.   Regarding paragraph 7.401, New Zealand suggested that the penultimate sentence of this 
paragraph be clarified to reflect  paragraph 138 of New Zealand's second written submission by 
deleting the word "misleading."319 No other party has  commented on this request.  The Panel made 
adjustments accordingly in paragraph 7.401.  
6.17  Whether Measure  16 (Beef reference price) is inconsistent with Article  XI:1 of the 
GATT  1994  
6.41.   Regarding paragraph 7.443, in particular footnote 1313 referenced at the end  of the second 
sentence, New Zealand noted  that this footnote appears to have been deleted.320 No other party 
has commented on this request. The Panel made adjustments accordingly in paragraph 7.443.  
6.18  Whether Measure  18 (Sufficiency of domestic production to fulfil domestic 
demand) is inconsistent with Article XI:1 of the GATT  1994  
6.42.   Regarding paragraph 7.480, New Zealand noted that there appears to be a footnote missing 
at the conclusion of this paragraph, referring to New Zealand arguments."321 No other party ha s 
commented on this request. The Panel made adjustments accordingly in paragraph 7.480.  
6.19  Whether Measure  3 (80% realization requirement) is justified under Article  XX(d) 
of the GATT  1994  
6.43.   Regarding paragraph 7.600, New Zealand suggested that, in the sixth se ntence of this 
paragraph, the phrase " New Zealand does not consider it necessary to elaborate on a less trade -
restrictive measure" be amended to read "New Zealand does not consider it necessary to elaborate 
on a less trade -restrictive alternative  measure" in order to ensure consistency with New Zealand's 
second written submission.322 No other party has commented on this request. The Panel made 
adjustments accordingly in paragraph 7.600.  
6.20  Whether Measure 4 (Harvest period requirement ) is provisionally justified  under 
Article XX(b) of the GATT 1994  
6.44.   Regarding paragraph 7.634, the United States submitted that, in the context of the second 
sentence of this paragraph , the meaning of the phrase “sufficiency of domestic production fulfils 
domestic demand” is unclear an d would suggest an alternative formulation such as: “to ensure 
that the sufficiency of domestic production is protected from competition from imports  fulfils 
domestic demand ” or “to ensure that only the sufficiency of domestic production is used to  fulfills 
domestic demand.”323  No other party has commented on this request.  The Panel agrees with the 
United States that the existing wording may lack clarity and is thus redrafting the relevant 
sentence in paragraph 7.634 as follows: "Rather, the evidence point s to the objective as being to 
                                                
317 New Zealand's comments on the Interim Report of the Panel, para. 19 ( referring to New Zealand 's 
first written submission, para. 45 ). 
318 New Zealand's comments on the Interim Report of the Panel, para. 24.  
319 New Zealand's comments on the Interim Report of the Panel, para. 27.  
320 New Zealand's comments on the Interim Report of the Panel, para. 34.  
321 New Zealand's comments on the Interim Report of the Panel, para. 38.  
322 New Zealand's comments on the Interim Report of the Panel, para. 49.  
323 United States'  comments on the Interim Report of the Panel, para. 12.  WT/DS477/R • WT/DS478/R  
 
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  ensure that no importation takes place unless Indonesian authorities deem domestic production 
insufficient to fulfill domestic demand".  
6.21  Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products) is j ustified under Article  XX(d) of the GATT  1994  
6.45.   Regarding paragraph 7.756, New Zealand suggested that a sentence be added to the end of 
the paragraph in order to show that New Zealand considered a less trade restrictive alternative 
measure for the use, sale and distribution requirement in paragraph 261 of its second written 
submission.324 No other party has commented on this request.  The Panel made adjustment s 
accordingly in paragraph 7.757 .  
6.22  Conclusion concerning Indonesia's defence under Articles XX(a), (b) a nd (d) with 
respect to Measures 9 through  17 
6.46.   Regarding paragraph 7.829, the United States stated that, i n ord er to further support the 
Panel' s overall conclusion that Indonesia has not demonstrated that its restrictions on animals and 
animal products are j ustified under any claimed exception under Article XX, the United States  
would welcome findings addressed to the lack of a rational connecti on and the legal consequence 
that each me asure has not been shown to be "necessary."325 In the same vein, New Zealand 
requests  that, for completeness, it would be useful  if the Panel set s out the parties' arguments and 
completes the Panel's  analysis  of Indonesia' s defences under the relevant subparagraphs of 
Article  XX of the GATT 1994 in relation to all challenged measur es.326   
6.47.   While we understand the co -complainants' concerns about completing the analysis, we 
consider that, having found that all the relevant measures at issue ar e not applied in a manner 
consistent with the chapeau  of Article XX of the GATT  1994, continuin g the analysis would be 
unwarranted. As we explained  in paragraph  7.829, compliance with the chapeau  of Article XX is a 
necessary requirement in order for a measure to find justification under this provision. Therefore, 
even if the measures were found to b e "necessary" under subparagraphs  (a), (b) and/or (d) of 
Article  XX, Indonesia would not be able to rely upon these  defences  because the measures are not 
applied in a manner consistent with the chapeau.  In the event that the Appellate Body were to 
disagree  with our findings in this respect, the Panel has sufficiently developed the record so as to 
allow for the completion of the analysis should the Appellate Body deem it necessary. We thus 
decline the co -complainants' request.  
7  FINDINGS  
7.1  Preliminary issues  
7.1.1   Request for enhanced third -party rights  
7.1.  As described in Section  1.3.2 above , Australia, Brazil, Canada and the European Union jointly 
requested the Panel to enhance their third -party rights. The decision of the Panel is reprodu ced 
hereafter:  
The Panel refers to the joint communication dated 2 December 2015 from Australia, 
Brazil, Canada and the European Union (hereafter "the requesting third parties "), 
requesting the Panel to exercise its discretion under Arti cle 12.1 of the DSU  to modify 
its Working Procedures . The requesting third parties wish the Panel to grant them 
additional rights to those provided in Article  10 of the DSU, in particular: (i)  "to 
receive an electronic copy of all submissions and statements of the parties, i ncluding 
responses to Panel questions, up to the issuance of the interim report "327; and (ii) "to 
be present for the entirety of all  substantive meetings of the Panels  with the 
parties ".328 The requesting third parties submit that, in order to ensure that thei r 
                                                
324 New Zealand's comments on the Interim Repor t of the Panel, para. 59.  
325 United States' comments on the Interim Report of the Panel, para. 14.  
326 New Zealand's comments on the Interim Report of the Panel, para. 63.  
327 Joint letter from the requesting third parties dated 2 December  2015.  
328 Joint letter from the requesting third parties dated 2 December  2015.  WT/DS477/R • WT/DS478/R  
 
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  interests are fully taken into account, "third parties need to be aware of arguments 
and evidence that will be presented only in later stages in the dispute ".329   
Responding to the Panel's invitation to present their views on this request, both the 
United  States330 and Indonesia331 opposed the granting of enhanced rights to third 
parties in these proceedings. New Zealand, however, informed the Panel that it 
supports the request.332 In other words, the complainant (United States) and the 
respondent (Indonesia) in  DS478 are in agreement in opposing the granting of 
enhanced third party rights, while in DS477, only the respondent (Indonesia) opposes 
it.  
We understand that the additional rights requested are limited to allowing the third 
parties to be present during all substantive meetings without taking the floor, and to 
receiving all written communications of the parties without the right to present views 
on those communications. The requesting third parties are thus not seeking to have 
an active role in the procee dings outside the participatory rights already foreseen in 
our Working  Procedures, which are in line with Article 10 of the DSU.  
In our decision, we bear in mind that, although we enjoy discretion to grant additional 
rights to third parties as long as such  rights are consistent with the DSU and due 
process333, we must be mindful of the distinction drawn in the DSU between parties 
and third parties, which should not  be blurred.334 We note in this respect that, 
consistent with Article 10.2 of the DSU, all third p arties in a panel proceeding  may be  
presumed to have a "substantial interest " in the matter before the panel .335 We are 
aware that panels have on occasion granted additional third party rights in certain 
circumstances, which could, for instance, include situ ations where the measures at 
issue result in significant economic benefits for certain third parties336; situations 
where third parties maintain measures similar to the measures at issue337, or where 
practical considerations aris e from a third party's involvem ent as a party in a parallel 
panel proceeding.338 As we explain below, we are not persuaded that the 
circumstances of the request before us would warrant the granting of enhanced third 
party rights . 
The requesting third parties argue that the present dispute s raise important questions 
about the extent of regulation of agricultural imports permissible under WTO rules, 
including Articles  III and XI of the GATT  1994 and Article 4.2 of the Agreement on 
Agriculture, which are of particular significance to the requ esting Members who are all 
major agricultural exporters. As pointed out by the United States, numerous  WTO 
Members export agricultural products and therefore  have "a collective interest in the 
interpretation of covered agreements ".339 We also concur with the  United States' 
assessment that the requesting third parties  "have provided no basis for an assertion 
that this dispute differs from any other dispute in which other Members may have 
systemic interests ".340  
                                                
329 Joint letter from the requesting third parties dated 2 December  2015.  
330 Letter from the United States dated 11 December 2015, para. 13.  
331 Letter from Indonesia dated 14 December 2015.  
332 Letter from  New Zealand dated 11 December 2015, para.  2. 
333 The Appellate Body has clarified that, beyond the minimum rights guaranteed under Article  10 and 
Appendix 3 to the DSU, panels "enjoy a discretion to grant additional participatory rights to third parties in 
particular cases, as long as such 'enhanced ' rights are consistent with the provisions of the DSU and the 
principles of due process. " Appellate Body Report, US – FSC (Article 21.5 – EC), para. 243. See also  Appellate 
Body Report s, EC – Hormones  (Canada) , para. 154; US – 1916 Act , para.  150; Panel Report, EC – Export 
Subsidies on Sugar , para.  2.3. 
334 Panel Report, EC– Bananas III (Guatemala and Honduras) , para.  7.9. See also , Panel Report s, EC – 
Tariff Preferences , Annex A, para.  7(d); EC –Export Subsidies on  Sugar (Australia, Brazil and Thailand) , 
para. 2.7; EC and certain member States – Large Civil Aircraft , para.  7.166.  
335 Panel Report, EC and certain member States – Large Civil Aircraft , para.  7.166.  
336 Panel Reports, EC – Bananas  III (Guatemala and Hondura s), para. 7.8; EC – Tariff Preferences , 
Annex A, para.  7(a). See also, Panel Report, EC – Export Subsidies on Sugar , para. 2.5.  
337 Panel Report, EC – Tariff Preferences , Annex A, para. 7(b). 
338 Panel Report, EC – Hormones (Canada) , para. 8.17. 
339 Letter from the United States dated 11 December 2015, para. 6.  
340 Letter from the United States dated 11 December 2015, para. 7. WT/DS477/R • WT/DS478/R  
 
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  The requesting third parties also argue that the p resent disputes involve measures of 
particular trade and economic significance to the requesting Members as major 
exporters of agricultural products. Furthermore, they contend that the outcome of 
these disputes will have significant implications for broade r agricultural trade between 
Indonesia and the requesting Members because Indonesia maintains similar measures 
on the importation of a wide range of agricultural products other than the products at 
issue in the present disputes. In the absence of further d etails in this respect, we are 
unable to see how such interests differ from the collective interests of other exporting 
Members.  
We also note their argument that these disputes will consider measures that are "very 
similar "341 to some of those at issue in Indonesia – Measures Concerning the 
Importation of Chicken Meat and Chicken Products (WT/DS484), in which Brazil is the 
complainant and Australia, Canada, and the European Union are likely to be third 
parties.  As we understand it, DS484 deals with Indonesia 's import licensing regime for 
chicken meat and chicken products, and appears to focus on claims under the SPS and 
the TBT Agreements. This is not the case for the matters before us. Although there 
appears to be some overlap with measures in DS484, we do n ot consider that the 
disputes before us are sufficiently similar to DS484 to warrant according enhanced 
third party rights to potential third parties in that dispute.  
Finally, we note that prior panels have consistently denied requests for enhanced 
third-party rights where the parties were unanimously opposed to it.342 We therefore 
consider it appropriate to give due regard to the parties' shared view in DS478 that 
the Panel should decline the third parties' request for enhanced third -party rights. 
Having so  decided and considering the close association between DS478 and DS477 
and the fact that the disputes have been joined under Article 9.1 of the DSU, we 
would find it difficult to decide differently with respect to DS477.  
We therefore decline Australia, Br azil, Canada and the European Union 's joint request 
for enhanced third party rights in these proceedings.  
7.1.2   Request for a preliminary ruling  
7.2.  On 11 December 2015,  Indonesia submitted to the Panel a request for a preliminary ruling 
concerning the consistency  of New Zealand's and the United  States ' panel requests and first 
written submissions with the requirements of the DSU.343 On 27 January 2016, the Panel 
communicated its conclusions on Indonesia's request and , on 5 July  2016, the Panel issued its 
preliminary r uling to the parties with copy to the third parties. The Panel's  preliminary ruling of 5 
July 2016 is an integral part of this panel  Report  and is included in Annex A -1. 
7.1.3   Whether certain challenged measures are the result of decisions of private actors  
7.1.3.1   Introduction  
7.3.  Before examin ing the various claims put forward by New Zealand and the United States and 
the defence advanced by Indonesia , the Panel wishes to clarify the scope of its terms of reference 
in these proceedings. In particular, whether, as Indonesia argued, certain measures pertaining to 
its import licensing regime for horticultural products, namely M easure s 1 (Limited application 
windows and validity periods ), 2 ( Periodic and fixed import terms ), 3 ( 80% realization  
requirement ) and 5 ( Storage ownersh ip and capacity requirements ); as well as similar measures 
relating to its regime for animals and animal products, i.e. Measures  11 (Limited application 
windows and validity periods), 12 (Periodic and fixed import terms) and 13 (80% realization 
requirement ), are "the result of decisions of private actors ".344  
7.4.  Indonesia has put forward this contention as part of its argumentation under Article  XI:1 of 
the GATT  1994 and Article  4.2 of the Agreement on Agriculture. In particular, Indonesia argued 
                                                
341 Joint letter from the requesting third parties dated 2 December  2015.  
342 Panel Reports, Dominican Republic – Safeguard Measures , para.  1.8; Argentina – Import Measures , 
para. 1 .24; and China – Rare Earths , para. 7.9.  
343 Indonesia 's request for a preliminary ruling, para.  1. 
344 Indonesia's first written submission, para. 52. See also , Indonesia's first written submission, 
paras.  78, 104, 119, 13 8, 141, 147, 163; Indonesia's second written submission, paras. 75, 177.  WT/DS477/R • WT/DS478/R  
 
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  that the chall enged measures are the result of private actions and not measures instituted or 
maintained by a Member within the meaning of these provisions. We note that the issue of 
whether the challenged measures constitute private actions runs to the core of our juri sdiction 
because only measures "taken by a Member " can be challenged under the DSU. We thus proceed 
to examine Indonesia's contention to ascertain whether Measures  1, 2, 3, 5, 11, 12 and 13 are 
measures subject to the DSU and therefore within our jurisdict ion. 
7.1.3.2   The relevant provision  
7.5.  Pursuant to Article 3.3 of the DSU , the dispute settlement system addresses "situations in 
which a Member considers that any benefits accruing to it directly or indirectly under the covered 
agreements are being impaired by measu res taken by another Member ".345 In US – Corrosion -
Resistant Steel Sunset Review , the Appellate Body considered that this phrase "identifies the 
relevant nexus, for purposes of dispute settlement proceedings, between the 'measure' and a 
'Member' ".346 The Appel late Body further confirmed that, "[i]n principle, any act or omission 
attributable to a WTO Member can be a measure of that Member for purposes of dispute 
settlement proceedings " and that "[t]he acts or omissions that are so attributable are, in the usual  
case, the acts or omissions of the organs of the state, including those of the executive branch. "347 
This does not however  exclude that the acts or omissions of regional or local governments, or even 
the actions of private entities, could be attributed to a  Member in particular circumstances.348  
7.6.  It is clear that the concept of "measure " subject to WTO dispute settlement is broad . 
However, regardless of the type of measure challenged , it must meet the requirement of 
attribution to a Member  in order to be subje ct to WTO dispute settlement .349 Nonetheless, t his 
does not exclude from scrutiny under the DSU those decisions of private actors that are not 
independent of a measure of a Member.350 As the Appellate  Body in Korea – Various Measures on 
Beef explained "the int ervention of some element of private choice does not relieve [a Member] of 
responsibility under the GATT 1994 ".351 The Appellate Body in US – COOL  further explained:  
[W]hile  detrimental effects caused solely  by the decisions of private actors cannot 
support  a finding of inconsistency  […], the fact that private actors are free to make 
various decisions in order to comply with a measure does not preclude a finding of 
inconsistency.  Rather, where private actors are induced or encouraged to take certain 
decisio ns because of the incentives created by a measure , those decisions are not 
"independent " of that measure.352  
7.7.  With that in mind, we proceed to examine whether, as alleged by Indonesia, Measures 1, 2, 
3, 5, 11, 12 and 13 are the result of independent decision s of private actors or, rather, are actions 
"taken by " Indonesia. We note that the parties have offered similar arguments in respect of those 
measures embodying analogous features, albeit they relate to different import licensing regimes 
(horticultural pro ducts, and animals and animal products). Given the similar nature of the 
measures, it is not necessary to examine them individually to determine whether or not they are 
measures "taken by " Indonesia. Hence, we examine them jointly below.  
7.1.3.3   Measures 1 and 11 (Limited application windows and validity periods ) 
7.8.  With respect to Measures  1 and 11, Indonesia argued that the limited application windows 
and validity periods do not cut off imports at the beginning or end of the validity period and that 
                                                
345 Emphasis added.  
346 Appellate Body Report, US – Corrosion -Resistant Steel Sunset Review , para. 81.  See also , Appellate 
Body Report, Argentina – Import Measures , para. 5.100.  
347 Appella te Body Report, US – Corrosion –Resistant Steel Sunset Review , para. 81. (fns omitted)  
348 Appellate Body Report, Argentina – Import Measures , para. 5.100.  
349 Appellate Body Report, Argentina – Import Measures , para. 5.100 et seq.  
350 In Korea – Various Measure s on Beef, the measure at issue required retailers to make a choice as to 
what to sell. The Panel found that "a government regulation contravenes a Member 's obligations if it forces 
economic operators to make certain choices " (Panel Report, Korea – Various  Measures on Beef , para.  635).This 
decision was upheld by the Appellate Body  (Appellate Body Report, Korea – Various Measures on Beef , 
para.146 ). In Japan – Film, the panel found that "administrative  guidance that creates incentives or 
disincentives largel y dependent upon governmental action for private parties to act in a particular manner" 
may constitute a governmental measure.  Panel Report , Japan – Film, para. 10.45 (quoting, GATT Report, 
Japan  – Semi-conductors , para. 109).  
351 Appellate Body Report, Korea – Various Measures on Beef , para. 146 . 
352 Appellate Body Report, US – COOL , para. 291.  (emphasis original)  WT/DS477/R • WT/DS478/R  
 
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  importers decide  of their own accord not to ship their products after a certain date .353 New Zealand 
respond ed that it is Indonesia's regulations that limit imports and constrain the private decisions of 
importers through the limited application windows and validity periods , which are  clearly set out in 
those  regulations.354 Likewise, t he United States submitted  that Indonesia' assertion that any 
limitation is self -imposed by private actors is incorrect because Indonesia's  import licensing regime 
forces importers to halt shipm ents four to six weeks before the end of the validity period.355  
7.9.  As described in Section  2.3.2.1 above , Measures 1 and 11 consist of the combination of 
limited application windows and validity periods as regul ated by Article  13 of 
Regulation  MOA 86/2013  Article s 13A,14, 21, 22 and 30356 of MOT 16/2013 , as amended ; and 
Article 29 of MOA 139/2014 , as amended by MOA  2/2015, and Article s 12 and 15  of MOT 46/2013 , 
as amended , respectively. These regulations stipulate the periods during which importers may 
request the necessary authorisations to import horticultural and animal and animal products into 
Indonesia, as well as the periods of validity of those authorisations once granted. Accordingly, 
importers wishing to im port into Indonesia must apply for the necessary authori zations during the 
periods stipulated by the regulations encompassing Measures  1 and 11. Likewise, once they have 
obtained the necessary authori zations, importers can only import the authori zed produc ts during 
the validity period that has been granted according to those same regulations.  
7.10.   We observe that the co -complainants are challenging Measures  1 and 11 because, by 
structuring the various periods in a certain manner, these measures allegedly have a  limiting effect 
on import ation.357 In our view, the co -complainants are not challenging the results of the decisions 
of private actors; rather, they are challenging the Measures that impose the various deadlines that 
importers must respect in order to be ab le to import into Indonesia.  
7.11.   We agree with New Zealand that the fact that private actors are able to make decisions 
about their import needs does not immuni ze Indonesia's measures from challenge.358 As we have 
explained above, the intervention of some elemen t of private choice does not necessarily relieve a 
Member of responsibility under the covered agreements.359 We recall the Appellate Body's 
explanation that "where private actors are induced or encouraged to take certain decisions 
because of the incentives c reated by a measure, those decisions are not 'independent' of that 
measure ".360 We do not however think that this is the case  with respect to Measures  1 and  11 
because the co -complainants are challenging the limited application windows and validity periods 
as set out in Indonesia's regulations. They are not challenging the results of decisions taken by 
importers.  
7.12.   We thus conclude that Measures  1 and 11 ( limited application windows  and validity period s) 
as set out in the relevant regulations are measures "taken by" Indonesia and thus subject to the 
DSU and therefore within our jurisdiction . 
7.1.3.4   Measure s 2 and 12 ( Periodic and fixed import terms ) 
7.13.   With respect to Measures  2 and 12 , Indonesia argued  that because the terms are selected 
by importers and they are free to  alter their terms of importation from one period to the other, 
any restriction is self -imposed and these terms do not constitute "measures instituted or 
                                                
353 Indonesia's second written submission, paras. 67 -69, 134.  
354 New Zealand's second written submission, para. 50.  
355 United States' response to Panel question No. 12, United States' second written submission, 
paras.  75-76. 
356 Article 30 of MOT 16/2013, as amended, relevantly provides:  
(2) If a fresh Horticultural Product import: (a) is not the Horticultural Product included in the 
Recognition of the PI -Horticultural Products and/or the Import Approval; ... it will be destroyed in 
accordance with regulatory legislation.  
(3) If a processed Horticultural Product import: (a) is not the Horticultural Product included in the 
Recognition of the PI -Horticultural Products and/or the Import Approval; ... it will be destroyed in 
accordance with regulatory legislation.  
(4) The cost of destroying and re -exporting a Horticultural Product, as described in paragraph (2) and 
paragraph (3), is the responsibility of the impo rter. Exhibit JE -10. 
357 New Zealand 's first written submission, para. 211; United States ' first written submission, para. 155 ; 
New Zealand 's first written submission, para. 154. United States ' first written submission, paras.  264-265. 
358 New Zealand's respon se to Panel Question no  12. 
359 See Appellate Body Report, Korea – Various Measures on Beef , para. 146.  
360 Appellate Body Report, US – COOL , para. 291.  WT/DS477/R • WT/DS478/R  
 
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  maintained by a Member " within the meaning of Article XI:1 of the GATT 1994.361 It further argued 
that the terms of import licences fall outside the scope of Article 4.2 of the Agreement on 
Agriculture because they are determined by private parties and not by Indonesia.362 New Zealand 
responded that the measures challenged in this dispute are not in fact comme rcial decisions of 
private actors, but r ather, those reflected in Indonesia's laws and regulations  which prevent 
importers from making ordinary commercial decisions and serve to limit imports.363 The United 
States clarified that the measures that the co-complainants are challenging are not the specific 
terms of any or each importer’s licen ce but, rather, the inability of importers, once an Import 
Approval validity period has begun, to import products of a different type, quantity, country of 
origin, or port o f entry than those sp ecified on their import permits.364 
7.14.   As described in Sections  2.3.2.2  and 2.3.3.3 above , Measures 2  and 1 2 consist of  periodic 
and fixed import t erms requirements implemented by means of Article 6 of MOA 86/2013 and 
Article 13 and 30 of MOT 16/2013, as amended; and Articles 30 and 33(a) -(b) and 39(e) of 
MOA 139/2014, as amended, and Article  30 of MOT  46/2013, as amended.  These regulations 
provide t hat the importation of horticultural products or animals and animal products must be 
done exclusively within the terms, such as the type and quantity of products, the ports of entry 
etc, of the relevant import authori zations (RIPHs/MOA Recommendations and Import Approvals) 
and that these terms cannot be changed during the validity period of those authori zations.  
7.15.   We observe that the co -complainants are challenging Measures  2 and 12 because they 
allegedly constitute restriction s having a limiting effect on i mport ation of horticultural products and 
animals and animal products imported into Indonesia and limit  the competitive opportunities of 
importers and imported products.365 Indonesia's contention, however, seems to rest upon the 
assumption that the co -complai nants take issue with the actual terms chosen by importers, which 
are in principle the result of private choices by importers. To us, Indonesia's characteri zation of 
Measures 2 and 12 does not correspond to the measures challenged by the co -complainants. 
Indonesia appears to be confounding the actual terms chosen by individual importers with the 
challenged measures per se . The co -complainants are not challenging the actions taken by 
importers but rather Indonesia's own regulations imposing fixed terms on im porters.  
7.16.   While t he co -complainants do refer to the actions of importers in their argumentation that 
Measures  2 and  12 constitute quantitative restrictions, as explained in paragraph  7.11 above , 
decisions of private actors a re not independent of a measure when those decisions are the result 
of incentives created by the measure. We do not however think that this is the case with respect 
to Measures  2 and 12 because the co -complainants are explicitly challenging the regulations  
imposing periodic and fixed terms. They are not challenging the results of decisions taken by 
importers.  
7.17.   We thus c onclude that  Measures 2 and 12 (Periodic and fixed import terms)  as set out in the 
relevant regulations are measures "taken by " Indonesia and  thus subject to the DSU  and therefore 
within our jurisdiction.  
7.1.3.5   Measure s 3 and 13 : 80% realization  requirement  
7.18.   With respect to Measures  3 and 13, Indonesia argued that the 80%  realization requirement  
is not a restriction because it is a function of importe rs' own estimates and because it can be 
changed by the importer at will from one validity period to the next .366 New Zealand disagreed and 
submitted that Indonesia's argument is  incorrect because the realization  requirement is directly 
linked to the fixed te rms importers must list on their import approval application for the validity 
period.367 Likewise, the United States contended that the realization  requirement is not a function 
                                                
361 Indonesia's first written submission, para. 138; Indonesia's second written submission, paras. 167 -
168. 
362 Indonesia's first written submission, paras.  74 and 104.  
363 New Zealand's response to Panel Questions nos. 12 and 58. See also  New Zealand's second written 
submission, paras. 73 and 196.  
364 United States' responses to Panel Question nos.  12 and 58; See also  United States' second written 
submission, paras. 78 -80. 
365 New Zealand's first written submission, para. 90; New Zealand's second written submission, 
para. 196; United States' first written submission, paras. 52 and 160. New Zealand's first written submiss ion, 
paras. 157 and 163; United States' first written submission, para. 274.  
366 Indonesia 's first written submission, para. 107.  
367 New Zealand's second written submission, paras. 86 -88 and para. 91; see also  New Zealand's 
response to Panel question No. 12.  WT/DS477/R • WT/DS478/R  
 
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  of importers ' own estimate because the realization  requirement itself forces imp orters to reduce 
their import volumes to ensure they meet the 80% threshold.368 
7.19.   As described in Sections  2.3.2.3  and 2.3.3.4 above , Measures 3 and 13 consist of the 80% 
requirements implemented thr ough Articles  14A, 24, 25A and  26 and 27A of MOT 16/2013, as 
amended; and Articles 13, 25, 26 and 27 of MOT  46/2013, as amended.  Pursuant to these 
regulations, RIs are required to import at least 80% of the quantity specified for each type of 
horticultural  product listed on their Import Approval for a given period of time.  
7.20.   We observe that the co -complainants are challenging Measures  3 and 13 because they 
constitute restriction s allegedly  having a limiting effect on  import ation of horticultural products  and 
animals and animal products into Indonesia. In particular, the co -complainants are arguing that 
both Measures  compel importers to limit their imports, by inducing them to reduce the amounts 
they request in their Import Approvals.  We thus understand that, f or the co -complainants, the 
limiting effect of Measures  3 and 13 derive s from the fact that they encourage  or induce  importers 
to limit their volume of imports.  Indonesia however argued that these Measures are a  function of 
importers' own estimates. We rec all that "where private actors are induced or encouraged to take 
certain decisions because of the incentives created by a measure , those decisions are not 
'independent' of that measure ".369 Accordingly, if the co -complainants prove that the importers 
actions  are induced or encouraged by Measures  3 and 13, we will consider that those actions are 
not independent from the Measures  themselves . This does not detract from the fact that 
Measures  3 and 13, as defined by the co -complainants and stipulated in the above -mentioned 
regulations, are measures taken by Indonesia.  
7.21.   We thus conclude that the 80% realization requirements as set out in the relevant 
regulations are measures "taken by " Indonesia, and thus subject to the DSU  and therefore within 
our jurisdiction.  
7.1.3.6   Measure 5: Storage ownership and capacity requirements  
7.22.   Concerning Measure  5, Indonesia argued  that a ny limitations placed on an importer' s abil ity 
to import  caused by the storage capacity requirem ent for horticultural products are  self-
imposed.370 New Zealand r esponded that the storage ownership and capacity requirement dictates 
the quantity of product that may be imported. New Zealand argued that these restrictions are not 
the result of decisions by private actors; rather, Indonesia's import licensing regime dr ives the 
decision of importers and its laws and regulation s frame the way in which importers take 
decisions.371. The United States submitted that importers do not choose  to limit the products they 
import to a fraction of what they could bring in under normal  market conditions. For the United 
States, their decision to self -restrict the quantity of imported products is a compelled response 
based on the requirements of Indonesia’s storage capacity measure.372  
7.23.   As described in Section 2.3.2.5 above , Measure  5 consists of the s torage ownership and 
capacity requirements  regulated through Article 8 (1)(e) of MOT 16/2013 , as amended, and by 
Article  8(2)(c)  and (d)  of MOA 86/2013, as amended. Pursuant to these regulations, importers 
must ow n their storage facilities with sufficient capacity to hold the full quantity requested on their 
Import Application. We observe that the co -complainants are challenging Measure  5 because it 
allegedly  constitutes a restriction having a limiting effect on im portation of horticultural imports 
into Indonesia and limits the competitive opportunities of importers and imported products. With 
respect to the storage capacity requirement, Indonesia argued that any limitations  placed on an 
importer' s abil ity to import  caused by this  requirem ent are  self-imposed .  
7.24.   We note that the obligation to own storage facilities and that these are large enough to 
accommodate the full quantity requested on importers' Import Applications is provided for in the 
above regulations. Whet her an importer decides to own a larger or smaller storage facility is a 
private decision which may be considered to result from the requirements imposed by Measure  5. 
We recall that "where private actors are induced or encouraged to take certain decisions  because 
of the incentives created by a measure,  those decisions are not 'independent' of that measure ".373 
                                                
368 The United States' response to Panel question No.  12; second written submission, paras. 81 -82. 
369 Appellate Body Report, US – COOL , para. 291  
370 Indonesia's first written submission, para.  86. 
371 New Zealand's response to Panel question No. 12.  
372 United Sta tes' second written submission, para.  86. 
373 Appellate Body Report, US – COOL , para. 291. (emphasis original)  WT/DS477/R • WT/DS478/R  
 
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  Accordingly, if the co -complainants prove that the importers actions are induced or encouraged by 
Measure  5 and that their decisions are relevant for the purpose of our analysis , we will consider 
that those actions are not independent from the Measure itself. This does not detract from the fact 
that Measure  5, as defined by the co -complainants and stipulated in the above -mentioned 
regulations, is a meas ure taken by Indonesia.  
7.25.   We thus conclude that the storage ownership and capacity requirements as set out in the 
relevant regulations are measures "taken  by" Indonesia, and thus subject to the DSU  and 
therefore within our jurisdiction.  
7.1.3.7   Conclusion  
7.26.   We therefo re conclude that Measures  1, 2, 3, 5, 11, 12 and 13 are measures taken by 
Indonesia and not the result of independent decisions of private actors. Accordingly, Measures  1, 
2, 3, 5, 11, 12 and 13 are measures subject to the DSU and therefore within our juri sdiction.  
7.1.4   Order of analysis  
7.27.   New Zealand and the United States put forward in their panel requests claims under Articles 
XI:1 and III:4 of the GATT  1994, Article 4.2 of the Agreem ent on Agriculture and Articles  2.2(a) 
and 3.2 of the Import Licensing Agreeme nt. Indonesia raised defences under Articles  XX(a),(b) 
and (d) of the GATT  1994 with respect to the claims of violation under Articles XI:1 and III:4 of 
the GATT  1994 and Article  4.2 of the Agreement on Agriculture. Indonesia also invoked 
Article  XI:2(c)(i i) of the GATT  1994 as a defence with respect to some of the claims of violation of 
Article XI:1. We must decide in which order we will analyse these claims and defences.  
7.28.   We recall that panels have discretion i n deciding the order of their analysis of part ies' 
claims. The Appellate Body recognized this in Canada – Wheat Exports and Grain Imports when it 
stated that "[a]s a general principle, panels are free to structure the order of their analysis as they 
see fit. In so doing, panels may find it useful to t ake account of the manner in which a claim is 
presented to them by a complaining Member. "374 We observe that, while their panel requests were 
identical, the co -complainants have followed a different order of analysis in their written 
submissions.375 Nonetheles s, when asked by the Panel which order of analysis they thought we 
should follow, the co -complainants responded that the Panel should start its analysis with their 
claims pursuant to Article  XI:1 of the GATT 1994 because, in the context of considering 
quantitative restrictions, Article XI:1 is more specific than Article 4.2 of the Agreement on 
Agriculture; and because a finding of violation of Article  XI:1 without justification under Article  XX 
of the GATT  1994, would be determinative to resolving the dispu te.376 The co -complainants further 
proposed that we address Indonesia's defence under Article  XX of the GATT  1994 and then turn to 
                                                
374 Appellate Body Report, Canada – Wheat Exports and Grain Imports , para.  126. 
375 New Zealand structured  its first written submission according to th e provisions under which the 
challenge is being brought . It began with claims under Article XI:1 of the GATT 1994 with respect to all the 
measures at issue and then did the same for all claims under  Article  4.2 of the Agreement on Agriculture . 
Notably, in reverse order to that in its panel request,  New Zealand start ed with the individual elements of 
Indonesia 's import licensing  regime for animals and animal products  as well as the regime as a whole , followed 
by the  individual elements of the  regime for hort icultural products  and the regime as a whole. It then 
addressed the self-sufficiency  requirements. Finally, New Zealand proceeded with its claims  under Article III:4 
of the GATT 1994 and Article 3.2 of the Import Licensing Agreement . In its second written submission, New 
Zealand changed the approach, and although commencing its substantive analysis still with the measures 
pertaining to the import licensing regime for animals and animal products, it approached each measure under 
Article XI:1 of the GATT  1994, Article  4.2 of the Agreement on Agriculture, Article XX of the GATT  1994 and 
where relevant, Article III:4 of the GATT  1994 or Article 3.2 of the Import Licensing Agreement, before passing 
onto the next measure.  
The United States structure d its submissi ons differently. It began its first written submission with  
arguments on each of the elements of Indonesia 's import licensing  regime for horticultural products  separately 
as well as the regime as a whole, in light of its claims under Article XI:1 of the GA TT first and then Article 4.2 
of the Agreement on Agriculture. The same order is followed with respect to each of the individual elements of 
the import licensing regime for animals and animal products  separately and the regime as a whole . The United 
States  then proceeded with its challenge  of the self-sufficiency requirement  under Articles XI:1 of the GATT 
1994 and 4.2 of the Agreement on Agriculture,  and proceeded with its arguments regarding the limited 
application win dows and validity periods under  Article 3.2 of the Import Licensing Agreement . Its second 
written submission followed a similar approach, including a response to Indonesia's defence pursuant to 
Article  XX of the GATT  1994.  
376 New Zealand's responses to Panel questions Nos.  6 and 79. United Sta tes' responses to Panel 
questions Nos.  6 and 79.  WT/DS477/R • WT/DS478/R  
 
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  Article 4.2 of the Agr eement on Agriculture.377 The United States submitted that, if the Panel were 
to find that Indonesia’s meas ures are justified under Article XX of the GATT 1994, it would not 
need to examine those measures under Article  4.2.378 We also note that both co -complainants 
have argued that Article  XI:2(c)(ii) of the GATT  1994 is no longer available to Indonesia, as it ha s 
been superseded by the provisions of the Agreement on Agriculture.379  
7.29.   New Zealand proposed that we then turn to the additional  claims  which only concern some 
of the measures at issue . In this respect, New Zealand considered  that, in this dispute, it is 
appropriate for Article III:4 to be addressed after the claims under Article s XI:1 and 4.2, and the 
corresponding defences, have been determined.380 The co -complainants also suggested that the 
Panel considers the claims under Article 3.2 of the  Import Licensin g Agreement  last.381 The United 
States nonetheless pointed out that, if the Panel finds that the two relevant measures challenged 
under this provision are found to be inconsistent with the GATT 1994 and the Agreement on 
Agriculture , it would not be necessary  for the Panel to examine the claims under the Import 
Licensing Agreement.  
7.30.   Indonesia, at first, asked the Panel to commence its analysis with Article 4.2 of the 
Agreement on Agriculture on grounds that this provision has a broader scope than Article XI:1.382 
At the first substantive meeting, however, Indonesia indicated that the Panel could begin its 
analysis with Article XI:1  of the GATT  1994. In its second written submission, Indonesia stated 
that considerations of efficiency and judicial economy favour the  Panel beginning its analysis with 
Article 4.2 of the Agreement on Agriculture.383 It also argued that because the co-complainants 
have failed to provide evidence that the challenged measures are not justified under Article  XX, 
the "Panel cannot, as a matter  of law, rule in the complainants ' favor under Article  4.2".384  
7.31.   In deciding the order of our analysis, we concur with the panel i n India – Autos  in that it is 
important to consider first whether  a particular order is compelled by principles of valid 
interpr etative methodology, which, if not followed, might constitute an error of law.385 Provisions 
from three separate covered agreements are challenged in these disputes, namely the GATT  1994, 
the Agreement on Agriculture and the Import Licensing Agreement. I n EC – Bananas III , the 
Appellate Body articulated  the test that should be applied in order to decide the order of analysis 
where two or more provisions from different covered agreements appear  a priori  to apply to the 
measure in question . The Appellate Body i ndicated that the provision from the agreement that 
"deals specifically, and in detail " with the measures at issue should be analysed first.386 We also 
bear in mind that the order we choose may have an impact on the potential to apply judicial 
economy.387 
7.32.   We n ote that all 18 measures at issue have been challenged under Article XI:1 of the 
GATT  1994 and Article 4.2 of the Agreement on Agriculture. We also note that, as pointed out by 
the United States, the co -complainants have brought identical claims under both  provisions388; i.e. 
the allegation that all 18 measures constitute quantitative restrictions. We agree with the co-
complainants that the provision which deals specifically with quantitative restrictions is Article XI:1 
of the GATT 1994. Article 4.2 of the A greement on Agriculture, on the contrary, has a broader 
scope and refers to measures other than quantitative restrictions. We note that this was also the 
view expressed by Australia and Canada at the third -party session; while Brazil, the European 
Union, a nd Japan signalled that they were comfortable with the Panel commencing its analysis 
under Article  XI:1 of the GATT 1994.  
7.33.   We will thus commence our examination with Article XI:1 of the GATT 1994. We note that 
this is the approach followed in all previous disputes where the complainants brought claims under 
Article  XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture  and the respondent 
                                                
377 New Zealand's response to Panel question No.  80; United States' response to Panel question No.  80. 
378 United States' response to Panel question No.  80. 
379 New Zealand 's response to Panel question No. 114. United States' response to Panel question 
No. 114. 
380 New Zealand's response to Panel question No.  80. 
381 New Zealand's response to Panel question No.  80; United States' response to Panel question No.  80. 
382 Indonesia 's first written submission, para. 45 . 
383 Indonesia's second written submission, paras. 39 -41. 
384 Indonesia's second written submission, para.  38.  
385 Panel Report, India – Autos , para. 7.154.  
386 Appellate Body Report, EC – Bananas III , para.  204. 
387 Panel Report, India – Autos , para. 7.161.  
388 United St ates' response to Panel question No.  79. WT/DS477/R • WT/DS478/R  
 
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  invoked a defence under Article XX.389 Given that Article  XI:2(c)(ii)  of the GATT 1994 concerns 
measures tha t may be excluded from the scope of the obligations in Article XI:1 of GATT  1994, we 
will address it in the context of our analysis of the latter. If we find that all or some of the 
measures are inconsistent with Article XI:1 of GATT  1994, we will examine Indonesia's defence 
pursuant to Article XX  of the GATT 1994. We take this approach because if the measures were to 
be justified under this provision, we would not need to analyse the claims under Article 4.2 of the 
Agreement on Agriculture. Indeed, footnot e 1 to Article 4.2 of the Agreement on Agriculture  
excludes from the scope of this provision those "measures maintained  … under other general, non 
agriculture -specific provisions of GATT 1994 ". We consider that measures maintained under 
Article  XX of the G ATT 1994 are "measures maintained  … under other general, non agriculture -
specific provisions of GATT 1994 " and therefore outside the scope of Article 4.2 of the Agreement 
on Agriculture.  
7.34.   We note that, as indicated above, Indonesia argued that, because the co-complainants have 
failed to provide evidence that the challenged measures are not justified under Article  XX, the 
"Panel cannot, as a matter of law, rule in the complainants ' favor under Article  4.2".390 We 
understand Indonesia to be asking the Panel to i nvert the burden of proof under Article XX of the 
GATT  1994. As pointed out by New Zealand, it is well  established in WTO jurisprudence following 
the Appellate Body decision in US – Wool Shirts and Blouses391 that the burden of identifying and 
establishing a ffirmative defences under Article  XX rests on the party asserting the defence.392 Thus 
it is for Indonesia, and not the co -complainants, to establish the defence under Article XX of the 
GATT 1994 . 
7.35.   If the measures are not justified under Article XX, we will t hen proceed with the claims 
under Article 4.2 of the Agreement on Agriculture.  Next, we will proceed to examine the additional 
claims that only concern some of the measures at issue. We will commence by the claim under 
Article III:4 of the GATT 1994, which  has been made only with respect to three measures at issue. 
This will be followed by an analysis of the claims under the Import Licensing Agreement , which 
concern only two measures.  
7.36.   A final point to decide is the order of our analysis with respect to the  measures at issue; i.e. 
whether we should first address those measures pertaining to the import licensing regime for 
horticultural products or those measures pertaining to the regime for animals and animal products . 
In this respect, we note that the co -complainants agreed that there is no legal reason to start with 
one regime or the other; they did, however, suggest that we address each regime separately 
because, despite the similarity of some of the measures, each regime has its own specificities.393 
Taking  into account these comments, t he Panel has decide d to commence with the measures 
concerning the import licensing regime for horticultural products, to be followed by those for 
animals and animal products ; this is also  in line with the order chosen by the co-complainants in 
their panel requests.   
7.2  Claims pursuant to Article XI:1 of the GATT 1994  
7.2.1   Introduction  
7.37.   The co -complainants have challenged 18 separate measures under Article XI:1 of the 
GATT  1994. We will begin by examining the relevant legal provision and the applicable legal  
standard. Before applying this standard to our assessment of the consistency of each of the 
18 measures  at issue with this provision, we will examine some preliminary issues raised by the 
parties . 
7.2.2   The text of Article XI of the GATT 1 994 
7.38.   Article  XI of the GATT 1994 provides, in relevant part:  
General  Elimination of Quantitative Restrictions  
                                                
389 See Panel Reports, India – Quantitative Restrictions , paras. 5.112 -5.242; Korea – Various Measures 
on Beef , paras. 747 –769; EC – Seal Products , paras. 7.652 -7.665; US – Poultry (China) , paras. 7.484 -7.487. 
390 Indon esia's second written submission, para.  38.  
391 Appellate Body Report, US – Wool Shirts and Blouses , p. 16.  
392 New Zealand's response to Panel question No.  81.  
393 New Zealand's response to Panel question No.  7; United States' response to Panel question No.  7. WT/DS477/R • WT/DS478/R  
 
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  1. No prohibitions or restrictions other than duties, taxes or other charges, 
whether made effective through quotas, import or export licences or o ther measures, 
shall be instituted or maintained by any Member on the importation of any product of 
the territory of any other Member or on the exportation or sale for export of any 
product destined for the territory of any other Member.  
2. The provisions of paragraph 1 of this Article  shall not extend to the following:  
(a) … 
(c) Import restrictions on any agricultural or fisheries product, imported in 
any form,* necessary to the enforcement of governmental measures which 
operate:  
(i) … 
(ii) to remove a tem porary surplus of the like domestic product, or, if 
there is no substantial domestic production of the like product, of a 
domestic product for which the imported product can be directly 
substituted, by making the surplus available to certain groups of dome stic 
consumers free of charge or at prices below the current market level;…  
7.39.   By its terms, t his provision forbids Members to institute or maintain prohibitions and 
restrictions , be it through quotas, import or export licences , or other measures , on (i) the 
importation of any product of the territory of any other contracting party, or (ii) the exportation or 
sale for export of any product destined for the territory of any other contracting party . The 
provision explicitly excludes prohibitions or restrictions imposed through duties, taxes or other 
charges . The Appellate Body in Argentina – Import Measures  described Article  XI:1 of the 
GATT  1994 as "lay[ing] down a general obligation to eliminate quantitative restrictions " and 
prohibiting Members  from "institut[ ing] or maintain [ing] prohibitions or restrictions other than 
duties, taxes, or other charges, on the importation, exportation, or sale for export of any product 
destined for another Member. "394  
7.2.3   Legal standard under Article  XI:1 of the GATT  1994  
7.40.   Panels have  traditionally conducted their examination of alleged inconsistencies with 
Article  XI:1 of the GATT  1994 following a two -step analysis: they have examined first  (i) whether 
the complainant has demonstrated that the measure at issue is a measure of the type  covered by 
Article  XI:1, and if it has so demonstrated, then they have considered  (ii) whether the complainant 
has demonstrated that the measure at issue constitutes a prohibition or restriction on importation  
(or exportation) .395 As explained by the Appell ate Body, this analysis must be carried out  on a 
case-by-case basis, taking into account the import  (or export)  formality or requirement at issue 
and the relevant facts of the case.396 
7.2.3.1   Step 1: Whether the measure at issue falls within the scope of Article  XI:1 of the 
GATT  1994  
7.41.   The Panel is called upon as a first step to establish whether the co -complainants have 
demonstrated that Indonesia's measures constitute measures covered by Article  XI:1 of the 
GATT  1994. The text of Article XI:1 defines its scope in both a negative and a positive manner. It 
commences by excluding from its scope a number of measures, namely "duties, taxes or other 
charges ". Article XI:1 thus applies to "quotas, import or export licences " as well as  a residual 
category of "other measures ". The term "other measures " has traditionally been considered by 
prior panels as a "broad residual category ".397 Under this understanding, panels have found that 
the concept of a restriction on importation covers any measures that result in "any form of 
                                                
394 Appellate Body Report, Argentina – Import Measures , para. 5.216.  
395 See Panel Reports, Argentina – Import Measures , para. 6.244; India – Autos , para.  4.119 (referring 
to GATT  Panel Report, Japan – Semi–Conductors , para. 104). See also , Panel Report, India – Quantitative 
Restrictions , para. 5.142.  
396 Appellate Body Report, Argentina – Import Measures , para. 5.245.  
397 Panel Report, Argentina – Hides and Leather , para.  11.17. See also  Panel Report, Argentina – Import 
Measures , para. 6.246 (referring to GATT P anel Report, Japan – Semi-Conductors , para.  104 and Panel Report, 
Argentina – Hides and Leather , para.  11.17) . WT/DS477/R • WT/DS478/R  
 
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  limitation imposed on, or in relation to  importation ".398 The Appellate Body has confirmed that the 
expression "other measures " suggests that Article  XI:1 has a broad coverage. Nonetheless, the 
Appellate Body has emphasized that the scope of application of this provision is not unfettered 
because it excludes "duties, taxes and other charges " and "Article  XI:2 of the GATT  1994 further 
restricts the scope of application of Article  XI:1 by providing that the provisions of Article  XI:1 shall 
not extend to the areas l isted in Article XI:2 ".399 As we explain in Section  7.2.4.2 below , Indonesia 
relied upon Article XI:2(c)(ii) to exclude some of the measures at issue from the scope of Article 
XI:1 of the GATT  1994.   
7.42.   In order to determine whet her a measure falls within the scope of Article  XI:1 of the 
GATT  1994, the panel in Brazil – Retreaded Tyres  considered that a panel must examine the 
"nature " of the measure.400 In Argentina – Import Measures , the panel considered that what is 
relevant when examining a measure under Article  XI:1 of the GATT  1994 is whether a measure 
prohibits or restricts trade, rather than the means by which such prohibition or restriction is made 
effective.401 Interpreting the words  "made effective through " quotas, import or export licences or 
other measures , the Appellate Body in Argentina – Import Measures  explained that this suggests 
that the scope of Article  XI:1 covers measures through which a prohibition or restriction is 
produced or becomes operative .402  
7.2.3.2   Step 2: Whether the measure at issue constitutes a prohibition or restriction on 
importation withi n the scope of Article XI:1 of the GATT 1994  
7.2.3.2.1   Prohibition s and restriction s having a limiting effect  on importation  
7.43.   If the examination under the first step reveals that the me asures at issue fall under 
Article  XI of the GATT 1994, then t he Panel is called upon as a second step to establish whether 
the co -complainants have demonstrated that Indonesia's measures constitute "prohibitions " or 
"restrictions " on importation within th e scope of Article XI:1 of the GATT 1994. In this respect , the 
Appellate Body has defined the term "prohibition " as a "legal ban on the trade or importation of a 
specified commodity " and the term "restriction " as "[a] thing which restricts someone or 
somet hing, a limitation on action, a limiting condition or regulation " and thus, generally, as 
something that has a limiting effect.403 As to whether a restriction is "on the importation ", the 
panel in  India – Autos  indicated that  "[i]n the context of Article  XI:1 [of the GATT  1994], the 
                                                
398 Panel Report, Colombia – Ports of Entry , para. 7.227 (referring to Panel Report, India – Autos , paras. 
7.254 –7.263 and 7.265; Panel Report, Brazil – Retreaded Tyres , para.  7.371).  (emphasis original)  
399 Appellate Body Report, Argentina – Import Measures , para. 5.219. (footnotes omitted)  
400 Panel Report, Brazil – Retreaded Tyres, para. 7.372.  
401 The panel reasoned as follows:  
The expression "whether made effective through quotas, import or export licences or other 
measures " used in Article  XI:1 of the GATT  1994 implies that the provision covers all measures 
that constitute import "prohibitions or restrictions " regardless of the means by which they are  
made effective. The reference to "quotas, import or export licences " is only indicative of some 
means by which import prohibitions or restrictions may be made effective. This does not imply 
that the scope of Article  XI:1 of the GATT  1994 is limited to pro hibitions or restrictions that are 
made effective through quotas or import or export licences. What is relevant when examining a 
measure under Article  XI:1 of the GATT  1994 is whether a measure prohibits or restricts trade, 
rather than the means by which s uch prohibition or restriction is made  effective . In light of this 
reasoning, the Panel will commence by examining the claims raised by the complainants under 
Article  XI:1 of the GATT  1994 irrespective  of whether this measure constitutes an import licence.  
Panel Report, Argentina – Import Measures , para. 6.363.  
402 The Appellate Body reasoned as follows:  
Article  XI:1 of the GATT  1994 prohibits prohibitions or restrictions other than duties, taxes, or 
other charges "made effective through quotas, import or exp ort licences or other measures ". The 
Appellate Body has described the word "effective ", when relating to a legal instrument, as "in 
operation at a given time ". We note that the definition of the term "effective " also includes 
something "[t]hat is concerned  in the production of an event or condition ". Moreover, the 
Appellate  Body has described the words "made effective ", when used in connection with 
governmental measures, as something that may refer to a measure being "operative ", "in force ", 
or as having "come into effect ". In Article  XI:1, the expression "made effective through " 
precedes the terms "quotas, import or export licences or other measures ". This suggests to us 
that the scope of Article  XI:1 covers measures through which a prohibition or restricti on is 
produced or becomes operative.  
Appellate Body Report, Argentina – Import Measures , para. 5.218 (referring to the Appellate Body 
Reports, China – Raw Materials , para.  356; US – Gasoline , p. 20, DSR 1996:I, p. 19). (footnotes omitted)  
403 Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to the Appellate Body 
Reports, China – Raw Materials , para.  319). WT/DS477/R • WT/DS478/R  
 
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  expression 'restriction … on importation' may … be appropriately read as meaning a restriction 
'with regard to' or 'in connection with' the importation of the product ".404  
7.44.   Finding support in the title of Article XI "General  Elimina tion of Quantitative Restrictions ", 
the Appellate Body in Argentina – Import Measures explained that the use of the word 
"quantitative " suggests that only those prohibitions and restrictions that limit the quantity or 
amount of a product being imported (or  exported) would fall within the scope of this provision:  
The use of the word "quantitative " in the title of Article  XI of the GATT 1994 informs 
the interpretation of the words "restriction " and "prohibition " in Article  XI:1, 
suggesting that the coverage o f Article XI includes those prohibitions and restrictions 
that limit the quantity or amount of a product being imported or exported.405 This 
provision, however, does not cover simply any restriction or prohibition. Rather, 
Article  XI:1 refers to prohibitions  or restrictions "on the importation … or on the 
exportation or sale for export ". Thus, in our view, not every condition or burden 
placed on importation or exportation will be inconsistent with Article  XI, but only those 
that are limiting, that is, those t hat limit the importation or exportation of products.406 
Moreover, this limitation need not be demonstrated by quantifying the effects of the 
measure at issue; rather, such limiting effects can be demonstrated through the 
design, architecture, and revealing structure of the measure at issue considered in its 
relevant context.407 
7.45.   Hence, only those prohibitions or restrictions that have a limiting effect on importation (or 
exportation) are covered by Article XI:1 of the GATT  1994. Prior panels have also similarly  
interpreted the concept of "restrictions " and have concluded that Article  XI:1 is applicable to 
conditions which are "limiting " or have a "limiting effect ".408 As to how to ascertain the limiting 
effects of a measure, the Appellate Body in Argentina – Impor t Measures  has explained that this 
can be done through an analysis of its design, architecture, and revealing structure, in its relevant 
context.409  
7.46.   When examining whether measures ha ve a limiting effect on importation, some panels have 
focused on whether t hose measures limited the competitive opportunities available to imported 
products. Panels have thus given relevance to factors such as the existence of uncertainties 
affecting importation, whether the measures affect investment plans, restrict market acce ss for 
imports or make importation prohibitively costly or unpredictable, whether they constitute 
disincentives affecting importations, or whether there is unfettered or undefined discretion to 
                                                
404 Panel Report, India – Autos , para.  7.257. See also , Panel Report, Argentina – Import Measures , para. 
6.458.  
405 (original footnote ) Appellate Body Reports, China – Raw Materials , para.  320. 
406 (original footnote ) We note that our understanding of Article  XI:1 of the GATT  1994 is supported by 
two provisions of the Import Licensing Agreement that suggest that certain import licensing pr ocedures may 
result in some burden without themselves having trade -restrictive effects on imports. Footnote  4 of the Import 
Licensing Agreement provides that "import licensing procedures requiring a security which have no restrictive 
effects on imports are  to be considered as falling within the scope of [Article  2]", which deals with automatic 
import licensing. In addition, Article  3.2 of the Import Licensing Agreement provides that, while "[n]on -
automatic licensing shall not have trade -restrictive … effect s on imports additional to those caused by the 
imposition of the restriction ", such procedures "shall be no more administratively burdensome than absolutely 
necessary to administer the measure. " 
407 Appellate Body Report, Argentina – Import Measures , para. 5 .217 (referring to the Appellate Body 
Reports, China – Raw Materials , para.  319-320).  
408 The panel i n India – Quantitative Restrictions  noted that the ordinary meaning of the term 
"restriction " is "a limitation on action, a limiting condition or regulation " (Panel Report, India – Quantitative 
Restrictions , para.  5.128 ). In India – Autos , the panel endorsed the interpretation of the term "restriction " 
used by the panel in India – Quantitative Restrictions  and concluded that "any form of limitation imposed on,  
or in relation to importation constitutes a restriction on importation within the meaning of Article  XI:1" (Panel 
Report, India – Autos , para.  7.265. (Emphasis original ). This panel also asserted that the expression "limiting 
condition " used by the panel in India – Quantitative Restrictions  "suggests the need to identify not merely a 
condition placed on importation, but a condition that is limiting, i.e. that has a limiting effect. In the context of 
Article  XI, that limiting effect must be on importation i tself" (Panel Report, India – Autos , para.  7.270). The 
Panels in Brazil – Retreaded Tyres,  Dominican Republic – Import and Sale of Cigarettes , and Colombia – Ports 
of Entry  cited, with approval,  key passages from India – Quantitative Restrictions  and India – Autos  which 
delineated this standard (Panel Report, Brazil – Retreaded Tyres , para.  7.371; Panel Report, Dominican 
Republic – Import and Sale of Cigarettes , paras. 7.252 and 7.258; Panel Report, Colombia – Ports of Entry, 
paras. 7.233 -7.235).  
409 Appellat e Body Report, Argentina – Import Measures , para. 5.217 (referring to the Appellate Body 
Reports, China – Raw Materials , para s. 319-320).  WT/DS477/R • WT/DS478/R  
 
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  reject a licence application.410 In particular, t he panel in Argentina – Import Measures  found that 
some of Argentina's measures created "uncertainty as to an applicant's ability to import, d[id] not 
allow companies to import as much as they desire[d] or need[ed], but condition[ed] imports to 
their export performance a nd impose[d] a significant burden on importers that [was] unrelated to 
their normal importing activity ".411 In reference to t he panel report in  Dominican Republic – Import 
and Sale of Cigarettes , the panel in Argentina – Import Measures  noted that "not every  measure 
affecting the opportunities for entering the market would be covered by Article  XI [of the 
GATT  1994], but only those measures that constitute a prohibition or restriction on the importation 
of products, i.e. those measures which affect the opport unities for importation itself ".412 
7.2.3.2.2   Whether an adverse trade effect test is necessary for a determination under 
Article  XI:1 
7.47.   We recall that the Appellate Body in Argentina – Import Measures  acknowledged that the 
limitation on imports "need not be demonstrate d by quantifying the effects of the measure at 
issue".413 The Appellate Body explained that "such limiting effects can be demonstrated through 
the design, architecture, and revealing structure of the measure at issue considered in its relevant 
context ".414 The exact meaning of this finding  has been the source of disagreement  among the 
parties.   
7.48.   Indonesia argu ed that there is no breach of Article  XI:1 of the GATT  1994 with respect to 
the measures at issue in this dispute because there is no adverse impact on tra de flows415 and 
that, for a measure to constitute a "quantitative restriction ", it must impose an "absolute limit " on 
imports.416 For Indonesia, just because Article XI:1 does not require precise quantification of the 
trade effects of a challenged measure does  not mean a complainant is excused from 
demonstrating that the measure has some effect on trade.417 In Indonesia's view , in order to 
demonstrate a violation of Article XI:1 of the GATT 1994, a complainant must show through clear 
and convincing evidence that the measure at issue has a "limiting effect on importation "418, and it 
is not enough that the measure merely affects  imports. In Indonesia's view, it is no excuse that 
complainants need not quantify the precise effect of the measure ; complainants must demons trate 
that a measure has a limiting effect on the quantity or amount of imports .419  
7.49.   The co -complainants disagreed and stressed that,  although the y have demonstrated the 
severe trade impact of Indonesia's regime, the above finding  of the Appellate Body indic ates that 
an adverse impact on trade flows is not a necessary component of the legal test for a quantitative 
                                                
410 For instance, in Argentina – Hides and Leather , the panel stated that "Article  XI:1, like Articles I, II 
and III of the GATT  1994, protects competitive opportunities of imported products not trade flows " (Panel 
Report, Argentina – Hides and Leather , para.  11.20). The panel in Brazil – Retreaded Tyres  found a violation of 
Article  XI:1 where fines did not impose a per se  restriction on importation, but acted as an absolute 
disincentive to importation by penalizing it and making it "prohibitively costly " (Panel Report, Brazil – 
Retreaded Tyres , para.  7.370).  The panel in Colombia – Ports of Entry , in reference to previous c ases dealing 
with Article  XI:1 of the GATT  1994, stated that this provision was applicable to "measures which create 
uncertainties and affect investment plans, restrict market access for imports or make importation prohibitively 
costly, all of which have i mplications on the competitive situation of an importer (Panel Report, Colombia – 
Ports of Entry , para. 7.240 (referring to GATT Panel Report, EEC – Minimum Import Prices ; GATT Panel Report, 
Canada – Provincial Liquor Boards (EEC) ; Panel Report, Argentina – Hides and Leather; Panel Report, Brazil – 
Retreaded Tyres )). In China – Raw Materials , although dealing with restrictions on exportation and in a finding 
declared moot by the Appellate Body due to terms of reference concerns (Appellate Body Reports, China – Raw 
Materials , paras. 234 -235), the panel examined a licence system and found that "a licence requirement that 
results in a restriction additional to that inherent in a permissible measure would be inconsistent with GATT 
Article  XI:1. Such restriction may arise in cases where licensing agencies have unfettered or undefined 
discretion to reject a licence application ". Panel Report s, China – Raw Materials , para.  7.957 . 
411 Panel Report, Argentina – Import Measures , para. 6.479 (finding upheld by the Appella te Body 
Report, Argentina – Import Measures , para. 5.288).  
412 Panel Report, in Argentina – Import Measures , para. 6.458  (referring to the Panel Report,  Dominican 
Republic – Import and Sale of Cigarettes , para.  7.261).  
413 Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to the Appellate Body 
Reports, China – Raw Materials , para s. 319-320).  
414 Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to the Appellate Body 
Reports, China – Raw Materials , para s. 319-320).  
415 See, for instance, Indonesia 's first written submission, paras. 55, 78, 80, 84, 93, 141 and 161.  
416 Indonesia 's first written submission, paras. 54, 55, and 110.  
417 Indonesia 's second written submission, para. 24.  
418 Indonesia 's second written submission, para. 23 (referring to Panel Report, India – Quantitative 
Restrictions , para. 7.270).  
419 Indonesia 's second written submission, para. 30.  WT/DS477/R • WT/DS478/R  
 
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  restriction.420 The United States recalled that t he co-complainants  can demonstrate a measure’s 
inconsistency with Article  XI:1 by showing that its d esign, structure, and operation, in themselves, 
impose limitations on importation (actual or potential).421 New Zealand further indicated that, 
while not an essential part of the legal test under Article  XI:1, the Panel may nonetheless use 
statistical data a s evidence to inform its overall examination of whether a measure has a limiting 
effect . New Zealand added that  this approach  was confirmed by the Appellate Body in Peru – 
Agricultural Products  where it  noted that "evidence on the observable effects of the  measure " can 
be considered but that a "panel is not required to focus its examination primarily on numerical or 
statistical data ".422 
7.50.   In our view, the wording of the Appellate Body Report in Argentina – Import Measures  is 
straightforward : the limiting effec t of the measures "need not be demonstrated by quantifying the 
effects of the measure at issue ".423 Hence, contrary to Indonesia's position, the co -complainants 
are not obliged to demonstrate the limiting effects of the measures at issue by quantifying their  
effects though trade flows. On the contrary, the co -complainants can demonstrate the limiting 
effects of the measures "through the design, architecture, and revealing structure of the measure 
at issue considered in its relevant context ".424 Nevertheless, while not required to do so,  the co -
complainants have presented data on trade flows425 that we will consider when examining each of 
the measures at issue . In this respect, we concur with New Zealand in that, while not an essential 
part of the legal test under Article XI:1 of the GATT 1994, the Panel may nonetheless use 
statistical data as evidence to inform its overall examination of whether a measure has a li miting 
effect. This was confirmed by the Appellate Body in Peru – Agricultural Products  where it  noted 
that "evidence on the observable effects of the measure " can be considered but that a "panel is 
not required to focus its examination primarily on numerical or statistical data ".426 
7.2.4   Preliminary issues  
7.51.   In this Section, we address Indonesia's contention that a ll or some of the measures at issue 
in this dispute are outside the scope of Article  XI:1 of the GATT  1994 because (i)  they are 
automatic import licensing regimes or (ii)  they are covered by Article  XI:2(c)(ii) of the GATT  1994.  
7.2.4.1   Whether the measures at iss ue are outside the scope of Article  XI:1 because 
they are automatic import licensing procedures  
7.52.   Indonesia argued that its import licensing regime for horticultural products, animals, and 
animal products is an automatic import licensing  regime expressly per mitted under Article  2.2(a) 
of the Import Licensing Agreement  and therefore, excluded from the scope of Article  XI:1 of GATT 
1994 (and Article 4.2 of the Agreement on Agriculture ).427 For Indonesia,  its import licensing 
regime for horticultural  products and  animals and animal products is automatic because 
applications for MOA Recommendations , RIPHs and Import Approvals have been granted in all 
cases when all legal requirements are fulfilled pursuant to Article 2(1) of the Import Licensing 
Agreement.428 
                                                
420 New Zealand 's second written submission, para. 5; United States ' first written submission, 
para. 143; United States ' second written submission, para. 9.  
421 United States ' second written submission, para. 11. United States ' response to Panel question 
No. 110. 
422 New Zealand 's second written submission, para. 8 (referring to Appellate Body Report, Peru – 
Agricultural Product s, para. 5.56 and fn. 362).  
423 United States ' response to Panel question No.  110, para. 95 (referring to Appellate Body Report, 
Argentina – Import Measures , para. 5.217, in turn referring to Appellate Body Reports, China – Raw Materials , 
paras. 319-320).  
424 Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to Appellate Body 
Reports, China – Raw Materials , para s. 319-320).  
425 See New Zealand 's response to Panel question No.  110, para. 61; United States ' response to Panel 
question No.  110, para. 97.  
426 New Zealand second written submission, para. 8 (referring to Appellate Body Report, Peru – 
Agricultural Products , para. 5.56 and fn. 362).  
427 Indonesia 's second written submission, para.  67. 
428 Indonesia 's second written submission, paras. 47 (referring to Indonesia 's first written submission, 
paras. 63 and 176; Indonesia 's opening statement during the first substantive meeting, para. 18; Indonesia 's 
responses to Panel 's Questions No.  8 and 52 , 50 and 51 ). WT/DS477/R • WT/DS478/R  
 
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  7.53.   The co -complainants disagree with Indonesia's contention.  In addition to arguing that not all 
of the measures at issue are import licensing procedures429, New Zealand submitted that the 
characteri zation of a measure as an "automatic " or "non-automatic " licensing regime is not 
relevant to the Panel's inquiry under Article XI:1 of the GATT 1994 (or Article 4.2 of the 
Agreement on Agriculture ).430 For New Zealand, t he recurring question before this Panel is whether 
the measures at issue constitute restriction s within the meaning of Article XI:1 (and Article 4.2 of 
the Agreement on Agriculture ).431 In its view , while some of these restrictions are made effective 
through import licences, the Import Licensing Agreement is not relevant to the Panel's analysis of 
these claims. Ac cording to New Zealand, it is important to distinguish between import licensing 
procedures, on the one hand, and underlying restrictions made effective through import licences, 
on the other.432 New Zealand contended that an analysis under Article XI:1 (and A rticle 4.2 of the  
Agreement on Agriculture ) cannot be conducted simply by assessing whether the licensing 
procedures used to implement the underlying restrictions are characteri zed as "automatic " or 
"non-automatic " because it would be a perverse result if measures that operated to limit imports 
were immune from challenge under Article XI:1 of the GATT 1994 (or Article 4.2 of the Agreement 
on Agriculture ) simply because they were made effective through automatic licensing 
procedures.433 
7.54.   The United States added  that Indonesia’s assertion that "automatic " import licensing 
procedures are outside the scope of Article XI:1 (and Article 4.2 of the Agreement on 
Agriculture )434 is refuted by the text of the provision.435 The United States argued that the  text of 
Article XI :1 of the GATT 1994  is explicit in that "import or export licences " can impose restrictions 
on importation within the meaning of Article XI:1 and consequently, a label such as "automatic " 
would not suffice to exclude, per se , Indonesia’s import regimes fro m the ambit of these 
provisions.436 The United States also contend ed that Indonesia’s import licensing regimes are not, 
in any event, "automatic ".437 
7.55.   We agree with the United States that there is nothing in the text of Article XI:1 of the 
GATT  1994 that sugges ts that import licensing regimes , automatic or non -automatic, are outside 
the scope of this provision . On the contrary, import licences are expressly included in the 
indicative list of measures covered by this provision : restrictions or prohibitions can be  "made 
                                                
429 New Zealand submitted  that with the exception of Measures 1 and 11, which it claimed are 
quantitative restriction s as well  as prohibited non –automatic licensing procedure s, all other measures at issue 
are not "administrative procedures used for the operation of import licensing regimes " under Article 1.1 of the 
Import Licensing Agreement, but rather, quantitative import restrictions inconsistent with Article XI:1 of the 
GATT 1994 and Article  4.2 of the Agreement on Agriculture. New Zealand 's opening statement at the second 
substantive meeting  of the Panel, paras. 11 -13 (referring to Panel Report, Korea – Various Measures on Beef , 
para. 784; Panel Report, EC – Poultry , para. 254; Appellate Body Report, EC – Bananas III , para. 197) . 
430 New Zealand 's opening statement at the second substantive mee ting of the Panel, para. 14.  
431 New Zealand 's opening statement at the second substantive meeting of the Panel, para. 15.  
432 For New Zealand, the distinction between import licensing procedures, on the one hand, and 
underlying restrictions made effective thr ough import licences, on the other has been articulated by the 
Appellate Body in EC – Bananas III  where it confirmed that the Import Licensing Agreement covers import 
licensing procedures and their administration, not underlying import restrictions. New Ze aland 's opening 
statement at the second substantive meeting of the Panel, paras. 11 -13 (referring to Panel Report, Korea – 
Various Measures on Beef , para. 784; Panel Report, EC – Poultry , para. 254; Appellate Body Report, EC – 
Bananas III , para. 197) . 
433 New Zealand 's opening statement at the second substantive meeting of the Panel, para. 14.  
434 The United States pointed out that Article 4.2 of the Agreement on Agriculture covers "any measures 
of the kind which have been required to be converted into ordinary  customs duties " with "ordinary customs 
duties " being the only measures that are excluded from Article 4.2 are. The United States submits that t he 
Appellate Body confirmed the broad scope of Article 4.2 in Chile – Price Band System , stating that Article 4. 2 
was the "legal vehicle " for the conversion of all "market access barriers " into ordinary customs duties. United 
States ' second written submission, para. 95 (referring to Appellate Body Report, Chile – Price Band System , 
paras. 200 –201); United States ' response to Panel question No.  11. United States ' opening oral statement at 
the second substantive meeting of the Panel, para. 8 ). 
435 United States ' second w ritten submission, paras. 95 -96; opening oral statement at the second 
meeting of the Panel, para. 8.  
436 United States ' second written submission, paras. 96; response to Panel question No.  11. 
437 The United States argue d that they are not automatic because  they impose substantive prohibitions 
and restrictions on the type and quantity of products that can be i mported, as well as restrictions on, inter alia , 
who can apply to import, when importation can occur, and the purposes for which imports can enter. For the 
United States, regardless of the number of applications approved, or the lack of discretion on the p art of 
Indonesian officials in reviewing these applications, such measures cannot be considered "automatic " in any 
sense of the word. United States ' second written submission,  section III.A ; response to Panel question No.  11; 
opening oral statement at the second meeting of the Panel, para. 12.  WT/DS477/R • WT/DS478/R  
 
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  effective ", i.e. produced or become operative438, "through " import licenses. In our view, the text of 
Article XI:1 of the GATT  1994 does not support Indonesia's  contention that automatic import 
licenses are excluded from the scope of Article XI:1 of t he GATT  1994. We also concur with the co -
complainants that the essence of an analysis under Article  XI:1 of the GATT 1994 does not depend 
on how a measure is labelled, but rather on whether it imposes a restriction or prohibition on 
importation. In this se nse, we are of the view that a determination of whether the measures at 
issue constitute automatic import licences or import licensing procedures is not a necessary 
threshold in our examination of the co -complainants' claims under Article  XI:1 of the GATT  1994. 
Like the panel in Argentina – Import Measures , we consider that what is relevant when examining 
a measure under Article  XI:1 of the GATT  1994 is whether a measure prohibits or restricts trade, 
rather than the means by which such prohibition or restri ction is made effective.439  
7.56.   We also observe that the Import Licensing Agreement does not operate to exclude 
automatic import licences or licensing procedures per se from the scope of Article XI:1 of the 
GATT  1994. In fact, the provision relied upon by Indon esia, Article 2.2(a), is in line with Article  XI 
of the GATT 1994 in providing that automatic licensing procedures "shall not be administered … as 
to have restrictive  effects on imports … ". Moreover, Article  1.2 provides that "Members shall 
ensure that the  administrative procedures used to implement import licensing regimes are in 
conformity with the relevant provisions of GATT  1994".   
7.57.   We thus conclude that we do not need to examine whether Indonesia's measures at issue 
constitute automatic import licences  or licensing procedures as a necessary threshold question in 
our analysis of the claims under Article  XI:1 of the GATT  1994.  
7.2.4.2   Indonesia's reliance upon  Article XI:2(c)(ii)  of the GATT  1994  
7.58.   We now proceed to examine the second argument put forward by Indone sia in seeking to 
exclude some of its measures from the scope of Article XI:1 of the GATT 1994. In this instance, 
Indonesia has relied upon Article  XI:2(c)(ii) of the GATT  1994 to exclude Measure  4 (Harvest 
period requirement)440, Measure  7 (Reference prices  for chillies  and shallots)441 and Measure  16 
(Beef reference price)442 from the scope of Article  XI:1. Indonesia contend ed that these measures 
are necessary to remove a temporary surplus of horticultural products, animals and animal 
products in Indonesia's do mestic market.443 We recall that Article XI:2(c)(ii)  of the GATT  1994 
reads as follows:  
2. The provisions of paragraph 1 of this Article  shall not extend to the following:  
(a) … 
(c) Import restrictions on any agricultural or fisheries product, imported in 
any form,* necessary to the enforcement of governmental measures which 
operate:  
(i) … 
(ii) to remove a temporary surplus of the like domestic product, 
or, if there is no substantial domestic production of the like 
product, of a domestic product for which th e imported product can 
be directly substituted, by making the surplus available to certain 
groups of domestic consumers free of charge or at prices below the 
current market level;…  
7.59.   The co -complainants responded  that Article XI:2(c)(ii) is no longer availab le with respect to 
agricultural products following the entry into force of the Agreement on Agriculture. The co -
complainants explained that  footnote 1 to Article  4.2 of the Agreement on Agriculture sets out an 
illustrative list of measures that have been required to be converted into ordinary customs duties, 
and excludes  measures maintained "under other general, non -agriculture -specific  provisions of the 
                                                
438 Appellate Body Report, Argentina – Import Measures , para. 5.218.  
439 Panel Report, Argentina – Import Measures , para. 6.363.  
440 Indonesia 's second written submission, para.  203. 
441 Indonesia 's second written submission,  para. 197. 
442 Indonesia 's second written submission, para.  199. 
443 Indonesia 's second written submission, paras.  252-257. WT/DS477/R • WT/DS478/R  
 
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  of GATT 1994 ". According to the co -complainants, a s Article XI:2(c) applies explicitly to  "import 
restri ctions on any agricultural or fisheries product ", it is not a "general, non -agriculture -specific 
provision " of the GATT 1994 . Thus such measures  have not been excluded from the types of  
measures which were required to be converted to ordinary customs dutie s under Article  4.2 of the 
Agreement on Agriculture . The co -complainants also drew the Panel's attention to Article  21.1 of 
the Agreement on Agriculture , which provides that  the provisions of the GATT  1994 apply "subject 
to the provisions of this Agreement ".444 The co -complainants further submitted that even if 
Article  XI:2(c)(ii) of the GATT  1994 were applicable , Indonesia failed to demonstrate its 
constitutive elements.445 
7.60.   We agree  with the co -complainants . As they explained, Article XI:2(c) has been rendered  
inoperative  with respect to agricultural measures by Article 4.2 of the Agreement on Agriculture , 
which prohibits Members from maintaining, resorting to, or reverting to, "any measures of the kind 
which have been required to be converted into ordinary cus toms duties ". Footnote 1 to Article  4.2 
provides that the only measures that fall outside the scope of this provision are the ones 
"maintained under balance -of-payment provisions or under other general, non -agriculture -specific 
provisions of the GATT 1994 or of the other Multilateral Trade Agreements in Annex 1A to the WTO 
Agreement ". Article XI:2(c)  by its terms concerns agricultural products and therefore does not 
qualify under the exclusion for general, non -agriculture -specific provisions. Therefore, Ind onesia 
cannot rely upon Article  XI:2(c)(ii) of the GATT 1994. This is confirmed by Article 21 of the 
Agreement on Agriculture, which provides that "[t]he provisions of GATT 1994 ", including 
Article  XI:2(c)(ii) of the GATT  1994, "shall apply subject to the provisions of this Agreement ". 
Accordingly, we conclude that Indonesia cannot rely upon Article  XI:2(c)(ii) of the GATT 1994 to 
exclude Measures 4, 7 and 16 from the scope of Article XI:1 of the GATT  1994 because, with 
respect to agricultural measures, Article XI:2(c) has been rendered inoperative by Article 4.2 of 
the Agreement on Agriculture.  
7.2.5   Whether Measure  1 (Limited application  windows and validity periods ) is 
inconsistent with Article XI:1 of the GATT  1994  
7.2.5.1   Arguments of the parties  
7.2.5.1.1   New Zealand  
7.61.   New Zeal and claims that the limited application and validity periods for horticultural 
products under the import licensing regime have a limiting effect on imports contrary to 
Article  XI:1 of the GATT  1994 as they adversely affect the volume of horticultural impor ts into 
Indonesia. According to New Zealand, importers may only submit applications for RIPHs and 
Import Approvals during limited application windows and the RIPHs and Import Approvals set out 
limited validity periods for the importation of horticultural p roducts into Indonesia. New Zealand 
argues that these requirements are structured in such a way that imports are severely restricted 
over the period between validity periods.446 
7.62.   New Zealand explains that RIPHs are issued twice a year for the periods January to June 
and July to December. For the period from January to June, the application window for RIPHs is 15 
working days from the start of November of the previous year. For the period June to December , 
the application window for RIPHs is 15 working days fro m the start of May of the current year.447 
For Import Approvals for RIs the application window for the January to June validity period is 
December, and for the July to December period, the application period is June.448 New Zealand 
argues, however, that the ap plication windows for Import Approvals are often not open for the 
entire month.449 New Zealand submits that these narrow application windows, combined with 
                                                
444 New Zealand 's response to Panel question No.  114. United States ' response to Panel question 
No. 114. 
445 New Zealand 's response to Pane l question No.  114. United States ' response to Panel question 
No. 114.  
446 New Zealand 's first written submission, para . 211. 
447 New Zealand 's first written submission, para. 212 (referring to Article 13, MOA 86/201, 
Exhibit  JE-15); second written submission , para. 180 . 
448 New Zealand 's first written submission, para . 212 (referring to. Article 13A, MOT 16/2013  as 
amended by MOT 47/2013 (Exhibit JE -10)). Article 13A of  MOT 40/2015 (Exhibit JE -11), which further amends 
MOT 16/2013 , sets out these same applicati on and validity windows.  
449 New Zealand 's first written submission, para . 213; second written  submission, para. 180. 
Exhibit  NZL-51, in particular, shows that, for the period January -June 2014, the application window for Import 
Approvals was only seven work ing days from 9 -17 December 2014.  WT/DS477/R • WT/DS478/R  
 
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  seasonality and the time it takes to package and ship product to Indonesia, negatively affects 
supplie rs, particularly those with longer transportation lines.450 For New Zealand, imports are also 
disrupted at the end of each validity period because importers do not want to risk having products 
arriving in Indonesia after the semester has ended451, particularly  due to the applicable sanctions. 
In its view, this decrease in imports of horticultural products in the first month of each validity 
period, and at the end of each period, is reflected in the trade statistics for New  Zealand apple and 
onion exports to Ind onesia.452 In response to Indonesia's argument that such information is mere 
"anecdotal " evidence, New Zealand argues that is not the case since the trade statistics in question 
are sourced from the New  Zealand Customs Service, focusing on exports to Indones ia of 
horticultural products of particular importance to New  Zealand.453  
7.63.   New Zealand contends that the panels in Colombia – Ports of Entry  and Argentina – Import 
Measures  (citing previous GATT panel decisions) have confirmed that measures which restrict 
market access can constitute quantitative restrictions contrary to Article XI:1 of the GATT 1994.454 
New Zealand submits that this is the case as well for the limited application windows and validity 
period requirement s as they restrict the competitive opportun ities and have a limiting effect on 
horticultural product imports, contrary to Article XI:1 of the GATT 1994.455 
7.2.5.1.2   United States  
7.64.   The United States claims that  Indonesia's application window and validity period  
requirements are inconsistent with Article XI:1 of the GATT  1994 because they constitute 
restrictions within the meaning of that provision, i.e. "a limitation, or limiting condition on 
importation, or has a limiting effect on importation ".456 The United States argues that these 
requirements constitute restr ictions within Article XI:1 because their structure causes a period of 
several weeks at the end of one semester, and at the beginning of another, when products from 
the United States (and other Members far from Indonesia) cannot  be exported to Indonesia.457 
Additionally, the United States claims that this requirement is not a duty, tax, or other charge, 
and, therefore, is within the scope of Article  XI:1.458 
7.65.   The United States explains that a n RI can apply for an RIPH and Import Approvals to import 
horticultural  products only during a limited window prior to the beginning of a new semester, that 
RIPHs and Import Approvals are valid only for one six -month period, and that an RI must reapply 
for them every semester. According to the United States, shipping of horti cultural products for any 
semester cannot begin until after RIPHs and Import Approvals are issued because exporters 
shipping goods to Indonesia must have valid RIPH and Import Approval numbers from the RI in 
Indonesia in order to have their horticultural p roducts inspected and verified in the country of 
origin. The United States contends that, once an RI obtains its RIPH and Import Approval and 
places its orders for the next semester, it takes at least four to six weeks for horticultural products 
to arrive in Indonesia, assuming that the US exporters ship immediately. In these conditions, the 
products must arrive in Indonesia and clear customs before the end of the semester.459  
7.66.   According to the United States, these periods of non -shipment created by the struc ture and 
operation of the application windows and validity periods of the RIPHs (15 working days in 
November and May only) and Import Approvals (one month in December and June only) impose 
limiting conditions on importation and have direct limiting effects  on horticultural product 
imports.460 The United States finds support for its allegation that the structure of the application 
windows and validity periods respectively applicable to RIPHs and Import Approvals are restrictions  
                                                
450 New Zealand 's first written submission, para . 214. 
451 New Zealand 's first written submission, para . 215. 
452 New Zealand 's first written submission, paras . 216-217. 
453 New Zealand 's second written submission, para. 182.  
454 New Zealand 's first written submission, para . 219 (referring to Panel Report, Colombia – Ports of 
Entry , paras. 7 .238-7.241 (citing Canada – Provincial Liquor Boards  (EEC), paras. 4.24 and 4.25; Canada – 
Provincial Liquor Boards (US) , para. 5.6; and EEC – Minimum Import Prices , para. 4.9) and Panel Report, 
Argentina – Import Measures , para. 6.454).  
455 New Zealand 's first written submission, para . 219 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.274.)  
456 United States ' first written submission,  para. 154 . 
457 United States ' first written submission, para. 155.  
458 United States ' first written submission, fn. 283.  
459 United States ' first written submission, para. 156 -158; second written s ubmission, para. 14; 
response to Panel question No.  28, para s. 100-102. 
460 United States ' first written submission, para. 157.  WT/DS477/R • WT/DS478/R  
 
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  under Article XI:1 in prior jur isprudence461, and in particular, in the panel report in Colombia – 
Ports of Entry.  The United  States submits that the panel considered a measure that restricted the 
entry to two Colombian ports of imports of certain textile and apparel products from Panama and 
found that the challenged measure h ad a "limiting effect " on imports because "uncertainties, 
including access to one seaport for extended periods of time and the likely increased costs that 
would arise for importers operating under the constraints of t he port restrictions, limit competitive 
opportunities for imports arriving from Panama. "462 The United States contends that Indonesia's 
requirements go well beyond "uncertainties " and "likely increased costs " since Indonesia's 
measures operate to wholly excl ude US horticultural products from the Indonesia n market for four 
to six weeks out of every semester, and two to three months out of every year.463 
7.67.   The United States also argues that, although not required  under Article XI:1 of the 
GATT  1994, it submitted ev idence demonstrating the effect of this "no-shipment " period on 
imports, including statements by exporters of horticultural and animal products attesting that the 
application windows and validity periods prevent them from selling to Indonesia altogether fo r the 
last four to six weeks of one validity period and the beginning of the next.464  
7.68.   In response to Indonesia's argument that the market share of US -origin oranges, lemons, 
frozen potatoes, and grapefruit juice increased from 2012 to 2014465, the United Stat es argues 
that while the market share  of US -origin oranges grew between 2012 and 2015, overall imports of 
oranges fell significantly over the same period. The United States also contends that the data on 
Indonesia’s orange imports do not contradict the prima facie case established by the co -
complainants.466 
7.2.5.1.3   Indonesia  
7.69.   Indonesia argues that its import licensing system for horticultural products is an automatic 
import licensing system and that, for this reason, it does not v iolate Article XI:1 of the 
GATT  1994.467 Indonesia contends that should the Panel prefer to assess each element of 
Indonesia's import licensing regime for horticultural products, the application windows and validity 
periods do not violate Article XI:1 of the GATT 1994 because they allow for cont inuous importation 
of products into Indonesia.468 
7.70.   Indonesia submits that it is simply untrue that there is a period of time during which 
imports are "restricted " as a function of the timing of the import licence application process.469 For 
Indonesia, the co -complainants' argument is at odds with their argument that they are compelled 
to import too much as a result of the realization  requirement. Indonesia also contends that the 
market share of many key imports from the co -complainants has increased since the 
implementation of Indonesia's current import licensing regime, contrasting with the co -
complainant's argument s that the import licensing regime has trade -restrictive effects. Indonesia 
submits that this evidence shows that the application window and validity  period elements of 
Indonesia's import licensing for fresh horticultural products is consistent with Article XI:1 of the 
GATT 1994 .470 
7.71.   Indonesia argues that nothing in Article XI:1 of the GATT 1994 prevents Members from 
implementing reasonable, non -discrimin atory licensing schemes to regulate imports. According to 
Indonesia, the fact that the licences are not infinite in duration or that the application periods are 
                                                
461 United States ' first written submission, para. 158 (referring to Appellate Body Report,  Argentina – 
Import Measures , para. 5.217; Appellate Body Report, China – Raw Materials , para. 320).  
462 United States ' first written submission, para. 158 (referring to the Panel Report, Colombia – Ports of 
Entry , para. 7.274).  
463 United States ' first written submission, para. 158.  
464 The United States also refers to trade data showing that shipments of US appl es to Indonesia came 
to a halt towards the end of the semesters in December and June in the period 2013 -2015; data showing that 
the gap in shipments did not occur prior to the 2012 -2013 season, when the import licensing regulations 
became effective; and da ta showing  that the total quantity of US  apple exports to Indonesia dropped 
significantly beginning in the 2012 -2013 season and have n ot returned to pre -2013 levels. United States ' 
second written submission, para. 15 .  
465 Indonesia 's opening s tatement  at the first substantive meeting of the Panel , para. 20; see also 
Indonesia 's response to Panel question No.  18. 
466 United States ' second written submission, para. 18.  
467 Indonesia 's second written submission, para. 165.  
468 Indonesia 's second written submission, p ara. 166.  
469 Indonesia 's first written submission, para. 134.  
470 Indonesia 's second written submission, para. 159.  WT/DS477/R • WT/DS478/R  
 
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  fixed to certain periods does not give rise to a quantitative restrictio n within the meaning of  
Article  XI:1 of the GATT 1994.471 Indonesia contends that application windows are permitted under 
Article 1(6) of the Import Licensing Agreement  and that it allows  15 working days (21 calendar 
days) for the application window to apply for an RIPH for hortic ultural products  and a one -month  
application window for IA applications. Indonesia further sustains that a ll applications for RIPH s, 
Recommendations or Import Approvals can be submitted online at INATRADE (Trade Licensing 
Services Using Electronic and Onli ne System) and REIPPT (Export Import Recommendation for 
Certain Agricultural Products) .472 
7.72.   For Indonesia, the validity periods of its import licences for horticultural products, animals, 
and animal products cover the entire calendar year and there is no peri od of time during which 
imports are restricted as a function of the lapse in validity periods.473 Indonesia also contends that 
the application window and validity period s are very common features among WTO Members  in 
administering imports.474 
7.2.5.2   Analysis by the P anel 
7.73.   As noted in paragraph  7.37 above , the Panel will  examine each of Indonesia' s 18 measures 
in turn. Thus th e first task before the Panel is to establish whether, as claimed by the co -
complainants, Measure  1 is inconsisten t with Article XI:1 of the GATT  1994 because it constitutes a 
restriction having a limiting effect on the import ation of horticultural imports into Indonesia and 
limits the competitive opportunities of importers and imported products .475 As explained in Sect ion 
7.2.3  above, prior panels  have followed a two -step test where by they first  establish whether the 
complainant ha s demonstrated that the measure at issue falls within the scope of Article XI:1 of 
the GATT 1994 , followed by a consideration of  whether the complainant ha s demonstrated that the 
measure at issue  has a limiting effect on importation . 
7.74.   The co -complainants argue d that Measure  1 constitutes a restriction on importation476, and 
that it is not a duty, tax, or other charge, and, therefore, is within the scope of Article XI:1.477 New 
Zealand further argue d that the components of Indonesia's import licensing regime for animals, 
animal products and horticultural products, which include Measure 1, constitute prohibitions or 
restric tions made effective through an "import licence " or, alternatively, an "other measure ".478 
The United States submit ted that Article  XI:1 applies to any "restriction, " including those "made 
effective through  quotas, import or export licenc es or other measures ".479 
7.75.   Indonesia did not contest the co -complainants' characteri zation of Measure  1.480 Rather, it 
has responded that its measures are outside the scope of Article XI:1  because they are automatic 
import licensing regimes .481 We recall our conclusion in Section  7.2.3.2.1  above that automatic 
import licensing procedures do not fall per se  outside the scope of Article XI:1 of the GATT 1994. 
Given the description of Measure  1 in Section 2.3.2. 1 above , we concur with the co -complainants 
in that Measure  1 is not a duty, tax, or other charge and it is therefore not excluded explicitly from 
the scope of Article  XI:1 of the GATT  1994.  
7.76.   Given the broad scope of "other measures ", we consider it more e fficient to follow the 
approach of the panel in Argentina – Import Measures482 described in paragraph  7.42 above  and 
thus proceed to examine whether the co -complainants demonstrated that Measure  1 prohibits or 
restricts trade,  rather than examining the means by which such prohibition or restriction would be 
made effective. In doing so, we will determine whether  the co-complainant s demonstrated that 
Measure  1 has a limiting effect on importation . To carry out this analysis, we r ecall that the Panel 
may examine the design, architecture, and revealing structure of Measure  1, within its relevant 
context.  
                                                
471 Indonesia 's first written submission, para. 135.  
472 Indonesia 's second written submission, para. 161.  
473 Indonesia 's second written submission,  para. 163.  
474 Indonesia 's second written submission, para. 164.  
475 New Zealand 's first written submission, para . 211; United States ' first written submission, para. 155.  
476 New Zealand 's first written submission, para . 211; United States ' first written subm ission, para. 155.  
477 New Zealand 's first written submission, para . 284; United States ' first written submission, fn. 283.  
478 New Zealand 's first writte n submission, para. 284.  
479 United States ' first written submission, para. 142.  (emphasis original)  
480 Indon esia's response to Panel question No.  10. 
481 Indonesia 's second written submission, para. 165.  
482 Panel Report, Argentina – Import Measures , para. 6.363.  WT/DS477/R • WT/DS478/R  
 
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  7.77.   In this - respect, as described in Section 2.3.2.1 above , Measure 1 consists of the of the 
limited  application windows  and the six -month validity period of RIPHs and Import Approvals , 
together with  some pre -shipment requirements that preclude importers f rom shipping their 
products before they obtain an Import Approval  and the requirement that importers  must 
complete all importations of horticultural products covered in their  RIPHs and Import Approvals  
during the validity period of these documents .483 Indonesia applies this M easure pursuant to 
Article  13 of Regulation  MOA 86/2013 , which regulates the relev ant timeframes concerning RIPHs 
and Article s 13A, 14, 21, 22 and 30  of Regulation  MOT 16/2013 , as amended, which does the 
same for Import Approvals.  We discern the following elements in the design, architecture and 
structure of this measure as per the ment ioned regulations : 
a. Pursuant to Article 13 of MOA 86/2013, importers may apply for an RIPH for the validity 
period from January to June during 15 working days starting in early November of the 
previous year, and for the validity  period from July to December  during 15 working days 
starting in early May of that year;  
b. Pursuant to Article 13A of MOT 16/2013, as amended, applications for Import Approvals 
may be made in December for the validity  period from January to June, and in June for 
the validity  period from  July to December;  
c. Pursuant  to Article s 21(1) and 21(2) of MOT  16/2013, as amended by MOT 47/2013, 
every importation of horticultural products must undergo a technical verification which is 
carried out by a surveyor designated by the Minister of Trade. Art icle 22 of MOT  
16/2013, as amended, provides that the verification conducted under Article  21(1) 
examines information that includes the country and port of origin, the tariff classification 
and product description, and the type and volume of the products t o be imported.  
d. Pursuant  to Article 30 of MOT 16/2013, as amended , fresh or processed horticultural 
products imports that is not the horticultural product included in the recognition of the 
PI-Horticultural products and/or the Import Approval will be destro yed or re -exported in 
accordance with regulatory legislation . 
7.78.   According to New Zealand, Measure  1 is structured in such a way that imports are severely 
restricted over the period between validity periods . This is because  importers may only submit 
applicati ons for RIPHs and Import Approvals during limited windows and the RIPHs and Import 
Approvals set out limited validity periods for the importation of horticultural products.484 The 
United States shares New Zealand's view and argues that Measure  1 constitutes a restriction 
within the scope of Article XI:1 because its structure causes a period of several weeks at the end 
of one semester and the beginning of another when products from the United States (and other 
Members far from Indonesia) cannot be exported to Indonesia.485 
7.79.   Key to understanding the co -complainants' challenge to this measure is their contention that 
horticultural products cannot be shipped from the country of origin until after the Import Approval 
for that period has been issued.486 In their view, some of the data required by Article  22 of 
MOT 16/2013, as amended by MOT 47/2013, can only be obtained after receiving the RIPHs and 
Import Approvals for the relevant validity period and , therefore, the shipment of horticultural 
                                                
483 Request for the Establishment of a Panel by New Zealand, p p. 1-4; Request for the Establishment of 
a Panel by the United States, p p. 1-4; New Zealand 's first written submission, para . 87; United States ' first 
written submission, paras.  46. 
484 New Zealand 's first written submission, para . 211. 
485 United States ' first written submission, para. 155.  
486 New Zeala nd's first written submission, para. 8 8; United States ' first written submission, para. 47.  
New Zealand refers to Example Import Approval 1, para. 1 (Exhibit NZL -47) and to Article 22, MOT 16/2013  
(Exhibit JE -8) which sets out the pre shipment inspection ( PSI) requirements that importers must comply with 
prior to shipping horticultural products to Indonesia. New Zealand submits that the information required by the 
PSI surveyor is the information contained in an importer 's Import Approval , meaning that an im porter must 
obtain an Import Approval prior to PSI and therefore, horticultural products cannot be shipped from their 
country of origin until after the Import Approvals for that period are issued. The United States refers to Ministry 
of Trade, Import Appro val for Horticultural Products, para . 1 (Exhibit USA -19) (stating: "Imports of the 
aforementioned Horticultural Products must undergo verification or technical inquiry in the country of origin …in 
a manner that is in accordance with customs procedures " and the RI "must show an original copy of this 
Import Approval letter for Horticultural Products to a Customs and Excise official, on site, for each importation 
activity, in order to complete the Import Realization  Control Card (attached), which verifies the quantity and 
type of imported goods ").  WT/DS477/R • WT/DS478/R  
 
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  products can only begin afte r obtaining these documents, in particular, the Import Approval.487 In 
support, t he co -complainants refer red to Exhibit USA -69, which contains the provisions for 
verification of horticultural products from KSO SUCOFINDO, a surveyor designated by Indonesia's 
Ministry of Trade, which requires that, in order to apply for a verification request, importers need 
to file certain documents, including an Import Approval for horticultural products.488  
7.80.   We understand that the alleged restriction occurs because of the comb ination of the 
different elements or requirements that encompass Measure  1, namely (i) the timing of the 
application windows, (ii) the requirement that all horticultural goods arriving into Indonesia must 
clear customs during the validity period of the rel evant Import Approval489, and (iii) the 
requirement that an Import Approval must be issued before products are shipped to Indonesia 
together with the factual circumstances inherent in international transportation depending on the 
geographical location of the  exporting country. According to the evidence on the record, it  may 
take two to six weeks for products shipped from the co -complainants to reach Indonesia.490 The 
following graph shows the operation of the various requirements integrat ed into  Measure  1: 
Impo rt licensing for horticultural products:  Measure 1 scenario  
 
 
7.81.   To ensure that we underst ood and analyse d correctly the design, architecture, and revealing 
structure of this Measure a s well as  its resulting operation in practice , the Panel devised a 
hypothe tical scenario that we shared with the parties. We sought their views to confirm whether 
our assumptions accurately reflect ed the functioning of this Measure .491 In our hypothetical 
scenario, w e assume d that an importer has obtained an RIPH and an Import App roval for the 
validity period of January -June 2015 and that it takes, on average, four weeks for the products to 
get from the country of origin to Indonesia. This means that at the latest, the importer must make 
                                                
487 New Zealand 's response to Panel question No.  28; United States ' response to Panel question No.  28.  
488 Exhibit USA -69. 
489 We understand this is a result of the validity periods for the RIPHs and Import Approvals and Article 
30 of MOT 16/2013, as amended . See also  Exhibit USA -19 presenting an Import Approval which states "This 
Import Approval is valid beginning July 1, 2014 (one July two thousand fourteen) until December 31, 2014 
(thirty one December two thousand fourt een), as proven by the date of a customs registration notice, Manifest 
(BC 1.1), in accordance with valid customs provisions".  
490 See Exhibit USA -21, USA -49, NZL -49, NZL -50, NZL -97. See also  New Zealand 's response to Panel 
question No.  94; United States ' response to Panel question No.  94; Indonesia 's response to Panel question 
No. 94; New Zealand 's comments on Indonesia 's response to Panel question No.  94. 
491 See Panel Question n o. 94.  WT/DS477/R • WT/DS478/R  
 
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  its last shipment by the beginning of June f or the products to arrive on time to be admitted into 
Indonesia before the validity of the Import Approval expires. We also assume d that the same 
importer applied for an RIPH and an Import Approval for the validity period July -December 2015 
during the appl ication window for each of the se documents ( i.e. the first 15  business days of May 
for the RIPH, and the month of June for the Import Approval). Following Article 13(A)(2)  of 
MOT 16/2013, as amended , the Import Approval would be issued at the beginning of each 
semester, i.e. in July in this scenario. Therefore, the earliest the importer would be able to ship 
horticultural products under the validity period of July -December would be at the beginning of July 
because  it cannot ship any products before obtainin g the new Import Approval (due to the pre -
shipment verification requirements). If the importer were able to ship the products immediately 
after obtaining the Import Approval, the products would arriv e at the beginning of August due to 
the shipping time ass umptions. In this scenario, there would be no imports during the month of 
July, the importer would have to stop imports at the beginning of June and could only resume 
them after obtaining a new Import Approval in early July.  
7.82.   The hypothetical scenario , which was modelled to closely follow how the different elements 
or requirements encompassed in this Measure operate , shows that  by virtue of the design, 
architecture and revealing structure  under Indonesia's import licensing regime for horticultural 
products,  there is a period of time w hen there are no imports into Indonesia. While the co -
complainants agreed that the scenario provided an accurate depiction of the way the measure 
works492, Indonesia argued that the scenario does not  take into account the duration  of the 
approval process, both for RIPH and for Import Approval. Indonesia explained that if the complete 
application for  an RIPH is received on the first day of the applica tion window pursuant to Article  12 
of MOA 86/2013, the RIPH will be issued within seven days (8 November at the latest), and in the 
case of Import Approvals,  if the complete application for Import Approval is received by the 
Ministry of Trade on 1 December, the Import Approv al will be issued within two days  (3 December 
at the latest).493 For Indonesia, t his means the importer will be able to import its products right 
after the issuance of the Import Approval, and the products will arrive in Indonesia by the 
beginning of the import period. Indonesia also contended that it takes approximately  two weeks  to 
ship products from different ports in New Zealand to Indonesia 494 and that it is possible to obtain 
an extension under Article 12A of MOT 17/2014.495   
7.83.   The co -complainants responded that Indonesia's contention that the Import Approval will be 
issued within two days is incorrect because Article  13(A)(2) of MOT 16 /2013, as amended, clearly 
stipulates that Import Approvals are issued "at the beginning of each semester. "496 New Zealand 
also disagree d with Indonesia's statement that it takes approximate ly two weeks to ship product s 
from New Zealand to Indonesia. In the c ontext of the similar measure applicable to animals and 
animal products, New Zealand explained that in reality, it takes at least three weeks to ship bovine 
meat and offal from New Zealan d to Indonesia, plus another one to two weeks to prepare the 
shipment prior to export.497  
7.84.   We concur with the co -complainants in that Article 13(A)  of MOT 16/2013, as amended, 
explicitly provides that Import Approvals are issued at the beginning of each seme ster. We note 
that Indonesia r elied upon  Article 11 of MOT 71/2015  in seeking to respond to allegations about 
the time it takes to receive approvals . However, this regulation was issued after the establishment 
of this Panel and  is not within the various el ements that constitute the measure before us.  We also 
note that even if it were included in Measure 1, Article  11 of MOT 71/2015  does not stipulate  when 
an Import Approval sh all be issued  and hence we do not find support there for Indonesia's 
statements about the timing of approvals .498 In relation to Indonesia's contention regarding the 
                                                
492 New Zealan d's response to Panel question No.  94; United States ' response  to Panel question No.  94;  
493 Indonesia 's response to Panel question No.  94, para. 32. We note that in support of the contention 
that the Import Approval will be issued within 2 days, Indonesia refers to Article 11 of MOT 71/2015 . 
494 Indonesia 's response to  Panel question No.  94, para. 34.  
495 Indonesia 's response to Panel question No.  94, para. 33.  
496 New Zealand 's comments on Indonesia 's response to Panel question No.  94 (referring to Article 
Article 13A of MOT 16/2013, as amended , Exhibit JE -10; Onions New Z ealand Exporter Statement, Exhibit 
NZL-49; and Pip Fruit New Zealand Export Statement, Exhibit NZL -50). United States ' comments on 
Indonesia 's response to Panel question No.  94. 
497 New Zealand 's comments on Indonesia 's response to Panel question No.  94 (ref erring to Meat 
Industry Association Statement, p. 8, Exhibit NZL -12 and to "Letter from Onions New  Zealand regarding 
shipping times for onions from New  Zealand to Indonesia " (Exhibit NZL -97).  
498 Article 11 of MOT 71/2015  provides as follows:  
The timing for  the submission of applications for Import Approval for companies  
possessing API -U, is as follows:  
a. Import Approval for Fresh Horticultural Products is divided into two [periods] each  WT/DS477/R • WT/DS478/R  
 
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  shipping time, we recall that in paragraph 7.80 above,  we mentioned that there was evidence on 
the record that i t may take two to  six weeks for products shipped from the co -complainants to 
reach Indonesia.499 Nonetheless, even if  we were to assume that it only takes two weeks to ship 
products from New Zealand to Indonesia, the above hypothetical scenario would still show that for 
a period of time , no imports would enter Indonesia. The only difference  would be that the period 
when imports would not enter would be reduced from one month to two weeks.  In any event, we 
note that unless the products were able to reach Indonesia the followin g day after receiving the 
Import Approval, something that seems highly unlikely to us, there would always be a period of 
time whe n there would be no imports to Indonesia.  Regarding Indonesia's argument that the RIPH 
will be issued within seven  days, we not e that even in this scenario , the importer would still have 
to wait another three weeks before submitting an Import Approval application , because the 
application window starts only in December . In this sense, the RIPH issuance timelines become 
irrelevant . 
7.85.   We also note that other than contesting timeframes for issuing approvals and the shipping 
time from New Zealand, Indonesia did not take issue with other elements of the hypothetical 
scenario set forth above, nor with the manner in which it reflects the des ign, architecture and 
revealing structure of Measure 1 . 
7.86.   As we explained above, th e effect on import ation can be attributed to the intrinsic  elements 
of Measure  1, namely (i) the timing of the application windows, which is very close to the 
expiration of th e previous import documents , (ii) the requirements that preclude importers from 
shipping products before having obtained the new Import Approval, and (iii) the requirement that 
all horticultural goods arriving in Indonesia must clear customs during the val idity period of the 
relevant Import Approval . Added to these is that  international transportation  from the co -
complainants necessarily takes some time . 
7.87.   While the intrinsic elements of Measure 1 are attributable to Indonesia, the factual 
circumstances resul ting from the geographical location of the co -complainants are obviously not 
attributable to Indonesia. I ndeed, Indonesia argued  that "its geographic location on the planet is 
not a 'measure' designed to 'restrict' imports from either New Zealand or the United States ".500 We 
agree. However,  Indonesia should have taken into account when designing the various elements 
that encompass Measure  1 that international transportation necessarily would have an impact on 
the operation of the measures and the ability of W TO Members to meet Indonesia’s requirements.   
7.88.   We also observe that the operation of Measure 1 as depicted in our hypothetical scenario 
above and the resulting period with no imports is confirmed by the trade statistics submitted by 
the co -complainants. T he graphs shown in Annexes 4 and 5 of New Zealand's first submission 
describe apple and onion exports to Indonesia, contrasting the statistics for the same months in 
the years prior to the import licensing regime being put in place at the end of 2012. The vo lume of 
imports decrease d in the periods between validity periods of Import Approvals.  Similarly, in Exhibit 
USA-50, weekly export statistics for apples, as compiled by the US Northwest Horticultural Council, 
show that, from 2013 to 2015, shipments of US a pples to Indonesia also "came to a halt towards 
the end of the first and second semesters ", i.e. in December and June.   
7.89.   Having examined the design, architecture and revealing structure of Measure  1, we 
conclude that Measure  1 has a limiting effect on impor tation because, during certain periods of 
time, the operation of Measure 1 results in no imports of horticultural products into Indonesia.  
                                                                                                                                                  
year, with the following provisions:  
1. for the first Semester, the pe riod from January to June, applications must be  
submitted in the month of December of the previous year; and  
2. for the second Semester, the period from July to December, applications must be  
submitted in the month of June of that year.  
b. Import Approval applications for Fresh Horticultural Products, specifically chillies  
(fruits of the genus Capsicum ) with Tariff Number/HS 0709.60.10.00 and fresh  
shallots for consumption with Tariff Number/HS/0703.10.29.00, can be submitted at  
any time;  
c. Import Approval  applications for Processed Horticultural Products can be submitted at  
any time. (Exhibit JE -12) 
499 See Exhibit USA -21, USA -49, NZL -49, NZL -50, NZL -97. See also  New Zealand 's response to Panel 
question No.  94; United States ' response to Panel question No.  94; Indonesia 's response to Panel question 
No. 28; New Zealand 's comments on Indonesia 's response to Panel question No.  94. 
500 Indonesia 's first written submission, fn. 83.  WT/DS477/R • WT/DS478/R  
 
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  7.90.   In addition, we note that the co -complainants have also argued that Measure  1 has a 
negative effect on the competitiv e opportunities of imported products. In this respect, New 
Zealand referred to the panels in Colombia – Ports of Entry  and Argentina – Import Measures  
(citing previous GATT panel decisions) that have confirmed that measures that restrict market 
access can constitute quantitative restrictions contrary to Article XI:1 of the GATT 1994.501 For 
New Zealand, this is the case of the limited application window s and validity period  requirements 
as they restrict competitive opportunities.502 Similarly, the United States  found support in the 
panel report in Colombia – Ports of Entry , and explained how that panel considered a measure that 
restricted the entry to two Colombian ports of imports of certain textile and apparel products from 
Panama and found that the challenged  measure had a "limiting effect " on imports because 
"uncertainties, including access to one seaport for extended periods of time and the likely 
increased costs that would arise for importers operating under the constraints of the port 
restrictions, limit c ompetitive opportunities for imports arriving from Panama. "503 The United 
States submitted that Indonesia's requirements go well beyond "uncertainties " and "likely 
increased costs " since Indonesia's measures operate to wholly exclude US horticultural product s 
from the Indonesia market for four to six weeks out of every semester, and two to three months 
out of every year.504 
7.91.   We agree with the co -complainants that the way Measure  1 is designed and structured 
results in a limitation of the competitive opportunitie s of importers in practice because it restricts 
the market access of imported products into Indonesia .  
7.2.5.3   Conclusion 
7.92.   For the reasons stated above, we find that Measure  1 is inconsistent with Article XI:1 of the 
GATT  1994 because , by virtue of its design, arc hitecture and revealing structure,  it constitutes a 
restriction hav ing a limiting effect on importation . 
7.2.6   Whether Measure  2 (Periodic and fixed import terms ) is inconsistent with 
Article  XI:1 of the GATT  1994   
7.2.6.1   Arguments of the parties  
7.2.6.1.1   New Zealand  
7.93.   New Zealan d claims that Measure 2 (which it calls "Fixed Licence Terms ") constitutes a 
restriction on imports because it limits imports to the products, quantity, source and port of entry 
set out in the import approval documents thereby removing the ability of impor ters to respond to 
market forces and external factors that occur during a validity period.505 New Zealand submits that 
the Import Approvals that RIs must obtain specify the quantity of product t hat may be imported 
during a validity period. The quantities spe cified in the Import Approvals constitute the maximum 
quantity of that product that may be imported in the following validity period.506  
7.94.   New Zealand further argues that by determining the import terms at the start of a validity 
period and not allowing those  terms to be amended during the validity period of the import 
licences, Indonesia's regime has the effect of, among other things, prohibiting imports from 
countries other than those specified in the relevant import licence, and prohibiting imports arriving  
in a different Indonesian port than that specified in the RIPH or Import Approval.507 New Zealand 
submits that by restricting the parameters within which importers may import products (includi ng 
the port of entry) through the import licences, importers have  fewer opportunities to import 
horticultural products into Indonesia and that such restrictions have an impact on the "competitive 
                                                
501 New Zealand 's first written submission, para . 219 (referring to Panel Report, Colom bia – Ports of 
Entry , paras. 7 .238-7.241 (citing Canada – Provincial Liquor Boards  (EEC), paras. 4.24 and 4.25; Canada – 
Provincial Liquor Boards (US) , para. 5.6; and EEC – Minimum Import Prices , para. 4.9) and Panel Report, 
Argentina – Import Measures , para. 6.454).  
502 New Zealand 's first written submission, para . 219 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.274.)  
503 United States ' first written submission, para. 158 (referring to the Panel Report, Colombia – Ports of 
Entry , para. 7.274 ). 
504 United States ' first written submission, para. 158.  
505 New Zealand 's first written submission, para . 221 (referring to Appellate Body Report, Argentina – 
Import Measures , para. 5.217); second written submission, para. 195.  
506 New Zealand 's first written  submission, para . 222; second written submission, para. 196.  
507 New Zealand 's first written submission, para . 226. WT/DS477/R • WT/DS478/R  
 
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  opportunities " available to imported products.508 New Zealand claims that this has a consequential 
limiting effect on imports c ontrary to Article XI:1 of the GATT 1994.509  
7.95.   New Zealand also contends  that not only are these terms fixed for the period of validity of 
the licence, but Indonesia also limits which terms can be included in the import licence through the 
operation of other components of its import licensing regime for horticultural products.510 For New 
Zealand, it is therefore not correct to state that Indonesia does not place any limitations  on the 
terms identified because the various legal requirements operate together with Measure  2 to place 
limitations on the terms identified on the import licences.511 
7.96.   Responding to Indonesia's argumentation that the facts in Colombia – Ports of Entry  are 
different from those in this case because importers have the flexibility to identify mor e than one 
port of entry on the Import Approval application, New Zealand argues that such "flexibility " is at 
odds with the legal requirement set out in Article  32 of MOT 16/2013 whereby "[e]ach Horticultural 
Product can only be imported through destinatio n ports that are in accordance with regulatory 
legislation ".512 New Zealand also submits that, in any case, the requirement to set out the port of 
destination is only one of the requiremen ts of Measure  2 that cannot be amended during the 
period of validity o f the Import Approval.513 
7.2.6.1.2   United States  
7.97.   The United States claims that Measure  2 is a restriction wit hin the meaning of Article  XI:1 
and is therefore inconsistent with Article XI:1 of the GATT 1994.514 Additionally, the United States 
submits that this requireme nt is not a duty, tax, or other charge and, therefore, is within the scope 
of Article XI:1.515 According to the United States, Indonesia limits horticultural imports to products 
of the type, quantity, country of origin and port of entry listed on the RIPH an d Import Approval 
that are granted at the beginning of each semester; and prohibits the importation of any 
horticultural products, of other types, from different origins, or into diffe rent ports without a valid 
permit. The United States argues that a measu re is a "restriction " if it imposes "a limitation on 
importation, a limiting condition on importation, or has a limiting effect on importation. "516 The 
United States claims that since only certain imports, as listed on the RIPH and Import Approval at 
the out set of each semester, are allowed to enter the territory of a Member during that semester, 
that measure imposes a restriction on imports within the meaning of Article XI:1.517  
7.98.   The United States argues that during any six -month period, the only horticultural  products 
that are permitted to be imported are those that conform to the products listed on importers' 
original RIPHs and Import Approvals, as issued at the beginning of the semester.518 In the United 
States' view, this means that PIs can only import the sp ecific type of horticultural products from 
the country of origin through the port of entry specified on their RIPHs during the semester.519 
According to the Unites States, once Indonesia issues the RIPHs and Import Approvals for six 
months, importers cannot change the listed specifications or apply to import new or additional 
products and thus, importers cannot take advantage of market opportunities or mitigate risks 
inherent in the global supply chains.520 For the Unites States, these features imply that (i) i mports 
of certain products (those for which no RIPH or Import Approval was granted at the beginning of 
the import period) are effectively banned until the next period; (ii) only a specified quantity of 
each type of product can be imported until the next pe riod; (iii) products from other WTO 
Members are restricted to the amounts originally requested by importers; and (iv) if the original 
port of entry is no longer available or commercially feasible for use, the products cannot enter 
through a different port of entry. Thus, the United States claims that the type, quantity, country of 
origin and port of entry requirements imposed through the RIPHs and Import Approvals are a 
                                                
508 New Zealand 's first written submission, para . 227 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.274).  
509 New Zealand 's first written submission, para . 227. 
510 New Zealand 's second written submission, para . 198. 
511 New Zealand 's second written submission, para . 199. 
512 New Zealand 's second written submission, para . 200. 
513 New Zealand 's second written submission, para . 201. 
514 United States ' first written submission, para. 160.  
515 United States ' first written submission, fn. 295.  
516 United States ' first written submission, para. 161 (referring to Appellate Body Report,  Argentina – 
Import Measures para. 5.217).  
517 United States ' first w ritten submission, para. 160.  
518 United States ' first written submission, para. 163.  
519 United States ' first written submission, para. 163.  
520 United States ' first written submission, para. 163.  WT/DS477/R • WT/DS478/R  
 
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  limitation on importation, a limiting  condition on importation, or have a limiting effec t on 
importation, and constitute a "restriction " within the meaning of Article XI:1.521 
7.99.   The United States further argues that previous panels have found that measures imposing 
limits of this kind are restrictions under Article XI:1. The United States refers to India – Autos , 
where the panel found that a measure that imposed a trade balancing requirement that 
companies' exports be at least equivalent in value to their imports was a restriction contrary to 
Article XI:1 because "an importer [was] not free to imp ort as many restricted kits or components 
as he otherwise might so long as there is a finite limit to the amount of possible exports "522, and to 
Colombia – Ports of Entry , where the panel found that a measure restricting the entry of certain 
textile and appa rel products from Panama to two ports of entry in Colombia was a restriction under 
Article XI:1.523 
7.2.6.1.3   Indonesia  
7.100.   Indonesia argues that the complainants have failed to adequately explain how a 
requirement that importers determine their own terms of importation h as any limiting effect on 
imports.524 Indonesia submits that because the terms of importation such as the type, quantity, 
country of origin, and port of entry are chosen by importers, the licence terms cannot constitute 
"measures that are instituted or maint ained by Indonesia " and therefore Measure  2 falls outside 
the scope of Article XI :1 of the GATT 1994.525 Additionally, Indonesia submits that importers are 
free to alter their terms of importation from one licence application to the next, meaning that the 
"terms" are only static for the duration of one validity period, and that it does not place any 
limitations on the terms identified by importers other than the realization  requirement that exists 
to ensure importers make a reasonable estimate of their antici pated import volumes. Indonesia 
asserts that importers are not required to allocate anticipated import volumes to specific ports of 
entry in their applications, and that it is believed that some importers preserve flexibility by listing 
more ports of entry  than they ultimately use in their import licence applications, with no sanctions 
in place for such behaviour.526 
7.2.6.2   Analysis  by the Panel  
7.101.   The task before the Panel is to establish whether, as claimed by the co -complainants527, 
Measure  2 is inconsistent with Arti cle XI:1 of the GATT  1994 because it constitutes a restriction 
having a limiting effect on import ation of horticultural imports into Indonesia and limits the 
competitive opportunities of importers and imported products . 
7.102.   We begin by noting the co -complainan ts' contention  that Measure  2 constitutes a 
restriction on importation528, and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.529 New Zealand argue d that the components of Indonesia's import 
licensing regime fo r animals, animal products and horticultural products, which include Measure  2, 
constitute prohibitions or restrictions made effective through an "import licence " or, alternatively, 
an "other measure ".530 The United States submit ted that Article XI:1 applies  to any "restriction, " 
including those "made effective through quotas, import or export licenses or other measures ."531 
7.103.   We observe that Indonesia has not contested the co -complainants' characteri zation of 
Measure  2.532 Rather, it has responded that its measure s are outside the scope of Article  XI:1 
because they are automatic import licensing regimes .533 We recall our conclusion in 
                                                
521 United States ' first written submission, para. 164. 
522 United States ' first written submission, para. 166 (referring to Panel Report, India – Autos, 
para. 7.320).  
523 United States ' first written submission, para. 166 (referring to Colombia – Ports of Entry , 
para. 7.274).  
524 Indonesia 's first written submission, para. 1 37. 
525 Indonesia 's first written submission, para. 138.  
526 Indonesia 's first written submission, para. 139; second written submission, para. 168.  
527 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1 -4; New Zealand 's first 
written submi ssion, para. 90; New Zealand 's second written submission, para. 196; United States ' first written 
submission, paras. 52 and 160.  
528 New Zealand 's first written submission, para . 221; United States ' first written submission, para. 160.  
529 New Zealand 's first written submission, para . 284; United States ' first written submission, fn. 295.  
530 New Zealand 's first written submission, para. 284.  
531 United States ' first written submission, para. 142.  
532 Indonesia 's response to Panel question No.  10. 
533 Indonesia 's secon d written submission, para. 165.  WT/DS477/R • WT/DS478/R  
 
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  Section  7.2.3.2.1  above that automatic import licensing procedures do not fall per se  outside the 
scope of Article XI:1 of the GATT 1994. In addition, Indonesia has attempted to exclude Measure  2 
from the scope of this provision by arguing that it is not a measure  "instituted or maintain ed by 
Indonesia " but the result of decisions by private a ctors.534 We refer to Section  7.1.3 above  where 
we concluded that Measure 2 is a measure taken by Indonesia.  Given the description of Measure  2 
in Section 2.3.2.2 above , we concur with the co -complainants in that Measure  2 is not a duty, tax, 
or other charge and it is therefore not excluded explicitly from the scope of Article  XI:1 of the 
GATT  1994.   
7.104.   As with Measure  1535, we proceed to examine whether the co -complainants have 
demonstrated that Meas ure 2 prohibits or restricts trade, rather than examining the means by 
which such prohibition or restriction would be made effective. In doing so, we will determine 
whether  the co-complainant s have demonstrated that Measure  2 has a limiting effect on 
impor tation . To carry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  2, within its relevant context.  
7.105.   As described  in Section 2.3.2.2 above , Measure 2 consist s of the requirement to only 
import horticultural products within the terms of the RIPHs and Import Approvals. These terms 
include the quantity of the products permitted to be imported, the specific type of products 
permitted to be imported, the country of  origin of the products, and the Indonesian port or ports of 
entry through which the products will enter. Such terms cannot be subject to changes during the 
validity period of the relevant RIPH and Import Approval.536 This measure is implemented by 
Indonesia  by means of Article 6 of MOA 86/2013, that regulates the elements of RIPHs ; Article  13 
of MOT 16/2013, as amended, that stipulates the same for the Import Approvals ; and Article  30 of 
MOT 16/2013  as amended by MOT 47/2013  that establishes that when import ed products do not 
coincide with the type of products specified in the Import Approvals and/or in the RI and PI 
designations, they are destroyed (fresh) or re -exported (processed) at the importers' cost.  From 
the text of these regulations, we understand th at the interdiction to amend the terms of the 
granted RIPHs and Import Approvals during their validity period means that importers cannot 
import products of a different type,  in a greater quantity or from another country or through a 
different port than th at specified in the relevant RIPH or Import Approvals.  
7.106.   We observe that Indonesia does not deny that these terms cannot be modified but submits 
that importers are free to alter the terms of importation from one licence application to the 
next.537 In response  to a question from the Panel to clarify the extent to which these terms can be 
effectively modified, Indonesia replied that in case an importer desired to increase the original 
quantity of imports set out in the import documents, such an importer would ha ve two options: 
(i) to submit another application specifying greater quantities, provided that the application 
window is still open and the RIPH has not been issued yet, or (ii)  to submit an application 
specifying a greater quantity during the next applica tion window. Similarly, Indonesia replied that 
if an importer desired to reduce the quantity of its imports below the amount it previously sought 
in its application, such an importer would have two options: (i)  to reduce its imports by up to  20% 
without pe nalty, or (ii)  reduce its imports by more than 20% and risk the imposition of a penalty 
under the old regulations.538  
7.107.   We note that the co-complainants have focused their  argumentation on the operation of 
this Measure, and in particular, its detrimental impa ct on competitive opportunities. They 
contend ed that the operation of the measure, which results from its design, causes a limiting effect 
on importation.539 For instance, New Zealand argue d that by restricting the parameters within 
which importers may impor t products through the import licences, importers have fewer 
opportunities to import horticultural products into Indonesia and that such restrictions have an 
                                                
534 Indonesia 's first written submission, para. 138.  
535 See paragraph  7.76 above.  
536 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand 's first 
written submission, para. 90; United States ' first written submission, para. 52.  
537 Indonesia 's first written submission, para.75. 
538 Indonesia's response to Panel question No.  15. We note that Indonesia mentions that , under 
MOT 71/2015 , the 80 % realizati on requirement has been lifted as to horticultural products, so there is no 
longer any penalty for reducing imports by any amount.  
539 See, for instance, New Zealand 's first written submission, para. 227; New Zealand 's second written 
submission, para. 198; U nited States ' first written submission, para. 164. WT/DS477/R • WT/DS478/R  
 
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  impact on the "competitive opportunities " available to imported products540, with a consequential 
limiting effect on imports, contrary to Article XI:1 of the GATT 1994.541  
7.108.   Similarly, the United States stresse d the detrimental impact of this Measure with respect to 
the competitive opportunities of importers. The United States thus argue d that, once Indones ia 
issues the RIPHs and Import Approvals for a six -month period, importers cannot change the listed 
specifications or apply to import new or additional products and thus cannot take advantage of 
market opportunities or mitigate risks inherent in the global  supply chain.542 For the Unite d States, 
these features of Indonesia's import licensing system imply that (i)  imports of certain products 
(those for which no RIPH or Import Approval w as granted at the beginning of the import period) 
are effectively banned un til the next period; (ii)  only a specified quantity of each type of product 
can be imported until the next period; (iii)  products from other WTO Members are restricted to the 
amounts originally requested by importers; and, (iv)  if the original port of entr y is no longer 
available or commercially feasible for use, the products cannot enter through a different port of 
entry.543  
7.109.   When examining the design, architecture and revealing structure of Measure  2, we observe 
that the various requirements it embodies and  the way in which they interact, have the effect of 
an import quota. Indeed, Measure  2 fixes the amount  and the type of product s that can be 
imported for each validity period, i.e. every six months . This means that , for that six-month 
period, there is a ma ximum quantity of products of a given type that can be imported that cannot 
be modified. We note that, as Indonesia argu ed, the amount of the quota would be set by the 
importers themselves as they are determining the amounts requested  in their Import Appro vals. 
In this sense, the actual amount of the quota is not being determined by Indonesia but rather by 
the actions of the importers. We recall that the fact that private actors are free to make various 
decisions in order to comply with a measure does not p reclude a finding of inconsistency. On the 
contrary, "where private actors are induced or encouraged to take certain decisions because of the 
incentives created by a measure , those  decisions are not 'independent'  of that measure ".544 In the 
present case, the existence of a system which has the effect of creating a quota for every six -
month period can be perceived as the result of the manner in which Indonesia structures this 
measure.  We thus perceive the limiting effect of this Measure in terms of volume of i mports.  
7.110.   We also note that, b y prohibiting changes in  originally specified parameters in the RIPHs 
and the Import Approvals and thus not allowing the importation of  new or additional products 
during the validity period  of these documents or  the change of original port of entry , Measure  2 
provides importers with fewer opportunities to import horticultural products into Indonesia. We 
thus observe that  such restrictions have  an impact on the competitive opportunities available to 
imported products .545 In particul ar, and as claimed by the co -complainants546, we note that this 
Measure removes flexibility from importers to respond to changing market circumstances or 
external factors within a given validity period. Consequently, importers are deterred from taking 
advant age of new market opportunities or from controlling adverse situations that require 
changing importation plans . 
7.111.   If we place Measure  2 in the context of Indonesia's import licensing regime for horticultural 
products, w e concur with New Zealand that, not onl y are these terms fixed for the period of 
validity of th e licence, but Indonesia also limits which terms can be included in the import licence 
through the operation of other components of its import licensing regime for horticultural 
products.547 We thus sha re New Zealand's view that it is not correct to state that Indonesia does 
not place any limitations  on the terms identified because the various legal requirements operate 
together with Measure  2 to place limitations on the terms identified in the import li cences ,548 for 
instance, with Measure  4 (harvest period requirements). W e also observe that  the limiting effects 
of the fixed terms imposed by Measure 2 are enhanced by its interaction with Measure  3 
                                                
540 New Zealand 's first written submission, para . 227 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.274).  
541 New Zealand 's first written submission, para . 227. 
542 United States ' first written submission, para. 163.  
543 United States ' first written submission, para. 164. 
544 Appellate Body Report, US – COOL , para. 291. (emphasis original)  
545 New Zealand 's first written submission, para . 227 (referring to Panel Report, Colombia – Ports of 
Entry , para . 7.274).  
546 New Zealand's first written submission, para. 224; second written submission, para. 197; United 
States ' first written submission, para. 163.  
547 New Zealand 's second written submission, para . 198. 
548 New Zealand 's second written submission, para . 199. WT/DS477/R • WT/DS478/R  
 
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  (80%  realization requirement) and Measure  5 (the storage o wnership and capacity requirements) 
by taking away flexibility from importers to respond to changing circumstances.  
7.2.6.3   Conclu sion 
7.112.   For the reasons stated above, we find that Measure  2 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of it s design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.7   Whether Measure  3 (80% realization  requireme nt) is inconsistent with 
Article  XI:1 of the GATT  1994  
7.2.7.1   Arguments of the parties  
7.2.7.1.1   New Zealand  
7.113.   New Zealand claims that the effect of the 80% realization  requirement is to limit the 
amount of imports that importers request in their horticulture import licences because it induces 
importers to self -limit the quantity of imp orts they request in their hort iculture import licences and 
that this is inconsistent with Article XI:1 of the GATT 1994 as it has a limiting effect on imports.549 
New Zealand argues that RIs are prohibited from importing horticultural products in subsequent 
validity periods if they fail to import at least 80% of the quantity of each type of product specified 
on their Import Approval550, and that importers must submit an Import Realization  Control Card 
every month to demonstrate compliance with this requirement.551 New Zealand submits that 
importers have a strong incentive to comply with the 80% realization  requirement due to the 
severe consequences of non -compliance and the risk of effectively being prevented from operating 
their business es. New Zealand maintains that importers respond by cons ervatively estimating, or 
underestimating, the quantities requested in their import licences in order to ensure they are able 
to satisfy the 80% realization  requirement.552 New Ze aland sustains that as a result  40 
horticultural importers, 24% of the total nu mber of horticultural importers, had their licences to 
import fresh horticultural products suspended in 2015 for two years.553 
7.114.   New Zealand also contends that the limiting effect of the 80% realization  requirement is 
exacerbated when combined with Measure  2 because certain import terms, such as the quantity, 
product type, port of entry and country of origin are locked in prior to the commencement of a 
validity period. In turn, this limits the flexibility availa ble to importers to satisfy the  80% 
realization  requirement.554 New Zealand submits that the design and structure of this measure 
acts as a "limitation on action, a limiting condition " and therefore, as the Appellate Body in 
Argentina – Import Measures  and China – Raw Materials  found, is a restriction withi n the meaning 
of Article  XI:1.555  
7.2.7.1.2   United States  
7.115.   The United States claims that the requirement that RIs import, or "realize ", at least 80% of 
the quantity specified for each type of horticultural product on their Import Approval for the 
semester is a restric tion within the meaning of Article XI:1 and is therefore inconsistent with 
Article XI:1 of the GATT 1994.556 Additionally, the United States claims that this requirement is not 
a duty, tax, or other charge, and, therefore, is within the scope of Article XI:1 .557 The 
United  States argues that, for each semester, Indonesia requires each RI to import at least 80% of 
the quantity specified for each type of horticultural product listed on its Import Approval.558 
                                                
549 New Zealand 's first written submission, paras. 228 and 236.  
550 New Zealand 's first written submission, para . 228 (referring to Article 14A, MOT 16/2013  as 
amended by MOT 47/2013 , Exhibit JE -10).  
551 New Zealand 's first written submission, para . 228. 
552 New Zealand 's first written submission, para . 232 (referring to Onions New Zealand Exporter 
Statement, Exhibit NZL -49; Pip Fruit New  Zealand Export Statement, Exhibit NZL -50; and ASEIBSSINDO 
Statement, Exhibit NZL -53); second written submission, para. 20 9. 
553 New Zealand 's second written submission, para . 209. 
554 New Zealand 's first written submission, para . 233. 
555 New Zealand 's first written submission, para . 234 (referring to Appellate Body Report, Argentina – 
Import Measures  and to Appellate Body Report,  China – Raw Materials ). 
556 United States ' first written submission, para. 168; second written submission, para. 19 . 
557 United States ' first written submission, fn. 306.  
558 United States ' first written submission, para. 170.   WT/DS477/R • WT/DS478/R  
 
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  Further, to monitor compliance, Indonesia requires each RI to submit monthly its Import 
Realization  Control Card, which accounts for the quantity of realized imports.559 The United States 
submits that according to Indonesia's legislation, an RI  that fails to meet the 80% realization  
requirement or fails to file t he Import Realization  Control Card may have its RI designation 
suspended.560 In the United States' view, each RI must lower the quantity it requests in its Import 
Approval application to less than the amount it would otherwise request in order to mitigate th is 
risk.561  
7.116.   The United States also argues that RIs are concerned by the price depressing effects of an 
over-supply of the market at the end of the period, due to  importers' efforts to meet the  80% 
realization  requirement.562 The United States contends that th is problem is more acute in the case 
of chillies  and shallots since the reference price requirement for these products makes importing 
large quantities during short periods of time to comply with the realization  requirement even 
riskier, possibly causing p rices to drop below the reference prices and cutting off imports 
altogether.563 For the United States, the realization  requir ement is a limitation or limiting condition 
on importation, or has a limiting effect on importation since the importer is subjected t o the 
requirement as a condition for receiving permission to import, and failure to comply may result in 
ineligibility to import in a future period.564  
7.117.   The United States sustains that previous panels have found that measures imposing limits 
of this kind are  restrictions under Article XI.565 The United States argues that the panel in India – 
Autos  found that a measure imposing a requirement that importers balance the value of imported 
auto kits and components with the value of their exports from India566 had a li miting effect and 
was thus a "restriction " under Article XI:1. In concluding this, the United States sustains that the 
panel found that the measure did not set an "absolute numerical limit, " but "induced [an importer] 
. . . to limit its imports of the rele vant products " in relation to the importers' "concern[] about its 
ability to export profitably. "567 The United States claims that si milar to that case, Indonesia's  80% 
realization  requirement causes importers to limit the amount that they request in their im port 
approval applications, which, in turn, restricts the quantity of products they are allowed to 
import.568 
7.118.   The United States argues that the co -complainants have also presented evidence 
demonstrating that the realization  requirements have had an adverse i mpact on imports, including 
statements by several US exporters attesting to the fact that the realization  requirement causes 
importers "to be conservative in their applications, " that is, to "apply for less than if they did not 
have to worry about meeting 80% of their quota "569, and a statement by the Indonesian 
association of horticultural product importers (ASEIBSSINDO), confirming that importers’ fear of 
not being able to meet the realization  requirement has caused them to be "conservative in the 
amounts t hey apply for to make sure they will be able to meet the 80% rule and so avoid 
sanctions. "570 The United States contends that this evidence is not "anecdotal conjecture ".571   
7.2.7.1.3   Indonesia  
7.119.   Indonesia argues that the realization  requirement does not constitute a re striction within 
the meaning of Article XI:1 of the GATT 1994.572 According to Indonesia, the co -complainants' 
                                                
559 United States ' first written su bmission, para. 170.  
560 United States ' first written submission, para. 170.  
561 United States ' first written submission, para s. 171 -173; second written submission, para. 19.  
562 United States ' first written submission, para. 171 (referring to Exhibit USA -21). 
563 United States ' first written submission, para. 172.  
564 United States ' first written submission, para. 175.  
565 United States ' first written submission, para. 176 (referring to the Panel Report, India – Autos, 
para. 7.268 and Panel Report, Argentina – Import  Measures , para. 6.256).  
566 United States ' first written submission, para. 176 (referring to the Panel Report  India – Autos , 
para. 7.268).  
567 United States ' first written submission, para. 176 (referring to the Panel Report  India – Autos , 
para. 7.268).  
568 United States ' first written submission, para. 176.  
569 United States ' second written submission, para. 20.  
570 United States ' second written submission, para. 20.  
571 United States ' second written submission, para. 21.  
572 Indonesia 's first written submission, para.  144. WT/DS477/R • WT/DS478/R  
 
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  argument is based on "nothing more than anecdotal conjecture ", and they have not presented any 
evidence that the realization  requirement has had an  adverse impact on trade flows.573 
7.120.   Indonesia argues that the realization  requirement serves as a safeguard against importers 
grossly overstating their anticipated imports and , since Indonesia is a developing country with 
limited resources to devote to import  administration, having estimates of expected trade volumes 
for each validity period is important. Indonesia contends this measure is not meant to constrain 
imports and that there is no upward limit to the amount an importer can import in a given validity 
period. Indonesia asserts that it understands the need for flexibility in the estimates and thus that 
the realization  requirement is specifically fixed at 80% to allow for a margin of error. Indonesia 
further asserts that this requirement strikes a balance  between incentivizing importers to provide 
realistic estimates of anticipated imports and allowing a margin of error before penalties are 
applied.574 Indonesia contends that, in any event, the penalties applied are reasonable, as there is 
only a two-term su spension of an importer's designation as RI. Indonesia submits that the 
realization  requirement is "fair, balanced and narrowly constructed " to further the legitimate 
objective of maintaining "administrative efficiency ".575 
7.121.   Indonesia submits that the complai nants have speculated that extreme volatility in the 
global supply chain would result in an importer losing its RI designation through no fault of its 
own, but that they have been unable to point to a single instance in which a "catastrophic supply 
chain e vent" has caused an importer to fall below the 80% realization  requirement and 
subsequently lose its importer designation. Indonesia also submits that the complainants have 
failed to demonstrate that imports as a whole have decreased as a result of the realization  
requirement.576 Indonesia further  submits  that MOT 5/2016 , for animals and animals products, 
and MOT 71/2015 , for horticultural products, have eliminated the 80% realization  requirement and 
that it is no longer in effect in Ind onesia.577 
7.2.7.2   Analysis by t he Panel  
7.122.   The task before the Panel is to establish whether, as claimed by the co -complainants578, 
Measure 3 is inconsistent with Article XI:1 of the GATT  1994 because it constitutes a restriction 
having a limiting effect on import ation of horticultural impor ts into Indonesia. In particular, we are 
to determine whether Measure  3 compels importers to limit their imports by inducing them to 
reduce the amounts they request in their Import Approvals  to elude the established penalties.  
7.123.   We commence by observing th at the co -complainants argue d that Measure 3 constitutes a 
restriction on importation579, and that it is not a duty, tax, or other charge, and is therefore within 
the scope of Article XI:1.580 New Zealand further argue d that the components of Indonesia's 
impor t licensing regime for animals, animal products and horticultural products, which include 
Measure  3, constitute prohibitions or restrictions made effective through an "import licence " or, 
alternatively, an "other measure ".581 The United States submit ted that Article XI:1 applies to any 
"restriction, " including those "made effective through quotas, import or export licenses or other 
measures ".582 
7.124.   We observe that Indonesia has not contested the co -complainants' characteri zation of 
Measure  3.583 Rather, it has respo nded that its measures a re outside the scope of Article  XI:1 
because they are automatic import licensing regimes.584 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedure s do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  3 in Section 2.3.2.3 
above , we concur with the co -complainants in that Measure  3 is not a duty, tax, or other charge 
and it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
                                                
573 Indonesia 's first written submission, para. 141; second written submission, para. 172.  
574 Indonesia 's first written submission, para. 142; second written submission, para. 173.  
575 Indonesia 's first written submission, para. 142; second written submis sion, para. 174.  
576 Indonesia 's first written submission, para. 143.  
577 Indonesia 's second written submission, para. 176; Indonesia 's responses to Panel question No. 15, 
para. 10.  
578 New Zealand 's first written submission, para. 232; United States ' first writ ten submission, para. 168.  
579 New Zealand's first written submission, para. 234; United States' first written submission, para.  168. 
580 New Zealand's first written submission, para. 284; United States' first written submission, fn.  283. 
581 New Zealand 's first written submission, para. 284.  
582 United States ' first written submission, para. 142.  
583 Indonesia 's response to Panel question No.  10. 
584 Indonesia 's second written submission, para. 165. WT/DS477/R • WT/DS478/R  
 
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  7.125.   As with the previous measures585, we proceed to examine whether the co -complainants 
have demonstrated that Measure  3 prohibits or restricts trade, rather than examini ng the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure  3 has a limiting effect on 
importation . To carry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  3, within its relevant context.   
7.126.   As described Section 2.3.2.3 above , Measure  3 consists of the requirement that RIs of 
fresh horticultural prod ucts must import 80% of the quantity  of each type of product specified on 
their Import Approvals for every six -month validity period.586 This measure is implemented by 
Indonesia through Articles  14A, 24, 25A and 26  and 27A  of MOT 16/2013, as amended by MOT 
47/2013.  Under Articles 25A and 26 of MOT 16/2013, as amended by MOT 47/2013, t he Ministry 
of Trade sanctions RIs that fail to meet the 80% realization  requirement and sanctions both RIs 
and PIs who fail to file the Import Realization  Control Card by suspen ding their designations. For 
example, an RI that fails to file the Import Realization  Control Card three times could have its 
designation revoked.  
7.127.   We observe that central to the co -complain ants' argumentation is the  alleged  limiting 
effect on importation  as a result of the incentives created by the 80% realization  requirement. 
New Zealand thus argue d that the design and structure of the 80% realization  requirement acts as 
a "limitation on action, a limiting condition ".587 In its view, importers have a strong incentive to 
comply with the 80% realization  requirement because the consequences of failing to comply with it 
are severe and result in an importer being effectively prevented from operating its business. For 
New Zealand, importers respond by conservativel y estimating, or underestimating, the quantities 
requested in their import licences to ensure they are able to satisfy the 80% realization  
requirement.588  
7.128.   Likewise, the United States submit ted that each RI must lower the quantity it requests in 
its Import A pproval application to less than the amount it would otherwise request to mitigate this 
risk of non -compliance with the  80% realization  requirement.589 For the United States, RIs are 
concerned about the price depressing effects of an over -supplied market at the end of the period 
due to a number of importers trying to meet the 80% realization  requirement, meaning decreased 
profitability .590 We note the United States contend ed that this problem is more acute  in the case of 
chillies  and shallots because  the refere nce price requirement makes importing large quantities 
during short periods of time to comply with the realization  requirement even riskier, possibly 
causing the prices of chillies  and shallots to drop below the reference prices and cutting off imports 
altogether.591  
7.129.   Looking at  the design, architecture  and revealing structure of this Measure, we note that it 
does not per se limit the quantity of imports of horticultural products that can enter  Indonesia.  
Certainly, Measure 3 requires importers to effectively  import a large percentage of the amounts 
requested in their applications for Import Approvals but does not create an outright prohibition on 
the importation of horticultural products.  This Measure nonetheless includes enforcement rules 
which provide for s evere penalt ies for not complying with the 80% realization  requirement . 
Indeed, pursuant to Article  26 of MOT 16/2013, as a mended, non -compliance with the  80% 
realization requirement can lead to the revocation of an importer's RI  designation, with a 
possib ility of reapplication not earlier than two years from the date of revocation.592 By its very 
nature, the possibility of experiencing severe penalties, which may mean the loss of the importer's 
commercial livelihood, reasonably constitutes an incentive for i mporters to comply with the  80% 
realization requirement. As argued by the co -complainants593, it is reasonable to conclude that the 
                                                
585 See for instance, paragraph  7.76 above.  
586 New Zealand's Panel Request , pp. 1-4; United States' Panel Request,  pp. 1-4; New Zealand 's first 
written submission, para. 92; United States ' first written submission, para. 56.  
587 New Zealand 's first written submission, para. 234  (referring to Appellate Body Report, Argentina – 
Import Measures  and to Appellate Body Report, China – Raw Materials ). 
588 New Zealand 's first written submission, para. 2 32 (referring to Onions New Zealand Exporter 
Statement, Exhibit NZL -49; Pip Fruit New  Zealand Export Statement, Exhibit NZL -50); and ASEIBSSINDO 
Statement, Exhibit NZL -53); second written submission, para. 209.  
589 United States ' first written submission, para s. 171-173. 
590 United States ' first written submission, para. 171  (referring to Exhibit U SA-21). 
591 United States ' first written submission, para. 172.  
592 Article 27A, MOT 16/2013, as amended, Exhibit JE -10. 
593 New Zealand 's first written submission, para . 232 (referring to Onions New Zealand Exporter 
Statement, Exhibit NZL -49; Pip Fruit New  Zealand Export Statement, Exhibit NZL -50); and ASEIBSSINDO 
Statement, Exhibit NZL -53); second written submission, para. 209; United States ' first written submission, WT/DS477/R • WT/DS478/R  
 
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  prospect of having their RI  designation revoked and therefore not being able to import products for 
at least two years is a po werful enough incentive to induce importers to conservatively estimate or 
underestimate their desired import quantities  to ensu re they are able to satisfy the  80% 
realization  requirement.   
7.130.   We observe that the effect of this measure may vary depending on th e importer's 
situation; in particular, on its projections of how many horticultural products it expects to sell and 
import in a given period of time, its competitive situation, market conditions and how risk -averse 
the importer might be. Accordingly, an im porter who is confident that the demand for its products 
will not significantly change over the validity period of an Import Approval or who is a risk-taker 
might not be incentivized to reduce the quantities it requests to a great extent. The situation wil l 
differ where the importer expects demand and prices to be volatile or is risk -averse and therefore 
does not want to request a quantity that it may not be able to import without failing to comply 
with the 80% requirement. Nonetheless, we believe that in b oth cases, though there might be a 
difference in the degree that Measure  3 affects the importers' decision of how much to request in 
their Import Approvals, any importer will be induced to be more conservative in its estimations. In 
our view, this Measure exacerbates the risks inherent in conducting trade transactions. We thus 
consider that the design, architecture and revealing structure of Measure  3 shows that this 
measure has a limiting effect in terms of volume of imports of horticultural products into 
Indonesia.  
7.131.   When we examine  Measure  3 in the context  of Indonesia's Import licensing regime for 
horticultural products , we note that, as New Zealand explains594, the limiting effect of the 
80% realization  requirement appears to be  "exacerbated " when combined  with Measure  2. We 
recall that Measure  2 consists of the requirement to only import horticultural products within the 
terms of the RIPHs and Import Approvals. Given that  certain import terms, such as the quantity, 
product type, port of entry, and country of origin are set prior to the commencement of a validity 
period  and cannot be changed during that validity period,  the flexibility available to importers to 
satisfy the 80% realization  requirement  by perhaps changing the type of products, the country of 
origin or the port of entry, gets further reduced . As noted in paragraph  7.128  above in relation to 
the price effects emphasized by the United  States, the limiting effect of Measure  3 can be 
perceived as also being exacerbated w hen combined with Measure  7 relating  to the importation of 
chillies  and shallots. As the United States explains, one can reasonably understand that the 
existence of the reference price requirement may make importing large quantities during short 
periods of  time to satisfy  the realization  requirement even riskier  because it may result in the 
prices of chillies  and shallo ts dropping below the reference p rice. As we explain in Section 2.3.2.3 
above , this would mean the suspensio n of imports altogether . 
7.132.   We observe that Indonesia has argue d that the co -complainants have not presented any 
evidence that the realization  requirement has had an adverse impact on trade flows.595 As 
explained in Section  7.2.3. 2.2 above , the limitation on imports "need not be demonstrated by 
quantifying the effects of the measure at issue ".596 Nonetheless, the evidence on the record further 
confirms the limiting effect of this Measure. For instance , a number of US exporters attes ts that 
the realization  requirement causes importers "to be conservative in their applications ", since they 
"don’t have crystal balls – they don 't know what is going to happen in the market – so they apply 
for less than they would normally ask for ", that is, they "apply for less than if they did not have to 
worry about meeting 80% of their quota ".597 The co -complainants also refer to a statement by the 
ASEIBSSINDO, indicating that importers’ fear of not being able to meet the realization  requirement 
has cause d them to be "conservative in the amounts they apply to import to make sur e they will 
be able to meet the  80% rule and so avoid sanctions ".598  
7.133.   Finally, we observe the similarity of Measure 3 with the measures examined by the panel 
in India – Autos . This pan el found that a measure that did not set an absolute numerical limit on 
imports but induced importers to limit their imports as a consequence of the obligation to satisfy 
an export commitment imposed by India599 amounted to an import restriction, where the d egree of 
                                                                                                                                                  
para. 173. United States ' first written submission, para. 171 (referring to MOT 16/2013, as am ended by 
MOT 47/2013, article 14A, Exhibit JE -10). 
594 New Zealand 's first written submission, para . 233. 
595 Indonesia 's first written submission, para. 141; second written submission, para. 172.  
596 Appellate Body Report, Argentina – Import Measures , para. 5.2 17 (referring to the Appellate Body 
Reports, China – Raw Materials , para s. 319-320).  
597 Exhibit USA-21. 
598 Exhibit USA -28 and NZL -53. 
599 Panel Report, India – Autos , para. 7.268.  WT/DS477/R • WT/DS478/R  
 
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  effective restriction resulting from the measure varied from signatory to signatory depending on 
several factors. For the panel in that dispute, a manufacturer was in no instance free to import, 
without commercial constraint, as many products as i t wished without regard to its export 
opportunities and obligations.600 The 80% realization requirement acts in a similar way by 
incentivizing  importers to limit the amount that they request in their import approval applications, 
which, in turn, restricts th e quantity of products they are allowed to import.   
7.2.7.3   Conclu sion 
7.134.   For the reasons stated above, we find that Measure  3 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.8   Whether Measure  4 (Harvest period requirement ) is inconsistent with Article  XI:1 
of the GATT 1994  
7.2.8.1   Arguments of the parties  
7.2.8.1.1   New Zealand  
7.135.   New Zealand claims that as a prohibition or restriction on the impor t of horticultural 
products, the Indonesian harvest period requirement is a quantitative restriction prohibited by 
Article XI:1 of the GATT 1994.601 New Zealand submits that Indonesia's import licensing regime 
prohibits the importation of certain horticultur al products over the Indonesian harvest period by 
withholding or limiting RIPHs over those periods.602 New Zealand argues that prohibitions and 
restrictions that have a limiting effect on imports through restricting the ability of imported 
products to compet e in the domestic marketplace, have been considered by panels to be 
inconsistent with Article XI:1.603  
7.136.   New Zealand claims that the importation of horticultural products is restricted to periods 
outside the pre -harvest, harvest and post -harvest season for th ose same products in Indonesia. 
According to New Zealand, the Indonesian Ministry of Agriculture issues RIPHs for the importation 
of fresh horticultural products for direct consumption and, as part of the application process for an 
RIPH, an RI  is required to submit a plan for distribution of the imported products by time and 
region/municipality. The Ministry of Agriculture withholds or limits the quantities approved in an 
RIPH based on pre -harvest, harvest and post -harvest periods of Indonesian production o f 
horticultural products.604 New Zealand claims that in early May 2015, the Ministry of Agriculture 
indicated that for the second half of 2015, imports of certain products should be restricted due to 
Indonesian production over the same period605 and that the M inistry of Agriculture recommended 
that no shallot, chil li, mango, banana, melon, papaya or pineapple imports should take place and 
that imports of oranges and mandarin oranges be limited to the period October to December.606 
New Zealand also points  to repo rts on Indonesian fruit impo rts confirming that in late May  2015, 
the Ministry of Agriculture intended to ban citrus imports (except for lemons) between the harvest 
period from July and September.607  
7.137.   Responding to Indonesia's arguments, New Zealand contends  that Indonesia does not 
even attempt to argue that its limitation of imports during periods of domestic harvest is not a 
"restriction " within the meaning of Article XI:1 of the GATT 1994, but rather, that it seeks to rely 
only on a defence under Article X X(b).608 
                                                
600 Panel Report, India – Autos , para. 7.277.  
601 New Zealand 's first written submis sion, para . 242. 
602 New Zealand 's first written submission, para . 241. 
603 New Zealand 's first written submission, para . 242 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.236).  
604 New Zealand 's first written submission, para . 238 (referring to  Article 5(2), MOA 86/2013  , 
Exhibit  JE-15). 
605 New Zealand 's first written submission, para . 238 (referring to Prohibition/Limitation Letter from the 
MOA, Exhibit NZL -39). 
606 New Zealand 's first written submission, para . 238. 
607 New Zealand 's first written s ubmission, para . 239 (referring to "Indonesia 's citrus importers under 
threat " Asiafruit,  27 May 2015, (Exhibit NZL -74) and " Growers left to find a market  as Indonesia turns away 
citrus"  NewsMail,  17 July 2015, (Exhibit NZL -75). 
608 New Zealand 's second writ ten submission, para . 221. WT/DS477/R • WT/DS478/R  
 
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  7.2.8.1.2   United States  
7.138.   The United States claims that Indonesia restricts the importation of horticultural products 
based on the Indonesian harvest periods for the same domestic products and that this limitation is 
a restriction on importation inconsistent wi th Article XI:1 of the GATT 1994.609 The United States 
also claims that this requirement is not a duty, tax or other charge, and, therefore, is within the 
scope of Article XI:1.610 The United States argues that the harvest period requirement is a 
limitation, o r limiting condition on importation, or has a limiting effect on importation since 
through the RIPH application process, Indonesia limits the importation of certain horticultural 
products during the harvest season for the same domestic products.611 According  to the United 
States, under MOA  86/2013, the Ministry of Agriculture establishes periods of time within each 
semester during which it restricts or prohibits the importation of certain horticultural products to 
protect the same domestic products during the ir harvest periods.612 The United States submits  
that the Ministry of Agriculture requires an RI to submit its plan as to when and where it intends to 
distribute the imported horticultural products during each semester613, and that based on this 
information, t he Ministry limits the importation of horticultural products with respect to domestic 
harvest periods through the RIPH process.614  
7.139.   The United States submits  that Indonesia's import data for the relevant horticultural 
products points to the effects of Indone sia's restrictions based on harvest periods. The 
United  States argues that, for example, Indonesia imported ap proximately 980,000 kilograms of 
mangoes in 2011 and 1 million kilograms in 2012615 but that the import quantity fell precipitously 
after the promul gation of MOA  86/2013 to 119,000 kilograms in 2013 and to 233,466 kilograms in 
2014. The U nited States also argues that there was no importation of mangoes from January to 
August of 2013 and from June to December of 2014616 and that import data for other cov ered 
horticultural products such as bananas, durians, melons, and pineapples followed a similar 
pattern.617 The United States contends that in late 2015, the Ministry of Agriculture shared with 
importers its plans for seasonal restrictions in 2016618, which in cluded a complete yearly ban on 
shallots, chillies , bananas, pineapples, mangoes, melons, and papayas.619 In addition, the United 
States submits that carrots are restricted to 15% of demand, durian is allowed for only three 
months, and oranges and onions are  allowed for only six months.620 Furthermore, in 2015, the 
Ministry of Agriculture did not issue permits for importation of any citrus fruits except lemons from 
July to September.621  
7.140.   The United States recall s that the panel in Turkey – Rice examined, in the c ontext of 
Article  4.2 of the Agreement on Agriculture, Turkey's suspension of issuing import permits during 
local harvest periods to ensure the absorption of local rice production .622 That panel  found that 
such measure "restricted the importation of rice for  periods of time " and was thus a quantitative 
import restriction.623 The United States argues that, similarly, Indonesia's requirement based on 
the Indonesian harvest periods imposes a limitation on imported horticultural products, and has a 
limiting effect on import  quanti ties allowed into Indonesia.624 For the United States, the restrictive 
                                                
609 United States ' first written submission, para. 178.  
610 United States ' first written submission, fn. 319.  
611 United States ' first written submission, para. 179.  
612 United States ' first written submission, para. 180; second written submission, para. 22.  
613 United States ' first written submission, para. 180 (referring to Article 8(2)(e) of MOA 86/2013 , 
Exhibit JE -15, and RI Notification of Distribution Plan to Ministry of Agriculture, May 2015, Exhibit USA -24); 
second written submissio n, para. 22.  
614 United States ' first written submission, para. 180.  
615 United States ' first written submission, para. 182 (referring to "Query: Importation of Mangoes, from 
2011-2015, Monthly, " BPS – Statistics Indonesia, Exhibit USA -51). 
616 United States ' first written submission, para. 182 (referring to "Query: Importation of Mangoes, from 
2011-2015, Monthly ," BPS – Statistics Indonesia , Exhibit USA -51).  
617 United States ' first written submission, para. 182; second written submission, para. 23.  
618 United Stat es' second written submission, para. 23 (referring to Exhibit USA -91). 
619 United States ' second written submission, para. 23 (referring to Exhibit USA -91). 
620 United States ' second written submission, para. 23 (referring to Exhibits USA-91 and USA-92). 
621 United States ' second written submission, para. 23 (referring to Exhibits USA-27, USA-92 and 
USA 93). 
622 United States ' first written submission, para. 180 (referring to Panel Report, Turkey – Rice, 
para. 7.113).  
623 United States ' first written submission, par a. 180 (referring to Panel Report, Turkey – Rice, 
para. 7.121).   
624 United States ' first written submission, para. 184.  WT/DS477/R • WT/DS478/R  
 
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  effect of this measure is clear from its text, structure and operation, and given the scope of the 
authority given to the Ministry of Agriculture by Indonesia’s laws.625 
7.2.8.1.3   Indonesia  
7.141.   Indonesia claims that this measure is excepted from the disciplines of Article XI:1 because 
it is necessary to protect human, animal, or plant life or health in accordance with Article XX(b) of 
the GATT 1994.626 Indonesia argues that oversupply of fre sh horticultural products in a particular 
region of Indonesia's vast archipelago could have "disastrous consequences " as the equatorial 
climate accelerates the  decomposition of fresh horticultural products , posing a serious health 
concern due to the sprea d of certain pathogenic bacteria from rotten produce. Indonesia argues 
that in the absence of coordination of imports with domestic harvest times, stockpiles of rotting 
fresh horticultural products are likely to cause serious public health threats. For Ind onesia, in 
ensurin g that imports are re -directed during domestic harvest periods, it is taking a proactive 
approach to protecting its population from disease.627 For Indonesia, therefore, this measure is 
necessary to ensure food safety.628  
7.142.   Indonesia confirms that, pursuant to Article 5 (1) of MOA 86/2013, imports are made 
during the specified periods which are outside the period of pre -harvest, harvest time and post -
harvest, adding that imports are not banned but only regulated in terms of timing when to enter  
the Indonesian territory.629 In response to Panel question No. 17, Indonesia also clarifies that, the 
Ministry of Agriculture keeps the business community abreast of its decisions in this respect, 
through reports published by the Agency for Food Security, a s well as before t he start of each 
application window. The Ministry of Trade "gives effect " to the time period  set by the Ministry of 
Agriculture by issuing Import Approvals accordingly. The Ministry of Agriculture also "guarantees 
that all RIPHs that are submitted for Import Approval comply with the specified time period  by 
working with importers at the RIPH application stage to ensure they exclude the specified time 
period  from their licen ce requests ".630  
7.143.   In addition, Indonesia submits that this measure ca n also be justified under Article  XI:2 (c) 
(ii) to remove a temporary surplus.631 According to Indonesia, the intention is to prevent 
oversupply of only certain fresh horticultural products that could have disastrous consequences. 
Indonesia explains that, gi ven its location, it has always been an agricultural country and most of 
its citizens engage in farming for a living. While almost each province in Indonesia has its own 
production of chillies  and shallots, Indonesia is also the centre of other fresh horti cultural products 
like mango s, durian s, potatoes, carrots, bananas, papayas, pineapple s and melon s, which are 
produced throughout every provinces in Indonesia. Indonesia contends that this means that, in 
certain periods of time, a particular agricultural p roduct is abundant in Indonesia.632 
7.2.8.2   Analysis by the Panel  
7.144.   The task before the Panel is to establish whether, as the co -complainants claim633, 
Measure  4 constitutes a prohibition or restriction having a limiting effect on importation 
inconsistent with Article X I:1 of the GATT 1994. In particular, we are to determine whether 
Measure  4 prohibits the importation of certain horticultural products at times which relate to 
Indonesia's own harvesting period for the same type of horticultural products.  
7.145.   We commence by noting that the co -complainants argue d that Measure 4 constitutes a 
prohibition or restriction on importation634, and that it is not a duty, tax, or other charge, and is 
therefore within the scope of Article XI:1.635 New Zealand further argue d that the componen ts of 
Indonesia's import licensing regime for animals, animal products and horticultural products, which 
include Measure  4, constitute prohibitions or restrictions made effective through an "import 
                                                
625 United States ' second written submission, para. 24.  
626 Indonesia 's first written submission, para. 150.  
627 Indonesia 's first written subm ission, para. 155.  
628 Indonesia 's first written submission, para. 201.  
629 Indonesia 's response to Panel question No.  33, para. 21.  
630 Indonesia 's response to Panel question No.  17. 
631 Indonesia 's second written submission, para.  203. 
632 Indonesia 's second writt en submission, para.  255. 
633 New Zealand 's first written submission, para . 242; United States ' first written submission, para. 178.  
634 New Zealand 's first written submission, para . 242; United States ' first written submission, para. 178.  
635 New Zealand 's first written submission, para . 284; United States ' first written submission, fn. 319.  WT/DS477/R • WT/DS478/R  
 
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  licence " or, alternatively, an "other measure ".636 The Unite d States submit ted that Article  XI:1 
applies to any "restriction, " including those "made effective through quotas, import or export 
licenses or other measures ".637 
7.146.   We observe that Indonesia has not contested the co -complainants' characteri zation of 
Measure  4.638 Rather, it has responded that its measures are outside the scope of Article XI:1 
because they are automatic import licensing regimes.639 We recall our conclusion in 
Sectio n 7.2.3.2.1  above whereby automatic imp ort licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  4 in Section  2.3.2.4 
above , we concur with the co -complainants that Measure  4 is not a duty, tax, or other charge and 
that it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.147.   As with the previous measures640, we proceed to examine whether the co -complainants 
have demonstrated that Measure  4 prohibit s or restricts trade, rather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure  4 has a limiting effect on 
importation . To car ry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  4, within its relevant context.   
7.148.   As described  in Section 2.3.2.4 above , Measure  4 consists of the requ irement that the 
importation of horticulture products takes place prior to, during and after the respective domestic 
harvest seasons within a certain time period .641 Indonesia implements this measure mainly by 
means of Articles 5 and 8 of MOA  86/2013.  Pursua nt to these provisions, importation of 
horticultural products can only take place prior to , during  and after the harvest season, within  a 
certain time  period established by the Indonesian authorities. The time period  requirements do not 
place limits on the  quantity of products that importers can import within a given validity period, 
but rather when  they are able to import such products, thus prohibiting imports outside the time 
periods decided by the Ministry of Agriculture.642 In establishing the time perio ds, the Ministry of 
Agriculture is guided by the objectives and determinations made by the Food Security Council643 
which are later published as part of Indonesia's five -year Development Plans. The Ministry of 
Agriculture communicates its specified time peri ods to the business community before the start of 
each application window, notifying officially the Ministry of Trade at the same time. The Ministry of 
Trade may be consulted prior to the official adoption of a validity period. In turn, the Ministry of 
Trade gives effect to the specified time periods set by the Ministry of Agriculture by issuing Import 
Approvals in accordance with the specified time period .644 
7.149.   As described above, Indonesia has designed Measure  4 through the operation of the RIPH 
system. Accor dingly, Indonesia control s the importation of certain horticultural products over the 
Indonesian harvest period for the same type of products by withholding or limiting RIPHs over 
those periods.645 In practice, Indonesia would be prohibiting or restricting t he importation of 
certain products depending on a decision from the authorities which is linked to the domestic 
harvesting period of the same domestic product. This also seems to be the understanding of the 
co-complainants. New Zealand, for instance, argue s that Indonesia prohibits the importation of 
certain horticultural products over the Indonesian harvest period by withholding or limiting RIPHs 
over those periods646 and thus restricting the ability of imported products to compete in the 
domestic marketplac e.647  
7.150.   Indonesia does not seem to contest that Measure  4 results in temporary limitations on 
importation. Indeed, Indonesia, apart from raising defences under Article s XX and XI:2(c)(ii), has 
merely argued that the co -complainants ha ve not demonstrated that its temporary limitations on 
                                                
636 New Zealand 's first written submission, para. 284.  
637 United States ' first written submission, para. 142.  
638 Indonesia 's response to Panel question No.  10. 
639 Indonesia 's second written submission, para. 165.  
640 See, for instance, paragraph  7.76 above.  
641 New Zealand 's Panel Request, pp. 1 -4; United States ' Panel Request, pp. 1 -4; New  Zealand 's first 
written submission, paras. 95 -96; United  States ' first written submission, para. 60.  
642 Indonesia 's response to Panel question No.  34. 
643 Indonesia 's response to Panel questions No.  18 and 34.  
644 Indonesia 's response to Panel question No.  34. 
645 New Zealand 's first written submission, para . 241. 
646 New Zealand 's first written submission, para . 241. 
647 New Zealand 's first written submission, para . 242. WT/DS477/R • WT/DS478/R  
 
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  imports for specific periods during the year have had a limiting effect on imports.648 We note that , 
for clarification purposes,  the Panel ask ed Indonesia to elaborate on the meaning of the 
"temporary limitations of imports for s pecific periods of time " as mentioned in its first written 
submission.649 Indonesia replied that "imports are not banned but only regulated in terms of 
timing when to enter the territory of Indonesia ".650 Similarly, in response to a Panel question on 
the manne r in which the Ministry of Trade gave effect to the specific time periods mentioned in 
Article  8(2)e of MOA  86/2013, Indonesia replied that this was done by issuing Import Approvals in 
accordance with these time periods and that the Ministry of Agriculture  guaranteed that all RIPHs  
that were submitted when applying for Import Approvals complied with the specific time periods 
by "working with importers at the RIPH application stage to ensure they exclude the specified time 
period  from their license request ". Indonesia further clarified that the time period requirement did 
not place limits on the quantity of products but only on the timing of  import s.651 
7.151.   It thus appears that Measure  4 is designed within the context of other components of 
Indonesia's import licen sing regime, allowing the government to prohibit importation of particular  
products during particular  periods. While the letter of Measure  4 does not expressly restrict 
importation in terms of specific quantities, the practical consequence of limiting impo rtation 
temporally, as framed by Indonesia, is that during certain periods of time  the volume of imports is  
reduced to zero . Hence,  Measure  4 constitutes a quantitative restriction amounting to a total 
prohibition because  no imports are permitted during  specified  period s of time. Likewise, Measure  4 
also constitutes a quantitative restriction when importation is not prohibited  because  the volume  of 
imports that is allowed is reduced during a given time period.  
7.152.   This understanding is confirmed by the evidenc e presented by the co -complainants. For 
instance , the co -complainants have submitted a letter dated 6 May 2015 from the Secretary to the 
Director General of Horticulture addressed to the Secretary to the Director General of Processing 
and Marketing of Agri cultural Products, responding to a request for "data and information in 
relation to harvesting season and monthly production from July – December 2015 for several fruit 
and vegetable commodities "652, and recommending the institution of an import ban on horti cultural 
products that compete with domestic products to be harvested in the period in July  to December. 
The Secretary to the Director General of Horticulture further recommended imposing "import 
restrictions " on certain products having no defined local ha rvest season and on products to be 
harvested in the first half of the year.653 
                                                
648 Indonesia's first written submission, para. 82.  
649 Panel question No.  33 (referring to Indonesia's first written submission, paras. 82 -83).  
650 Indonesia 's reply to Panel question No.  33.  
651 Indonesia 's reply to Panel question No.  34. 
652 Letter fro m Dr Yul H arry Bahar, Secretary to the Director General for Horticulture to the Secretary to 
the Director General of Processing and Marketing of Agricult ural Products, May 6, 2015, Exhib its USA-25 and 
NZL-39. 
653 Letter from Dr Yul Harry Bahar, Secretary to the Director General for Horticulture to the Secretary to 
the Director General of Processing and Marketing of Agricultural Products, May 6, 2015, Exhibit s USA-25 and 
NZL-39. The letters reads: "It is necessary that we suggest a restriction or ban on imports for the following 
vegetable and fruit commodities for Semester II of 2015:  
1. No red onion imports, because there was a large harvest in [Indonesia 's] production  
centers, Central Java, East Java, South Sulawesi and West Nusa Tenggara (NTB), so that  
there is a surplus of supply for July, August and September.  
2. No chilli imports, because production is even/stable throughout the year and price is  
relativ ely stable, and there is a government program which facilitates chilli planting  
during the dry season which will yield harvests in Semester II.  
3. Import restriction on processed potatoes and Atlantic potato seeds.  
4. Import restriction on carrots – limite d to 15 % of demand – because there are market  
segments which require certain qualities [of carrots]. However if there is a policy to  
completely stop carrot imports, we will support it.  
5. No mango imports because many areas will have a large harvest, espe cially during  
Semester II in the months of October, November, and December. For July, August and  
December there will be harvests in West Java, Central Java and South Sulawesi.  
6. No banana, melon, papaya and pineapple imports, as the production is even/sta ble 
throughout the year and is able to meet domestic demand; bananas and pineapples have  
been exported to several countries.  
7. Import restriction on oranges for October, November and December because several  
production centers such as West Sumatra, West K alimantan and East Java will still be  
harvesting in July and August, and tend to decrease in October, November and December.  
8. Import restriction on durian in August, September and October because there will be no  
harvest occurring [then].  
… WT/DS477/R • WT/DS478/R  
 
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  7.153.   Furthermore, the United States has provided the Panel with Indonesia's import data for the 
relevant horticultural products pointing to the limiting effects of Measure  4 on importa tion:  
a. Indonesia imported approximately 980,000 kilograms of mangoes in 2011 and one 
million kilograms in 2012654 but the import quantity fell after the promulgation of MOA 
86/2013, to 119,000 kilograms in 2013 and to 233,466 kilograms in 2014;  
b. There was no  importation of mangoes from January to August of 2013 and from June to 
December of 2014655; 
c. Import data for other covered horticultural products such as bananas, durians, melons, 
and pineapples follow a similar pattern656;  
d. In late 2015, the Ministry of Agric ulture shared with importers its plans for seasonal 
restrictions in 2016657, which included a complete yearly ban on shallots, chillies , 
bananas, pineapples, mangoes, melons, and papayas.658 Carrots are restricted to 15% of 
demand, durian is allowed for only t hree months, and oranges and onions are allowed 
for only six months659;  
e. In 2015, the Ministry of Agriculture did not issue permits for importation of any citrus 
fruits except lemons from July to September.660 
7.154.   We note that one of the arguments put forward by N ew Zealand is that Measure  4 has a 
limiting effect on imports through restricting the ability of imported products to compete in the 
domestic marketplace. In our view, there is no scope  for competition when the imported products 
cannot enter the marketplac e and this is precisely what may happen whenever Measure  4 is 
triggered by Indonesia  and a prohibition to import certain products during a time period  is 
enforced.  
7.155.   We note that both parties referred the Panel to prior disputes where panels examine d 
measur es sharing some features with Measure  4. For instance, New Zealand refers to Colombia  – 
Ports of Entry  when arguing  the limiting effect on imports through restricting the ability of 
imported products to compete in the domestic marketplace.661 The United Stat es refers to the 
panel in Turkey – Rice that examined, in the context of Article  4.2 of the Agreement on 
Agriculture, Turkey's suspension of issuing import permits during local harvest periods to ensure 
the absorption of local rice production662, and found t hat such measure "restricted the importation 
of rice for periods of time " and was thus a quantitative import restriction.663 We agree with the co -
complainants that Measure  4 shares similar features with those examined by these panels. In any 
event, Measure  4 has a limiting effect on importation as its application results in either the 
prohibition of importation or a restriction in the volume of products that can be imported.  
7.2.8.3   Conclu sion 
7.156.   For the reasons stated above, we find that Measure  4 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation .  
                                                
654 United Stat es' first written submission, para. 182 (referring to "Query: Importation of Mangoes, from 
2011-2015, Monthly, " BPS – Statistics Indonesia, Exhibit USA -51). 
655 United States ' first written submission, para. 182 (referring to "Query: Importation of Mangoes, from 
2011-2015, Monthly, " BPS – Statistics Indonesia , Exhibit USA -51).  
656 United States ' first written submission, para. 182; second written submission, para. 23.  
657 United States ' second written submission, para. 23 (referring to Exhibit USA -91). 
658 United States ' second written submission, para. 23 (referring to Exhibit USA -91). 
659 United States ' second written submission, para. 23 (referring to Exhibits USA-91 and USA-92). 
660 United States ' second written submission, para. 23 (referring to Exhibits USA-27, USA-92 and 
USA-93). 
661 New Zealand 's first written submission, para. 242 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.236).  
662 United States ' first written submission, para. 180 (referring to Panel Report, Turkey – Rice, 
para. 7.113).  
663 United States ' first written submission, para. 180 (referring to Panel Report, Turkey – Rice, 
para. 7.121).   WT/DS477/R • WT/DS478/R  
 
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  7.2.9   Whether Measure  5 (Storage ownership and capacity requirements ) is 
inconsistent wit h Article  XI:1 of the GATT 1994  
7.2.9.1   Arguments of the parties  
7.2.9.1.1   New Zealand  
7.157.   New Zealand claims that the storage ownership and capacity requirement has a limiting 
effect on imports and is inconsistent with Article XI:1 of the GATT 1994.664 According to New 
Zealand, Indonesia's import licensing regime for horticultural products requires that, in order to 
obtain an RI designation and an RIPH, importers must own storage facilities that are appropriate 
to the type and quantity of imported products.665 New Zealand argues th at this measure has a 
limiting effect on imports for two reasons: (i) the requirement to own storage facilities of 
appropriate capacity places an unnecessary and burdensome limitation on importers when they 
could simply hire, or have access to the required  storage facilities, and (ii) it allows Indonesia to 
place a ceiling on the quantity of imported horticultural products allowed into the market according 
to the size of storage capacity the importer owns.666  
7.158.   New Zealand recall s that the panel in Argentina – Import Measures  found that the Advance 
Sworn Import Declaration required by the Argentine Government for most imports of goods 
constituted a restriction within the meaning of Article XI:1667, because, inter alia , "it does not allow 
companies to import as mu ch as they desire or need without regard to their export 
performance ".668 New Zealand claims that, in terms of tying the quantity of imports to another 
factor, a parallel can be seen in this dispute where Indonesia's storage capacity requirement does 
not all ow companies to import as much as they desire or need without regard to their storage 
capacity at a one -to-one ratio.669 New Zealand argues that this one -to-one ratio is imposed even 
though fresh fruit and vegetables are almost always sold to customers short ly after they are 
imported, and without taking into account product turnover during that period. According to New 
Zealand therefore, this measure has a significant limiting effect on the quantity of imports.670 New 
Zealand further submits that t his effect is  exacerbated by the requirement to own, rather than 
lease or have access to, storage facilities of the requisite capacity. In this regard, New Zealand 
refers to the Panel in Brazil – Retreaded Tyres , which considered that there could be restrictions on 
importation where the measure acted as a disincentive to importation by penalizing it, or making it 
prohibitively costly.671 New Zealand argues that the storage ownership and capacity requirement 
places a significant burden on importers that is unrelated to the ir normal importing activity.672  
7.159.   New Zealand contends that Indonesia has failed to explain why it is necessary for 
importers to own storage capacity and why importers cannot lease or otherwise acquire access to 
appropriate storage capacity. For New Zealand,  Indonesia has also failed in explaining why it is 
necessary for importers to own storage capacity that must equal the quantity of product s imported 
over the entire six -month period on a one -to-one ratio.673 Responding to Indonesia's arguments, 
New Zealand c ontends that evidence shows that if the owned storage capacity does not match the 
findings of the Ministry of Trade audit, an importer is required to reapply for registration as a 
Registered Importer and specify on the application the storage capacity as d etermined by the 
Ministry of Trade.674 
                                                
664 New Zealand 's first written submission, para. 250. 
665 New Zealand 's first written submission, para. 243. 
666 New Zealand 's first written submission, para. 244. 
667 New Zealand 's first written submission, para. 247 (referring to Panel Report, Argentina – Import 
Measures  at para. 6.474).  
668 New Zealand 's first written submission, para. 247 (referring to Panel Report, Argentina – Import 
Measures  at para. 6.474 ). 
669 New Zealand 's first written submission, para. 247. 
670 New Zealand 's first written submission, para. 248 (referring to ASEIBSSINDO Statement, Exhibit 
NZL-53); second written submission, para. 234. 
671 New Zealand 's first written submission, para. 249 (ref erring to Panel Report, Brazil – Retreaded 
Tyres , para. 7.370).  
672 New Zealand 's first written submission, para. 249 (referring to Panel Report, Argentina – Import 
Measures , para. 6.474).  
673 New Zealand 's second written submission, para. 234. 
674 New Zealand 's second written submission, para. 235 (referring to Exhibit NZL -57). WT/DS477/R • WT/DS478/R  
 
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  7.2.9.1.2   United States  
7.160.   The United States claims that Indonesia's requirement that an importer must own its 
storage facility to receive an RI designation and an RIPH to import fresh horticultural products and 
that the quantity sp ecified in the Import Approval cannot exceed the capacity of its storage facility 
is a restriction within the meaning of Article XI:1 of the GATT 1994 and is therefore inconsistent 
with Article XI:1.675 The United States also claims that this requirement is not a duty, tax or other 
charge and is therefore within the scope of Article XI:1.676  
7.161.   The United States submits that Indonesia limits the total quantity specified on an Import 
Approval for each semester to the total storage capacity of the facilities owned by the RI and that 
such a requirement limits the quantity of imported products allowed as well as increases the cost 
of importation. According to the United States, this requirement is a limitation or limiting condition 
on importation, or has a limiting ef fect on importation and is therefore a "restriction " within the 
meaning of Article XI:1 of the GATT 1994.677 The United States explains that this requirement 
limits the quantity of products that can be imported during a semester because it does not take 
into account that horticultural product inventory typically undergoes multiple turnovers in a 
semester.678 For the United States, limiting the quantity of imported products for an entire 
semester to the storage capacity of each importer necessarily limits the qu antity of imports 
because it operates as an artificial ceiling on the quantity an RI can import during each semester. 
The United States submits that even if the RI manages to purchase additional storage facilities, or 
expand the capacity of existing facili ties, it still has to wait until the next semester to increase the 
quantity specified in its Import Approval.679 
7.162.   The United States argues that the ownership requirement also adversely affects the 
competitive opportunities of imported products by creating bur densome and even prohibitive 
storage costs. In particular, the United States submits that this requirement precludes RIs from 
seeking alternative, more economical storage arrangements, including leasing or renting capacity 
and creates a higher capital barr ier to entry for importers seeking RI designation, thereby reducing 
the pool of customers for shippers and exporters.680 
7.163.   Responding to Indonesia's argument that  the co-complainants’ claim against the storage 
capacity requirement is "at odds with the Complain ants’ claim that importers are habitually 
underestimating their import volumes because of the 80 % realization  requirement "681, the United 
States argues this is not the case since (i) there may be two independent causes for an importer’s 
decision to reduce th e quantity of products they seek to import and (ii) the restrictive effect of 
different requirements may operate most strongly for different importers at different times, so 
that, for example, an importer owning a great amount of storage capacity might be most affected 
by the realization  requirement, while importers hoping to import more than their owned storage 
capacity might be affected most by the storage capacity requirement.682    
7.2.9.1.3   Indonesia  
7.164.   Indonesia argues that the storage ownership requirement is not a  restriction on imports 
within the meaning of Article XI:1 of the GATT 1994 as Indonesia does not place a limit on the 
amount of storage capacity an importer may acquire, just as it does not limit the amount of goods 
an importer may import during a particu lar validity period. According to Indonesia, any limitations 
placed on importers' ability to import are self -imposed and this requirement is merely a food -
safety measure that does not interfere with trade volumes.683 
7.165.    Indonesia submits that the co -complainan ts' argument that the storage capacity 
requirement acts as an "artificial ceiling " on imports is at odds with the co -complainants' claim that 
importers are habitually underestimating their import volumes because of the 80% realization  
requirement. Accordin g to Indonesia, this is so as the co -complainants are arguing that importers 
                                                
675 United States ' first written sub mission, para. 187 . 
676 United States ' first written submission, fn. 330.  
677 United States ' first written submission, para. 188; second written submission, para. 25.  
678 United States'  first written submission, paras. 189 -190; second written submission, para. 25. 
679 United States ' first written submission, para. 189.  
680 United States ' first written submission, para. 190.  
681 United States ' second written submission , para. 26 (referring to Indonesia 's first written submission, 
para. 85) . 
682 United States ' second written submission, para. 27.  
683 Indonesia 's first written submission, para. 147; second written submission, para. 1 77. WT/DS477/R • WT/DS478/R  
 
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  are unable to import as much as they like, while at the same time they are struggling to import 
80% of their anticipated import volumes.684 
7.2.9.2   Analysis by the Panel  
7.166.   The task before the  Panel is to establish whether, as claimed by the co -complainants685, 
Measure  5 is a restriction within the meaning of Article XI:1 of the GATT 1994 and therefore 
inconsistent with this provision.  In particular, we are to determine whether it constitutes a 
restriction having a limiting effect on importation of horticultural imports into Indonesia and limits 
the competitive opportunities of importers and imported products.  
7.167.   We com mence by observing that the co -complainants argue d that Measure  5 constitutes a 
restriction having a limiting effect on importation686, and that it is not a duty, tax, or other charge, 
and is therefore within the scope of Article XI:1.687 New Zealand also argue d that the components 
of Indonesia's import licensing regime for animals, animal products and horticultural products, 
which include Measure 5, constitute prohibitions or restrictions made effective through an "import 
licence " or, alternatively, an "other measure ".688 The United States submits that Article  XI:1 
applies to any "restriction ," including those "made effective through quotas, import or export 
licenses or other measures ".689 
7.168.   We also observe that Indonesia has not contested the co -complainants' characteri zation of 
Measure  5.690 Rather, it has responded that its measures a re outside t he scope of Article  XI:1 
because they are automatic import licensing regimes.691 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall per se  outside 
the sco pe of Article XI:1 of the GATT 1994. Given the description of Measure  5 in Section  2.3.2.5 
above , we concur with the co -complainants that Measure  5 is not a duty, tax, or other charge and 
it is therefore not excluded explici tly from the scope of Article  XI:1 of the GATT  1994.  
7.169.   As with the previous measures692, we proceed to examine whether the co -complainants 
have demonstrated that Measure  5 prohibits or restricts trade, rather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure  5 has a limiting effect on 
importation . To carry out this analysis, we recall that the Panel is to examine the design, 
archite cture, and revealing structure of Measure  5, within its relevant context.   
7.170.   As described in Section 2.3.2.5 above , we observe that Measure  5 consists of the 
requirement that importers must own their storage facilities with su fficient capacity to hold the 
quantity requested on their Import Application.693 This Measure is implemented by Indonesia 
through Article 8 (1)(e) of MOT 16/2013, as amended by MOT 47/2013, and by Article 8(2)(c)  and 
(d) of MOA 86/2013. Accordingly, Article 8 (1)(e) of  MOT 16/2013, as amended by MOT  47/2013, 
requires that importers applying for designation as an RI  are to provide "proof of ownership of 
storage facilities appropriate for the product's characteristics ", while Article 8(2)(c) of 
MOA 86/2013 requir es importers to include a statement of ownership of storage as part of their 
RIPH applications.  
7.171.   We observe that b oth co -complainants have focused their argumentation on the structure 
of Measure  5 as causing that limiting effect on importation.  For instanc e, New Zealand argue d that 
Measure  5 has a limiting effect on imports because the requirement to own storage facilities of 
appropriate capacity places an unnecessary and burdensome limitation on importers when 
importers could simply hire, or have access to , the required storage facilities ; and because it 
                                                
684 Indonesia 's first written submission,  para. 146; second written submission, para. 1 77. 
685 New Zealand 's first written submission, para.  250; United States ' first written submission, para. 188.  
686 New Zealand 's first written submission, para. 2 50; United States ' first written submission, para. 191. 
687 New Zealand 's first written submission, para. 2 84; United States ' first written submission, fn. 330.  
688 New Zealand 's first written submission, para. 284.  
689 United States ' first written submission, para. 142.  
690 Indonesia 's response to Panel question No. 10. 
691 Indonesia 's second written submission, para. 165.  
692 See for instance, paragraph  7.76 above.  
693 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand 's first 
written  submission, para. 99; United States ' first written submission, para. 66.    WT/DS477/R • WT/DS478/R  
 
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  allows Indonesia to place a ceiling on the quantity of imported horticultural product that is allowed 
into the market according to how much storage capacity the importer owns.694  
7.172.   In the same vein, the United  States explain ed that this requirement limits the quantity of 
products that can be imported during a semester because it does  not take into account that 
horticultural product inventory typically undergoes multiple turnovers in a semester.695 For the 
United States, limiting the quantity of imported products for an entire semester to the storage 
capacity of each importer necessarily limits the quantity of imported products because it operates 
as an artificial ceiling on the quantity an RI can import during eac h semester. In its view, even if 
the RI manages to purchase additional storage facilities or expand the capacity of its existing 
facilities, it still has to wait until the next semester to increase the quantity specified in its Import 
Approval.696 
7.173.   The United  States further argue d that the ownership requirement adversely affects the 
competitive opportunities of imported products by creating burdensome and even prohibitive 
storage costs. In particular, the United States submit ted that this requirement precludes  RIs of 
horticultural products from seeking alternative, more economical storage arrangements, including 
leasing or renting capacity and creates a higher capital barrier to entry for importers seeking RI 
designation, thereby reducing the pool of customers for shippers and exporters.697  
7.174.   Indonesia disagree d and argue d that it does not place a limit on the amount of storage 
capacity an importer may acquire, just as it does not limit the amount of goods an importer may 
import during a particular validity period.  According to Indonesia, any limitations placed on an 
importer' s ability to import are self -imposed and this requirement is merely a food -safety measure 
that does not interfere with trade volumes .698 
7.175.   We commence by examining the allegations that Measure  5 has a limiting effect on the 
importation of horticultural products into Indonesia. Looking at  the design, architecture  and 
revealing structure of this Measure , we observe that it explicitly limits the volume of imports of 
horticultural products by a given im porter to the maximum amount that this importer can store in 
its own storage facilities during the six-month validity period of its Import Approval.  The importer 
cannot therefore request an Import Approval for a quantity that exceeds the capacity of the 
storage facilities it owns, even if, for instance, the importer rents or borrows appropriate storage 
facilities. This effectively ties the permitted import quantities to the storage capacity owned by the 
importer and consequently creates a numerical limit on the amount of products an importer may 
bring into Indonesia each semester. In other words, Measure 5 imposes a  limit on horticultural 
product  imports that equals the storage capacity that an importer owns when it applies for a 
Recommendation and an Import  Approval. We thus perceive the limiting effect of this Measure in 
terms of volume of imports.  
7.176.   We also observe that the restrictive effects of this numerical limitation could be 
exacerbated, as the co -complainants argu ed, by ignoring the possibility  of mul tiple turnovers of 
horticultural products taking place during a six -month period.699 In this sense, additional storage 
capacity might gradually become available as the products are sold , therefore allowing importers 
to renew their inventories with new import s. This measure , however,  precludes  such possibility  as 
storage capacity is measured when the importer applies for the relevant import documents and 
remains fixed and unchanged during the six -month validity period of Import Approvals . Even if 
importers sel l their entire inventory well before the end of that period,  or if they acquire more 
storage capacity700, they would not be able to  import more products during the same period. This 
is the consequence of the combined operation of Measure 5 with Measures  1 (Application windows 
and validity periods) and 2 (Fixed and periodic import terms), thus precluding importers from 
modifying the terms (such as quantity of products) in their Recommendations or Import Approvals 
during the validity periods of such documents .701  
                                                
694 New Zealand 's first written submission, para. 244.  
695 United States'  first written submission, paras. 189 -190; second written submission, para. 2 5. 
696 United States ' first written  submission, para. 189.  
697 United States ' first written submission, para. 190.  
698 Indonesia 's first written submission, para. 147; second written submission, para. 1 77. 
699 United States' first written submission, para. 189 (referring to Exhibit USA -28); New Z ealand's first 
written submission, para. 246 (referring to Exhibit NZL -56). 
700 United States' first written submission, para. 189. New Zealand's first written submission, para. 244.  
701 See Section 7.2.6 above.  WT/DS477/R • WT/DS478/R  
 
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  7.177.   We further concur with the co -complainants that M easure  5 affects the importers' 
commercial opportunities because it increases the costs associated with importation and sets a 
numerical limit to imports. Indeed, importers are obliged to own their storage  facilities thus 
incurring  an additional and rather onerous limitation because  they cannot  simply lease or even 
borrow facilities ; they must own them. As the co -complainants point out, Indonesia has not 
explained why it is necessary for importers to own th e storage facilities  rather than simply renting 
them or using more flexible schemes . The costs are also increased for potential entrants to the 
import market as they will have to invest in storage facilities, as opposed to simply renting or 
finding less ex pensive arrangements, to become eligible to receive an RI designation.  
7.178.   We note Indonesia's contention that Measure  5 does not place a limit on the amount of 
storage capacity an importer may acquire  and that any limitations placed on importers' ability to 
import are self -imposed.702 We can concede that by owning more storage capacity , importers 
could mitigate the impact of this requirement  because they would be able to request higher 
quantities in their Import Approvals. This however proves the additional burd en placed on 
importers because owning larger facilities, as opposed to renting or engaging in other more flexible 
arrangements, certainly represents an additional cost.  In our view, even if there is a degree of 
private choice in determining the numerical l imitation  of imports, as it is the importer who decides 
how much storage capacity it wants (or simply can) own, the existence of  the limiting effect on 
importation  is not a consequence of the importer's decision but rather  of the design, architecture 
and revealing structure of Measure  5. 
7.2.9.3   Conclu sion 
7.179.   For the reasons stated above, we find that Measure  5 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation .  
7.2.10   Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products ) is inconsistent with Article  XI:1 of the GATT 1994  
7.2.10.1   Arguments of the parties  
7.2.10.1.1   New Zealand  
7.180.   New Zealand claims that Indonesia's restrictio ns on  the use, sale and distribution of 
horticultural products are designed to have a limiting effect, at the border, on the products that 
can be imported into Indonesia.703 New Zealand argues that these restrictions create disincentives 
to importation and p lace an undue burden on imports704, and are thus restrictions inconsistent 
with Article  XI:1 of the GATT  1994.705 New Zealand argues that importers of horticultural products 
must obtain an Import Approval as either an RI or PI in order to import certain hortic ultural 
products. New Zealand contends that RIs may only trade or transfer imported horticultural 
products to a distributor and are forbidden from trading or transferring the imported products 
directly to consumers or retailers.706 Similarly, New Zealand arg ues that PIs may only import 
horticultural products as raw materials or supplementary materials for industrial production 
processes and are prohibited from trading and/or transferring imported horticultural product.707 
According to New Zealand, if RIs and PI s do not comply with these restrictions, their recognition as 
an RI or PI can be revoked.708 For New Zealand, the limiting effect of this measure arises from the 
RIs' inability to channel certain horticultural products directly to consumers and retailers,  which 
                                                
702 Indonesia 's first written submission, para. 147; second written submission, para. 1 77. 
703 New Zealand 's first written submission, para. 258 (referring to Appellate Body Report, Argentina – 
Import Measures , para. 5.217).  
704 New Zealand 's first written submission, para. 258  (referring to Panel Report, Brazil – Retreaded 
Tyres , para. 7.730, 7.737.  
705 New Zealand 's first written submission, para. 258.  
706 New Zealand 's first written submission, para. 251 (referring to Article 15, MOT 16/2013,  Exhibit 
JE-8). 
707 New Zealand 's first written submission, para s. 251 and 253  (referring to Article 7, MOT 16/2013,  
Exhibit JE -8). 
708 New Zealand 's first written submission, para. 25 1 (referring to Article 26(f), MOT 16/2013, Exhibit 
JE-8). WT/DS477/R • WT/DS478/R  
 
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  adds a distribution layer,  and the requirement that PIs must use all the imported horticultural 
products for processing or destroy or re -export unused products.709   
7.181.   New Zealand submits  that WTO jurisprudence makes clear that the restriction or limiting 
effect of a measure must be on "importation " itself710, and that the expression "restriction … on 
importation " has been interpreted as a restriction "with regard to " or "in connection with " the 
importation of a product.711 According to New Zealand, there must be a link between the limiting 
effect of a measure and the importation of a product. This link can be demonstrated through the 
"design, architecture, and revealing structure " of a measure.712 New Zealand argues that in the 
present dispute, there is a clear c onnection between the limiting effect of the restrictions on use, 
sale and distribution of listed horticultural products and the importation of such products into 
Indonesia. New Zealand states that  this is illustrated by the fact that RI and PI designation s will 
not be issued unless the importer submits as part of its application proof of a distribution contract 
and a statement that the importer will not sell directly to consumers (in the case of an RI )713 or 
proof of an Industrial Business Licence or similar  (in the case of a PI)714, and that a failure to 
comply with the use, sale and distribution conditions is enforced through sanctions under which an 
Importer's Designation may be revoked, and the importer will be unable to import horticultural 
products.715 New Zealand submits that in  India – Quantitative Restrictions , the panel found that 
India maintained an import licensing regime that included the requirement that only entities 
defined as an "Actual User " could import certain goods.716 New Zealand argues that t he panel 
concluded that this condition was "a restriction on imports because it precludes imports of 
products for resale by intermediaries "717 that operated as a restriction under Article XI:1.718  
7.182.   Responding to Indonesia's argument that this measure is not a p rohibited restriction under 
Article XI:1 of the GATT 1994 because the co -complainants have failed to demonstrate that 
"limiting imports of horticultural products to certain end uses " has limited imports of horticultural 
products "overall "719, New Zealand con tends that Indonesia appears to be arguing that the co -
complainants must show that there is a quantitative impact on imports for a breach of Article XI:1 
to be found and that this argument must fail since WTO jurisprudence makes it clear that this need 
not be demonstrated by quantifying the effects of the measure at issue.720 
7.2.10.1.2   United States  
7.183.   The United States claims that Indonesia's restrictions on importation of horticultural 
products based on their use, sale, and transfer, are restrictions within the meaning of Article XI:1 
and are therefore inconsistent with this provision.721 The United States also claims that this 
requirement is not a duty, tax, or other charge, and, therefore, is within the scope of 
Article  XI:1.722 The United States submits that  RIs can only sell imported horticultural products to 
distributors and are prohibited from selling directly to consumers and retailers while PIs can only 
                                                
709 New Zealand 's first written submission, paras. 251 -253; second written submission, para. 2 49. 
710 New Zealand 's first written submission, para. 2 55 (referring to Appellate Body Report, Argentina – 
Import Measures , para. 5.217 and Panel Report, Dominican Republic – Import and Sale of Cigarettes , 
para. 7.261).  
711 New Zealand 's first written submission, para. 255 (referring to Panel Report, Argentina – Import 
Measures , para. 6.458).  
712 New Zealand 's first written submission, para. 255 (referring to Appellate Body Report, Argentina – 
Import Measures , para. 5.217).  
713 New Zealand 's first written submission, para. 2 57 (referring to Article 8(1)(g), (h) and (i), 
MOT 16/2013 , Exhibit JE -8). 
714 New Zealand 's first written submission, para. 2 57 (referring to Article 5(1)(a), MOT 16/2013 , Exhibit 
JE-8). 
715 New Zealand 's first w ritten submission, para. 2 57 (referring to Article 26, MOT 16/2013 , Exhibit 
JE-8). 
716 New Zealand 's first written submission, para. 2 56 (referring to Panel Report, India – Quantitative 
Restrictions , para. 2.24 ). 
717 New Zealand 's first written submission, para. 256 (referring to Panel Report, India – Quantitative 
Restrictions , para. 5.142).  
718 New Zealand 's first written submission, para. 2 56 (referring to Panel Report, India – Quantitative 
Restrictions , para. 5.143).  
719 New Zealand 's second written submission, para. 2 48 (referring to Indonesia 's first written 
submission, para s. 90 and  156).  
720 New Zealand 's second written submission, para. 2 48 (referring to Panel Report, Argentina – Import 
Measures , para. 6.264, which in turn refers to  the Panel Report, Argentina  – Hides and Leather , para. 11.20; 
and Appellate Body Report, Argentina – Import Measures , para. 5.217).  
721 United States ' first written submission, para. 192.  
722 United States ' first written submission, fn. 319.  WT/DS477/R • WT/DS478/R  
 
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  import horticultural products as materials for use in their own industrial production process and 
are prohibited fro m selling or transferring imported horticultural products to another entity.723 The 
United States argues that the Ministry of Trade may revoke an importer's RI or PI designation for 
violating these restrictions, which would make the importer ineligible to im port horticultural 
products.724  
7.184.   The United States further submits that the restrictions on the sale, transfer or use of 
imported products  are a limitation or limiting condition on importation, or have a limiting effect on 
importation since the importer may  not import and sell according to commercial considerations, 
but only as permitted by its importer status. The United States therefore claims that these 
requirements are a "restriction " within the meaning of Article XI:1.725 The United States argues 
that Ind onesia's restrictions also increase the costs associated with importation since, in the case 
of RIs, retailers such as supermarkets or vegetable and fruit vendors, cannot import horticultural 
products themselves and cannot buy directly from RIs. In the Uni ted States ' view, this requirement 
necessarily inserts another level in the supply chain between RIs and retailers by forcing importers 
and retailers to rely on distributors in their business models, which in turn, lengthens the supply 
chain and increases the costs associated with imported horticultural products.726 With regard to 
PIs, the United States claims that the restriction on importers and their sale and transfer of 
imported horticultural products creates waste and increases unnecessarily the cost of using 
imported products in their production processes since the restriction on sale and transfer forces 
them to either destroy the excess products or  incur the cost of storing them .727 For the United 
States, it is a basic rule of economics that if the input costs of producing or obtaining a product 
increase, the supply of the product in that market will decrease and thus, if imported horticultural 
products are made unnecessarily costly, the supply curve for such products will shift such that 
lower levels of i mports are brought into Indonesia.728 
7.185.   The United States submits that previous panels have found that measures imposing limits 
of this kind are restrictions under Article XI:1. The United States claims that the panel in India – 
Quantitative Restrictions  considered an import regime that also included a use restriction and the 
panel found this measure to be "a restriction on imports because it precludes imports of products 
for resale by intermediaries, i.e. distribution to consumers who are unable to import dire ctly for 
their own immediate use is restricted ".729 The United States claims that Indonesia's use, sale, and 
transfer restrictions operate in a similar manner, in that they preclude the importation of 
horticultural products for sale directly to retailers and  consumers and, in the case of PIs, for 
transfer or sale to another entity.730 
7.2.10.1.3   Indonesia  
7.186.   Indonesia argues that the limitation of imports of horticultural goods to certain end -users 
does not constitute a quantitative restriction within the mean ing of Article XI:1 of the GATT  1994. 
Indonesia submits that the co -complainants have failed to demonstrate that limiting imports of 
horticultural products to certain end uses has in any way limited the amount of imports for 
horticultural products overall.731 
7.187.   Indonesia sus tains that it differentiates between the RI and PI designation only for 
statistical purposes which allows keeping track of horticultural products needed for direct 
consumption and those used as a raw material for further processing. For Indonesia, these 
provisions do not in any way limit the quantity of imports for horticultural products.732 
                                                
723 United States ' first written submission, pa ra. 193 (referring to Article 7 of MOT 16/2013, as amended 
by MOT 47/2013); second written submission, para. 28.  
724 United States ' first written submission, para. 193 (referring to Article 26  of MOT 16/2013, as 
amended by MOT  47/2013 ). 
725 United States ' first written submission, para. 193; second written submission, para. 29.  
726 United States ' first written submission, para. 194 (referring to Stephen V. Marks, Indonesia 
Horticultural Imports and Policy Responses:  An Assessment , September 20 12, USAID/SEADI, at  26, Exhibit  
USA-53); second written submission, para. 29.  
727 United States ' first written submission, para. 195. 
728 United States'  second written submission, para. 30.  
729 United States ' first written submission, para. 196 (referring to Panel Report, India – Quantitative 
Restrictions,  para. 5.142).  
730 United States ' first written submission, para. 196.  
731 Indonesia 's first written submission, para. 156; second written submission, para. 190.  
732 Indonesia 's second written submission, para. 189.  WT/DS477/R • WT/DS478/R  
 
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  7.2.10.2   Analysis by the Panel  
7.188.   The task before the Panel is to establish whether, as claimed by the co -complainants733, 
Measure  6 imposes a limiting condition on importation  contrar y to Article XI:1 of the GATT 1994.  
In particular, we are to determine whether by prohibit ing RIs from selling imported horticultural 
products to consumers or retailers and, similarly, prohibit ing PIs from trading and transferring 
imported horticultural pr oducts,  Measure  6 constitutes a restriction having a limiting effect on 
importation . 
7.189.   We com mence  by observing that  the co -complainants argue d that Measure  6 constitutes a 
restriction on importation734, and that it is not a duty, tax, or other charge, and is therefore within 
the scope of Article XI:1.735 New Zealand contended  that the components of Indonesia's import 
licensing regime for animals, animal products and horticultural products, which include Measure  6, 
constitute prohibitions or restrictions made eff ective through an "import licence " or, alternatively, 
an "other measure ".736 The United States submit ted that Article XI:1 applies to any "restriction, " 
including those "made effective through quotas, import or export licenses or other measures ".737 
7.190.   We also ob serve that Indonesia has not contested the co -complainants' characteri zation of 
Measure  6.738 Rather, it has responded that its measures are outside the scope of Art icle XI:1 
because they are automatic import licensing regimes.739 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  6 in Section  2.3.2.6 
above , we concur with the co -complainants that Measure  6 is not a duty, tax, or other charge and 
it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.191.   As with the previous measures740, we proceed to examine w hether the co -complainants 
have demonstrated that Measure  6 prohibits or restricts trade, rather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demo nstrated that Measure  6 has a limiting effect on 
importation . To carry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  6, within its relevant context.   
7.192.   As described  in Section 2.3.2.6 above , we obse rve that Measure  6 consists of the 
requirements on the importation by PIs and RIs of listed horticultural products that limit the use, 
sale and distribution of the imported products.741 Indonesia implements this m easure through 
Articles 7 , 8, 15 and 26(e) – (f) of MOT 16/2013, as amended by MOT 47/2013. The requirements 
differ depending on whether the importer obtains a designation as a PI or RI.  Concerning PIs, 
pursuant to Article 7 of MOT 16/2013, as amended by M OT 47/2013, an importer that obtains the 
recognition as a PI can only import horticultural products as raw materials or auxiliary materials 
for its industrial production processes and is thus prohibited from trading and/or transferring them. 
Concerning RIs , Article 15 of MOT 16/2013, as amended by MOT 47/2013, provides that an 
importer that obtains the recognition as a n RI can only import horticultural products for 
consumption provided they are traded or transferred to a distributor and not directly to cons umers 
or retailers. Article s 26(e) and 26(f) of MOT 16/2013, as amended, further provide that 
designation as RI or PI can be revoked where the relevant importer is proven to have trad ed 
and/or transferred imported horticultural p roducts as is described in Articles 7 and 15  of MOT 
16/2013 . 
7.193.   We observe that  the co -complainants appear to consider that the structure and operation 
of Measure  6 is causing a limiting effect on importation by affecting the competitive opportunities 
of imported products. In essence, we understand the co -complainants to take issue with the 
requirement that horticultural products imported for consumption cannot be sold directly to 
                                                
733 New Zealand 's first written submission, para. 258 . United States'  first written submission, para. 193; 
second written submission, para. 29 . 
734 New Zealand 's first written submission, para. 258; United States ' first written submission, para. 192.  
735 New Zealand 's first written  submission, para. 284; United States ' first written submission, fn. 332.  
736 New Zealand 's first written submission, para. 284.  
737 United States ' first written submission, para. 142.  
738 Indonesia 's response to Panel question No.  10. 
739 Indonesia 's second writt en submission, para. 165.  
740 See, for instance, paragraph  7.76 above.  
741 New Zealand's Panel Request , pp. 1 -4; United States' Panel Request , pp. 1 -4; New Zealand 's first 
written submission, paras. 106 -109; Unit ed States ' first written submission, paras. 70 -72. WT/DS477/R • WT/DS478/R  
 
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  consumers but only to distributors and that those products imported for further processing cannot 
be sold o r transferred to another entity.  
7.194.   For instance, New Zealand argue d that the limiting effect of this measure arises from the 
inability of RIs to import certain horticultural products for direct sale to consumers and retailers, 
and of PIs who must use all the  horticultural products they import for processing or destroy or re -
export unused product s.742 New Zealand thus contend ed that there is a clear connection between 
the limiting effect of the restrictions on use, sale and distribution of listed horticultural p roducts 
and the importation of such products into Indonesia. New Zealand sustain ed that this is illustrated 
by the fact that RI and PI designations will not be issued unless the i mporter submits, as part of 
the importer d esignation application , proof of a distribution contract and a statement that the 
importer will not sell directly to consumers (in the case of an RI )743 or proof of an Industrial 
Business Licence or similar (in the case of a PI) .744 New Zealand further contended that  this 
Measure is enforced th rough sanctions under which an Importer's Designation may be revoked and 
the importer will be unable to import horticultural products.745  
7.195.   The United States agree d and also refer red to the way this measure limits the competitive 
opportunities of importers. I t thus argue d that Indonesia's restrictions also increase the costs 
associated with impo rtation since, in the case of RIs, retailers such as supermarkets or vegetable 
and fruit vendors, cannot import horticultural products themselves and cannot buy directl y from 
RIs. In the United States' view, this requirement necessarily inserts another level in the supply 
chain between RIs and retailers by forcing importers and retailers to rely on distributors in their 
business models, which in turn, lengthens the suppl y chain and increases the costs associated with 
imported horticultural products.746 With regard to PIs, the United States contended  that the 
restriction on importers and their sale and transfer of imported horticultural products creates 
waste and increases u nnecessarily the cost of using imported products in their production 
processes . This is so  because the restriction on sale and transfer forces the PI  to either destroy the 
excess imports  or incur the cost of storing them if not use d during its production p rocess.747 For 
the United States, it is a basic rule of economics that if input costs increase, supply will decrease 
and thus, if imported horticultural products are made unnecessarily costly, the supply curve for 
such products will shift such that lower lev els of imports are brought into Indonesia.748 
7.196.   We thus observe that the co -complainant s' case is built around the notion that Measure  6 
increases the cost s faced by  importers and reduces the competitive opportunities of imported 
products  by generating disince ntives and undue burden s on import ation.749Accordingly,  business 
operators  are compelled to take decisions and act without due regard to commercial 
considerations , only as permitted by one's importer status750 because  the costs associated with 
importation increase for both RIs (having to sell to distributors751) and PIs (having to either 
destroy the products imported in excess of actual processing, or incur the cost of storing them if 
unused).752  
7.197.   Although the immediate effect of this measure would be to prevent im porters of 
horticultural products from undertaking certain transactions in Indonesia, we concur with the co -
complainants that such requirements  are likely to have an impact on the competitive opportunities 
of importers and imported goods. As argued by the co-complainants, limiting the type of 
transactions that importers can carry out also affects importation because Measure  6 is structured 
                                                
742 New Zealand 's first written submission, paras. 251 -253; second written submission, para. 2 49. 
743 New Zealand 's first written submission, para. 257 (referring to Article 8(1)(g), (h) and (i), MOT 
16/2013 , Exhibit JE -8). 
744 New Zealand 's first written submission, para. 257 (referring to Article 5(1)(a), MOT 16/2013 , Exhibit 
JE-8). 
745 New Zealand 's first written submission, para. 257 (referring to Article 26, MOT 16/2013 , Exhibit 
JE-8). 
746 United States ' first w ritten submission, para. 194 (referring to Stephen V. Marks, Indonesia 
Horticultural Imports and Policy Responses: An Assessment , September 2012, USAID/SEADI, p.  26, Exhibit. 
USA-53); second written submission, para. 29.  
747 United States ' first written subm ission, para. 195. 
748 United States second written submission, para. 30.  
749 New Zealand 's first written submission, para. 2 58 (referring to Panel Report, Brazil – Retreaded 
Tyres , para. 7.730, 7.737 ). 
750 United States ' first written submission, para. 193 ; second written submission, para. 29.  
751 United States ' first written submission, para. 194 (referring to Stephen V. Marks, Indonesia 
Horticultural Imports and Policy Responses: An Assessment , September 2012, USAID/SEADI, p.  26, Exhibit. 
USA-53); second written  submission, para. 29.  
752 United States ' first written submission, para. 195. WT/DS477/R • WT/DS478/R  
 
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  as a condition that affects the importer 's eligibility with the consequence of non-compliance being 
the revocation of t he RI or PI status, thus eliminat ing the ability of importers to import products 
altogether.  
7.198.   We observe that by requiring products imported by RI's to be  traded or transferred to a 
distributor and not directly to consumers or  retailers , Measure  6 restricts  the competitive 
opportunities for imported products as it increases the costs of their marketing and affect s the 
business plans of importers. This is mainly a consequence of forcing importing products to go 
through a distributor before they can reach the final consumer and consequently inserting an 
additional layer in the distribution chain of horticultural products. In this respect, we agree with 
the United States that, in practical terms, this implies that retailers such as supermarkets or 
vegetable and fruit vendors cannot import horticultural products themselves and cannot buy 
directly from RIs.753 Similarly, in the case of PIs,  by requiring imported  products  to be used as raw 
materials or auxiliary materials for their industrial production processes and prohibiting PIs from 
trading and/or transferring them , Measure 6 imposes an undue burden on imports .754 Indeed, 
importers are forced to either use all the products they import for processing or find alternative 
ways to dispose of unused products that do not involve selling or transferring them in the 
Indonesian market.  
7.199.   As the co -complainants point out, in India – Quantitative Restrictions , the panel examined 
a similar measure , namely India's "actual user requirement " that provided that some products 
could onl y be imported by the "Actual User ", thus not allow ing the importation of products for 
resale by intermediaries. The panel, finding support in prior GATT  1947 reports755, found that the 
Indian measure was "a restriction on imports because it precludes imports  of products for resale 
by intermediaries, i.e. distribution to consumers who are unable to import directly for their own 
immediate use is restricted ".756 We concur with that panel's analysis and adopt it as our own  for 
the purpose of Measure  6.  
7.2.10.3   Conclu sion 
7.200.   For the reasons stated above, we find that Measure  6 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.11   Whether Measure  7 (Reference prices for chillies  and fresh shallots ) is 
inconsistent with Article  XI:1 of the GATT  1994  
7.2.11.1   Arguments of the parties  
7.2.11.1.1   New Zealand  
7.201.   New Zealand claims that Measure  7 which provides for reference prices for chillies  and 
fresh shallots for con sumption is inconsistent with Article XI:1 of the GATT 1994757 because 
imports of chillies  and fresh shallots are prohibited when the domestic price of those products falls 
                                                
753 United States ' first written submission, para. 194 (referring to Stephen V. Marks, Indonesia 
Horticultural Imports and Policy Responses: An Assessment , September 2012, USAID/SEA DI, p.  26, Exhibit 
USA-53); second written submission, para. 29.  
754 New Zealand 's first written submission, para. 258 (referring to Panel Report, Brazil – Retreaded 
Tyres , para s. 7.730 and 7.737.  
755 The panel observed that a minimum import price system had a lready been considered to be a 
restriction within the meaning of Article XI:1.  GATT  Panel Report , EEC – Programme  of Minimum Import Prices, 
Licences and Surety Deposits for Certain Processed Fruits and Vegetables , adopted on 18 October  1978, BISD 
25S/68, p ara. 4.9. Similarly, a panel found that a measure limiting exports below a certain price was within the 
scope of Article XI:1. GATT Panel Report,  Japan – Semi–conductors , adopted 4  May 1988, BISD  35S/116 , para. 
105. In a case involving limitations on the p oints of sale available to imported beer, a panel found that such 
limitations were restrictions within the meaning of Article XI:1. GATT Panel Report , Canada – Import, 
Distribution and Sale of Alcoholic Drinks by Canadian Provincial Marketing Agencies , ado pted on 22 March 
1988, BISD 35S/37, para. 4.24. This case involved state trading operations and the panel emphasized that the 
Note Ad Articles XI, XII, XIII, XIV and XVIII referred to "restrictions " generally and not to "import restrictions ". 
It accordingl y considered restrictions on distribution as within the meaning of "other measures " under 
Article  XI:1, even though such measures might be examined also under Article III:4. Here the restrictions at 
issue, although related to distribution, are on importati on. 
756 Panel Report, India – Quantitative Restrictions , paras. 5.142 -5.143.  
757 New Zealand 's first written submission, para. 267. WT/DS477/R • WT/DS478/R  
 
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  below a reference price set by the Ministry of Trade.758 The issuance of RIPHs for the importation 
of chillies  and shallots is based on a reference price determined by the Ministry of Trade759 so that 
if the domestic market price  for chillies  is below the stipulated reference price, the importation of 
chillies  and shallots is "postponed " until the domestic price exceeds the reference price.760 
7.202.   New Zealand submits that , since January 2013, the Indonesian Government has used the 
reference price mechanism to restrict imports, prohibiting imports of chillies  in all but five 
months.761 New Zealand argue s that similar restrictions apply to shallots.762 According to New 
Zealand, the statistics presented by Indonesia indicate that no imports of chillies  took place in 
February, March and April of 2015763 since the domestic price of big red chillies  in these mont hs 
was lower than the reference price and therefore imports would have been "postponed ".764 
Similarly, New Zealand contends that  there were no imports of shallots in January 2015 when the 
domestic price was lower than the reference price.765 For New Zealand, t he substantial drop in 
imports of chillies  from 5349.5 tonnes in 2011 to 29.5 tonnes in 2014, when the domestic price of 
chillies  was mostly lower than the reference price, provides support for the argument that the 
reference price system has a limiting ef fect on imports.766    
7.203.   New Zealand contends that Indonesia's reference price for chillies  and shallots is similar to 
minimum import  prices  requirements that previous panels and GATT panels, such as EEC –
Minimum Import Prices767 and Japan – Semiconductors768, have found to be inconsistent with 
Article XI:1 . New Zealand submits that the panel in China – Raw Materials  considered the 
consistency or otherwise of limiting exports below certain prices769 and found that China's 
requirement on exporting enterprises to expor t at set or coordinated export prices or otherwise 
face penalties was a restriction under Article XI:1 because it "by its very nature has a limiting or 
restricting effect on trade ".770 New Zealand also refers to Chile – Price Band System  and states 
that the conclusion in this dispute was that a measure which ensures that certain imported 
products will not enter a domestic market at a price lower than a certain threshold is inconsistent 
with the WTO Agreement.771 New Zealand claims that by  its nature, the refere nce price 
requirement is akin to those found in Chile – Price Band System  and China – Raw Materials .772  
7.204.   New Zealand further argues that r eference prices also create uncertainty, as has been 
acknowledged by a previous Assistant Minister for International Coo peration at the Indonesian 
Ministry of Agriculture.773 New Zealand argues that t he panel in Chile – Price Band System  
confirmed the approach taken by earlier panels, including Colombia – Ports of Entry ,774 that 
"uncertainty " created by a measure may constitute  a restriction within the meaning of 
                                                
758 New Zealand 's first written submission, para. 259 (referring to Article 14B, MOT 16/2013  as 
amended by MOT 47/2013 , Exhibit JE -10 and Article 5(4) of MOA 86/2013 , Exhibit JE -15). 
759 New Zealand 's first written submission, para. 2 59 (referring to Article 5(4), MOA 86/2013 , Exhibit 
JE-15).  
760 New Zealand 's first written submission, para. 259. 
761 New Zealand 's first written submission , para. 260. 
762 New Zealand 's first written submission, para. 262. 
763 New Zealand 's second written submission, para. 265 (referring to Exhibit IDN -29).  
764 New Zealand 's second written submission, para. 265 (referring to Exhibit IDN -31). 
765 New Zealand 's secon d written submission, para. 265 (referring to Exhibits IDN -29 and IDN -31). 
766 New Zealand 's second written submission, para. 265 (referring to Exhibits IDN -29 and IDN -31). 
767 New Zealand 's first written submission, para. 265 (referring to GATT Panel Report, EEC – Minimum 
Import Prices, para. 4.9).  
768 New Zealand 's first written submission, para. 263 (referring to GATT Panel Report, Japan –
Semiconductors , para. 105).  
769 New Zealand 's first written submission, para. 263 (referring to Panel Report, China – Raw Mat erials , 
paras. 7.1081 -7.1082).  
770 New Zealand 's first written submission, para. 263 (referring to Panel Report, China – Raw Materials , 
para. 7.1082).  
771 New Zealand 's first written submission, para. 264 (referring to Appellate Body Report, Chile – Price 
Band System , para. 254(b)).  
772 New Zealand 's first written submission, para. 265. 
773 New Zealand 's first written submission, para. 266 (referring to The Frame of Agricultural Policy and 
Recent Major Agricultural Policies in Indonesia " FFTC Paper , Exhibit NZL -61). 
774 New Zealand 's first written submission, para. 266 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.240).  WT/DS477/R • WT/DS478/R  
 
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  Article  XI:1.775 New Zealand submits that t here is inherent uncertainty in the reference price 
system for chillies  and shallots and that the setting of reference prices is opaque.776  
7.2.11.1.2   United States  
7.205.   The United States claims that this requirement is a prohibition or restriction within the 
meaning of Article XI:1 and, therefore, is inconsistent with Article XI:1 of the GATT 1994.777 
Additionally, the United States claims that this requirement is not a duty, tax, or other charge, 
and, therefore, is within the scope of Article XI:1.778 The United Stated submits that Indonesia's 
reference price requirement for chillies  and fresh shallots is a restriction under Article XI:1 because 
it limits importation of these products to periods when  market prices remain above a government -
determined level and is a prohibition for those periods when market prices fall below those levels. 
According to the United States, MOT 16/2013, as amended by MOT 47/2013, stipulates that the 
importation of chillies  and fresh shallots must "observe " the reference prices established by the 
Ministry of Trade779 and if the market prices of chillies  or fresh shallots fall below their respective 
reference prices, the regulation requires that their importation be "postponed until the market 
price again reaches the reference price. "780 For the United States, the reference price has also a 
limiting effect on importation at all times because the threat of such a broad prohibition reduces 
the incentives for importation.781   
7.206.   The Unit ed States submits that Indonesia's reference price  requirement is similar to a 
minimum import price requirement, which previous panels have found to be a restriction under 
Article XI:1. The United States submits that as the panel in China – Raw Materials  recognized, the 
"applicability of Article XI:1 to minimum price requirements " was addressed by two GATT panels, 
EEC – Minimum Import Prices  and Japan – Semi-Conductors , both of which concluded that such 
requirements were "restrictions " under Article XI:1.782 According to the United States, the 
reference price requirement is even more categorical than the minimum import prices or minimum 
export prices found to be restrictions by those previous panels because it prohibits any imports of 
chillies  and shallots onc e the reference price has been reached, not only imports sold at prices 
below that reference price.783 
7.207.   The United States contends that, contrary to Indonesia’s argument, it has provided ample 
and sufficient evidence demonstrating that the reference price system constitute s a restriction 
under Article  XI:1 of the GATT 1994.784 According to the United States, Indonesia has attempted 
to obscure this fact by arguing that the reference price  system "has had little or no impact on 
imports or the issuance of import li cences," and by presenting a chart purporting to show that 
imports of chillies  and fresh shallots into Indonesia were below the level of Import Approvals 
issued in 2013 and 2014.785 For the United States, Indonesia’s logic is inverted since imports for 
that period would be below the quantity of products listed on Import Approvals for that period if 
the reference price  prohibition were triggered.786  
                                                
775 New Zealand 's first written submission, para. 266 (referring to Panel Report, Argentina – Import 
Measures , para. 6.260).  
776 New Zea land's first written submission, para. 266 (referri ng to ″Horticultural Import Policy in 
Indonesia″  FFTC Paper , Exhibit NZL -59). 
777 United States ' first written submission, para. 198.  
778 United States ' first written submission, fn. 338.  
779United States ' first written submission, para. 199 (referring to Articl e 14B of MOT 16/2013, as 
amended by MOT 47/2013, Exhibit JE -10). 
780 United States ' first written submission, para. 199 (referring to Article 14B of MOT 16/2013, as 
amended by MOT 47/2013, Exhibit JE -10); second written submission, para. 33.  
781 United States ' first written submission, paras. 314 -315; second written submission, para. 33; 
response to Panel question No.  39, para. 110.  
782 United States ' first written submission, para. 201 (referring to Panel Report China – Raw Materials 
Panel , para. 7.1075 which c ited GATT Panel Report Japan – Semi-Conductors  paras. 106, 117; GATT Panel 
Report  EEC – Minimum Import Prices , para. 4.9).  
783 United States ' first written submission, para. 202.  
784 United States ' second written submission, para. 32 (referring to Indonesia 's first written submission, 
para. 93; response to Advance Panel question No.  31, para. 31; opening s tatement at the first substantive 
meeting of the Panel, para. 25).   
785 United States ' second written submission, para. 34 (referring to Indonesia 's opening s tatement at 
the first substantive meeting of the Panel, para. 25).  
786 United States ' second written submission, para. 34.  WT/DS477/R • WT/DS478/R  
 
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  7.2.11.1.3   Indonesia  
7.208.   Indonesia argues that reference prices for chillies  and shallots are not restrictions on 
imports within  the meaning of Article XI:1 of the GATT 1994 because the reference price system is 
not applied to individual entries. Indonesia argues that this scheme does not ban imports of chillies 
and shallots below the reference price by applying additional duties o r by "denying entry 
outright ".787 Indonesia argues that the reference price system for chillies  and shallots is one tool it 
uses to protect against harmful oversupply of perishable food items in equatorial heat and the 
consequences of extreme price volatilit y on the availability of a continuous supply of fresh chillies  
and shallots in Indonesia's food supply.788 
7.209.   Indonesia submits that the reference price system for chillies  and shallots is a temporary 
measure, which is necessary to remove a surplus of the like domestic product, and thus it is 
justified under Article XI:2(c)(ii) of the GATT 1994.789 Indonesia argues that it maintains a 
reference price system for the importation of chillies , shallots and beef as a tool to protect against 
harmful oversupply and spoil age of these highly  perishable food items in a hot equatorial climate. 
Reference prices are established by taking into account elements including supply and demand of 
the product concerned in the local market. According to Indonesia, if markets prices fall  below the 
respective reference prices, this indicates the existence of oversupply of such products in the 
domestic market.790 Indonesia notes that this system is not continuously in effect. Moreover, it 
argues, even when the market prices for chillies  and s hallots dip below the set reference price, this 
system is not automatically activated because the price drop will first trigger the relevant agency 
to investigate whether price volatility of these sensitive products merits a temporary cessation of 
imports.  Indonesia maintains that, when this system is indeed activated, it is always on a 
temporary basis in response to an immediate crisis.791 In response to a question from the Panel on 
how many times the reference price system  has been triggered with respect to  each of these two 
products in the course of 2013 -2015, Indonesia replied that it was in place in 2015.792 
7.2.11.2   Analysis by the Panel  
7.210.   The task before the Panel is to establish whether, as claimed by the co -complainants793, 
Measure  7 that provides for reference pric es for chillies and shallots has a limiting effect on 
importation  contrar y to Article XI:1 of the GATT 1994 . In particular , we are to determine whether 
the importation of chillies and shallots is prohibited when the domestic price falls below the 
reference  price and whether the Measure has a l imiting effect on importation during the times 
when the reference price system has not been triggered.  
7.211.   We begin by observing  that the co -complainants argue d that Measure 7 constitutes a 
restriction on importation794, and  that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.795 New Zealand argue d that the components of Indonesia's import 
licensing regime for animals, animal products and horticultural products, which include Measure  7, 
constitute prohibitions or restrictions made effective through an "import licence " or, alternatively, 
an "other measure ".796 The United States submit ted that Article XI:1 applies to any "restriction ", 
including those "made effective through quotas, impor t or export licenses or other measures ".797 
7.212.   We note that Indonesia has not contested the co -complainants' characteri zation of 
Measure  7.798 Rather, it has responded that its measures are outside the scope of Article  XI:1 
because they are automatic import licen sing regimes.799 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Me asure  7 in Section  2.3.2.7 
                                                
787 Indonesia 's first written submission, para. 154.  
788 Indonesia 's second written submission, para. 197.  
789 Indonesia 's second written submi ssion, paras. 197 and 256.  
790 Indonesia 's second written submission, para. 254.  
791 Indonesia 's second written submission, para. 255.  
792 Indonesia's  response to Panel question No.  37. 
793 New Zealand 's first written submission, para. 267;  United States ' first wr itten submission, para. 198 . 
794 New Zealand 's first written submission, paras. 259 and 267; United States ' first written submission, 
para. 198.  
795 New Zealand 's first written submission, para. 2 84; United States ' first written submission, fn. 338.  
796 New Zeal and's first written submission, para. 284.  
797 United States ' first written submission, para. 142.  
798 Indonesia 's response to Panel question No.  10. 
799 Indonesia 's second written submission, para. 165.  WT/DS477/R • WT/DS478/R  
 
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  above , we concur with the co -complainants that Measure  7 is not a duty, tax, or other charge and 
it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.213.   As with the  previous measures800, we proceed to examine whether the co -complainants 
have demonstrated that Measure  7 prohibits or restricts trade, rather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, we will det ermine 
whether the co -complainants have demonstrated that Measure  7 has a limiting effect on 
importation . To carry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  7, within its relevant  context.   
7.214.   As described  in Section 2.3.2.7 above , Measure  7 consists of the implementation of a 
reference price system by the Ministry of Trade on imports of chillies  and fresh shallots for 
consumption.801 Indonesia implements  this Measure by means of Article 5(4) of MOA 86/2013 and 
Article 14B of MOT 16/2013, as amended by MOT 47/2013.  Pursuant to these provisions, 
importation is  "postponed " when the market price falls below the pre -established reference price . 
Accordingly, wh enever  the reference price system is activated, imports are temporarily 
"postponed ", independently of whether an im porter holds an RIPH and/or an I mport Approval . 
Notably, a lready authorized import volumes do not "carry over " to the next validity period.802 
Imports are resumed when  the market price again reaches the reference price. 
7.215.   Indonesia's regulations define the term "reference price " as "the reference selling price at 
the retail level that is established by the Horticultural Product Price Monitoring Tea m".803 In 
determining the reference price, the Ministry of Trade takes into account: (1) farmers' operational 
costs; (2) farmers’ profit margins; and (3) a "reasonable price of such products to be sold to 
customers. "804 The Ministries of Agriculture and Trade (Directorate of Import, Directorate of Export 
Import Facilitation and Directorate of Primary and Strategic Products) are responsible for 
monitoring the reference price system while the domestic market prices of chil li and shallot are 
monitored by Indonesia 's Statistic Central Bureau.805  
7.216.   The Panel notes that t he reference price calculation methodology and parameters are not 
published.806 In response to a question from the Panel, Indonesia  indicated that the reference price 
for chillies and shallots has only bee n fixed once at IDR  26,300/kg for big red chil lies, 
IDR 28,000/kg for bird’s eye chil lies and IDR 25,700/kg for shallot s, effective from 3 October 2013 
to the present. Regarding the communication of  the factors included in the calculation 
methodology, Indo nesia responded that although these were not published, importers and 
exporters were "involved and engaged " during the formulation of the reference price.807 Indonesia 
also clarified that the reference price system for chillies and shallots was in place in 2 015.808 We 
further note that, pursuant Article  14B(3) of MOT 16/2013, as amended by MOT 47/2013, the 
reference price can be evaluated at any time by the Horticultural Product Price Monitoring Team.  
7.217.   The co-complainants ' challenge against Measure  7 appear s to be two -fold: on the one 
hand, they con sider that the design, structure and operation of Measure  7 results in both a straight 
import ban when the reference price system is triggered809; on the other hand, that this same 
design, structure and operation results  in restrictions having a limiting effect on importation during 
the times where the reference price system has not been triggered.810 
7.218.   Concerning the alleged import ban, w e observe that, pursuant to this Measure, importation 
is "postponed ", which in practice means that importation is not allowed , when the market price 
falls below the pre -established reference price. Thus, whenever the reference price system is 
                                                
800 See for instance, paragraph  7.76 above.  
801 New Zealand's Panel Request , pp. 1 -4; United States' Panel Request , pp. 1 -4; New Zealand 's first 
written submission, para. 109; United States ' first written submission, paras. 75 -76. 
802 See Indonesia 's response to Panel que stion No.  13.  
803 Article 1(15) of MOT  16/2013, as amended, Exhibit JE -10. 
804 Indonesia 's response to Panel question No.  35. 
805 Indonesia 's response to Panel question No.  35. 
806 Indonesia 's response to Panel question No.  35. 
807 Indonesia 's response to Panel que stion No.  35. 
808 Indonesia 's response to Panel question No.  37. 
809 New Zealand 's first written submission, para. 259 (referring to Article 14B of  MOT 16/2013  as 
amended by MOT 47/2013 , Exhibit JE -10, and Article 5(4) of MOA 86/2013 , Exhibit JE -15). United St ates' first 
written submission, para. 198.  
810 United States ' first written submission, paras. 314 -315; second written submission, para. 33; 
response to Panel question No.  39, para. 110.  WT/DS477/R • WT/DS478/R  
 
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  activated, imports are temporarily  banned, independently of whether an importer holds a valid 
RIPH an d/or an import approval. Our understanding of the functioning of the reference price 
system is that imports are not exactly "postponed " in the sense of deferred  or put on hold. Indeed , 
already authorized import volumes do not "carry over " to the next valid ity period.811 Indonesia 
explained that "[i]f the reference price system is activated and MOT temporarily suspends issuance 
of Import Approvals for chillies and shallots, an importer that only has an RIPH will not be allowed 
to import those products ".812 To us , this confirms that the effect of the temporary suspension is 
the imposition of a ban on importation because importers will not get one of the documents 
necessary to obtain the authori zation to import products, i.e. an RIPH and Import Approval.  In 
additio n, we observe that the ban applies to all chillies and shallots, whatever their price. 
Therefore, the ban is absolute even if the price of the imported chillies and shallots is above the 
respective reference price. Imports are resumed when the market price  reaches again the  
respective reference p rice.  
7.219.   We thus observe that the operation of the reference price system is simple: once the 
domestic prices for chillies  and shallots respectively fall below the reference prices established by 
the Ministry of Trade , imports of such products are suspended, which bearing in mind that already 
authorized import volumes do not "carry over " to the next validity p eriod, means that they are 
simply prohibited  during the activation of the reference price system . In other word s, once the 
reference price system is triggered, there is an absolute ban on the importation of these products  
that falls squarely into the definition  of a "prohibition " under  Article XI:1 of the GATT 1994 .813 
7.220.   We concur with the co -complainants in that Indon esia's reference price system for chillies  
and shallots is similar to minimum price requirements  that previous WTO and GATT panels  have 
found to be inconsistent with Article  XI:1. For instance, as recalled by the panel in China – Raw 
Materials , the "applic ability of Article  XI:1 to minimum price requirements " was addressed by two 
GATT panels, EEC – Minimum Import Prices  and Japan – Semi-Conductors , both of which 
concluded that such requirements were "restrictions " under Article XI:1.814 As New Zealand 
pointed out, the panel in China – Raw Materials  considered the consistency of limiting exports 
below certain prices815 and found that China's requirement on exporting enterprises to export at 
set or coordinated export prices or otherwise face penalties was a restri ction under Article  XI:1 
because "by its very nature has a limiting or restricting effect on trade ".816 New Zealand also 
argued that, by its nature, Measure 7 is akin to those found in Chile – Price Band System .817 We 
agree with the United States in that Measu re 7 is even more "categorical " than the minimum 
import prices or minimum export prices found to be restrictions by those previous panels because 
it prohibits any imports of chillies  and shallots once the relevant reference price has been reached, 
not only  imports sold at pri ces below that reference p rice.818 
7.221.   We thus conclude that the design, architecture and revealing structure of Measure  7 
results in a prohibition on importation each time the reference price system is triggered and  that it 
is thus contrary to Article XI:1 of the GATT 1994.  
7.222.   Concerning the alleged restrictive effect of this Measure in situations where the domestic 
price is above the reference price, we concur with the United States819 in that the operation of this 
Measure creates uncertainties a nd incentives for importers to limit the quantities they import.  On 
the one hand, these uncertainties are the logical consequence of the lack of transparency of this 
                                                
811 See Indonesia 's response to Panel question No.  13, setting a hypothe tical scenario of an importer 
who already holds an RIPH but is faced with the activation of the reference price system before the Import 
Approval is obtained.  
812 Indonesia 's response to Panel question No.  13. 
813 We recall that the Appellate Body has defined  this term as a "legal ban on the trade or importation of 
a specified commodity ". Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to the 
Appellate Body Reports, China – Raw Materials , para.  319) 
814 United States ' first written sub mission, para. 201 (referring to Panel Report China – Raw Materials 
Panel , para. 7.1075 that cited GATT Panel Report Japan – Semi-Conductors  paras. 106, 117; GATT Panel 
Report  EEC – Minimum Import Prices , para. 4.9).  
815 New Zealand 's first written submissio n, para. 263 (referring to Panel Report, China – Raw Materials , 
paras. 7.1081 -7.1082).  
816 New Zealand 's first written submission, para. 263 (referring to Panel Report, China – Raw Materials , 
para. 7.1082).  
817 New Zealand 's first written submission, para. 265 (referring to Appellate Body Report, Chile – Price 
Band System , para. 254(b)).  
818 United States ' first written submission, para. 202.  
819 United States ' first written submission, paras. 314 –315; second written submission, para. 33; 
response to Panel questio n No.  39, para. 110.  WT/DS477/R • WT/DS478/R  
 
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  system, as the reference price calculation methodology and parameters are not published820 and 
the reference price can be re -evaluated at any time.821 On the other hand, the design and 
structure of this Measure incentivi zes importers to be conservative in the amounts of their imports 
because increments in the supply of the chillies and shallots in the domestic market increase the 
likelihood of the reference price system being triggered and importation being "postponed ". 
Indeed, any increase in imports is likely to increase the supply  of these products  in the Indonesian 
market,  threatening to depress  domestic prices  and activate the reference price system with the 
ensuing import ban. I mporters would therefore have an incentive to limit the quantities they 
import to prevent  the price falling below the activation threshold . In this sense, t he mere 
possibility that the importation  of chillies and shallots may be banned altogether creates incentives 
for importers to limit the amounts of chillies  and shallots they import into Indonesia at any time 
and not just when the reference price system is actually tri ggered .  
7.223.   It is for these reasons that we cannot agree with Indonesia's attempt to justify its 
reference price system by arguing that it is not continuously in effect  and that even when the 
market prices for chillies  and shallots drop below the set referenc e price, this system is not 
automatically activated because the price drop will first trigger the relevant agency to investigate 
whether price volatility of these sensitive products merits a  temporary cessation of imports .822 As 
we stated above, the referenc e price system has a limiting effect on importation  even when  not 
actually triggered because it influences importers' decisions at all times as they will have an 
incentive to elude the Measure and mitigate its consequences.   
7.224.   As argued by New Zealand, the panel in Chile  Price Band System  confirmed the approach 
taken by earlier panels, including Colombia – Ports of Entry ,823 that "uncertainty " created by a 
measure may constitute a restriction within the meaning of Article  XI:1.824 We agree with New 
Zealand that  there is inherent uncertainty in the reference price system for chillies  and shallots 
and that the setting of reference prices is opaque.825  
7.225.   Although not necessary to establish the limiting effect of Measure  7826, the parties have 
also addressed  its adverse impact on importation , relying on trade statistics and market price 
information to support their contention .827 Of particular interest to the Panel's analysis is 
Exhibit  IDN-31 providing the domestic and reference prices for big red chilli, curly red chilli and 
shallot, on a monthly basis. Responding to the Panel's inquiry as to the specific instances where 
the reference price system was actually triggered with respect to each covered product in the 
course of 2013 -2015, Indonesia merely stated that "the refer ence price system for chilli and 
shallot was in place in 2015 ".828 Thus, it is unclear to us if, and when, the system was actually 
triggered, which adds another element of unpredictability. Based on Exhibit IDN -31, the Panel can 
only observe the instances wh ere the domestic prices for big red and  curly red chillies and fresh 
shallots fell below the levels pre -determined by the Ministry of Trade, as reflected in the following 
graphs:  
                                                
820 Indonesia 's response to Panel question No.  35; United States' response to Panel question No. 11, 
citing Exhibit USA -31. 
821 Article 14B(3) of MOT 16/2013, as amended by MOT 47/2013, Exhibit JE -10. 
822 Indonesia 's second written submissi on, para. 255.  
823 New Zealand 's first written submission, para. 266 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.240).  
824 New Zealand 's first written submission, para. 266 (referring to Panel Report, Argentina – Import 
Measures , para. 6.260 ). 
825 New Zealand 's first written submission, para. 266 (referring to " Horticult ural Import Policy in 
Indonesia"  FFTC Paper , Exhibit NZL –59). 
826 See Section  7.2.3.2.2  above.  
827 Responding to Panel question No. 19(a) seeking monthl y import statistics in volume terms, Indonesia 
submits Exhibit IDN -29, which only provides annual import statistics of chillies and shallots for the 2009 -2014 
period. Monthly import statistics are only given for the first four months of 2015; See also  Exhibit USA -87 and 
Corr.1 (annual imports of listed fresh horticultural products in 2009 -2015, among which chillies and fresh 
shallots), showing that imports of chillies fell by 99% from 2011 to 2014 while imports of shallots fell by 53.5% 
during the same peri od, and by 90% from 2011 to 2015.  
828 Indonesia's  response to Panel question No.  37. WT/DS477/R • WT/DS478/R  
 
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Domestic and Reference Prices for Big  RED and Curly RED Chillies, 2012 -2015  (Rupees 
per kilogram)  
 
               
 
 
Domestic and Reference Prices for Fresh Shallot s, 2012 -2015 (Rupees per kilogram)  
                 
 
Source : Indonesia's res ponse to Panel question N o. 38. Exhi bit IDN -31 
 
7.226.   The evidence submitted by Indonesia confirms our conclusion that the design, architecture 
and revealing structure of Measure  7 and its resulting operation, have a limiting effect on 
importation into Indonesia.  
WT/DS477/R • WT/DS478/R  
 
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  7.2.11.3   Conclu sion 
7.227.   For the reasons stated above, we find that Measure  7 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.12   Whether Measure  8 (Six-month harvest requirement ) is inconsistent with 
Article  XI:I of the GATT 1994  
7.2.12.1   Arguments of the Parties  
7.2.12.1.1   New Zealand  
7.228.   New Zealand claims that the six -month harvest requirement  operates as a prohibition on 
imports of horticultural products and th erefore falls within the  scope of a prohibition or restriction 
contrary to Article XI:1 of the GATT 1994.829 New Zealand submits that Indonesia requires that 
imported fresh horticultural products must have been harvested less than six months 
previously.830 According to New Zealand, an RIPH may only be issued to an importer of 
horticultural products provided that a declaration to this effect is submitted as part of the 
application.831 If an importer is found to have made an incorrect statement in its RIPH application, 
an RIPH will not be  granted for one year, rendering  that importer unable to import horticultural 
products into Indonesia.832 New Zealand argues that the Appellate Body in China – Raw Materials  
considered that the term "prohibition " was a "legal ban on the trade or importation of a specified 
commodity "833, and the panel in US – Poultry (China)  found that the rule of the United States "had 
the effect of prohibiting the importation of poultry products from China ".834 Similarly, New Zealand 
argues that in Brazil – Retreaded Tyres , the measure at issue "operate[d] so as to prohibit " the 
importation of retreaded tyres.835  
7.229.   According to New Zealand, Indonesia appears to concede that its prohibition on the import 
of horticultural products harvested more than six months previously is a ban on importation, but 
argues that this requirement does not limit imports because imported products can be stored in 
Indonesia instead.836 For New Zealand, Indonesia fails to have regard to the meaning of the term 
"prohibition " in Article XI:1 of the GATT 1994 wh ich is considered by the Appellate Body to be a 
"legal ban on the trade or importation of a specified commodity ".837   
7.2.12.1.2   United States  
7.230.   The United States claims that Indonesia requires that all imported fresh horticultural 
products must have been harvested less  than six month s prior to importation and that this 
requirement is a restriction inconsistent with Article XI:1 of the GATT 1994.838 The United States 
also claims that this requirement is not a duty, tax, or other charge, and, therefore, is within the 
scope of Article XI:1.839 The United States submits that to obtain an RIPH, MOA 86/2013 , as 
amended, requires an RI to affirm that it will not import any fresh horticultural products that were 
harvested more than six months previously.840 The United States also subm its that Indonesia 
                                                
829 New Zealand 's first written submission, para. 2 70; second written submission, para. 276.  
830 New Zealand 's first written submission, para. 2 68 (referring to Article 8(1), MOA 86/2013 , Exhibit 
JE-15). 
831 New Zealand 's first written submission, para. 2 68 (referring to Article 8(1)(a), MOA 86/2013 , Exhibit 
JE-15). 
832 New Zealand 's first written submission, para. 2 68 (referring to Article 14, MOA 86/2013 , Exhibit 
JE-15). 
833 New Zeal and's first written submission, para. 2 69 (referring to Appellate Body Report, China – Raw 
Materials , para. 319).  
834 New Zealand 's first written submission, para. 2 69 (referring to Panel Report, US – Poultry (China) , 
para. 7.457).  
835 New Zealand 's first writ ten submission, para. 2 69 (referring to Panel Report, Brazil – Retreaded 
Tyres , para. 7.14 ). 
836 New Zealand 's second written submission, para. 2 76 (referring to Indonesia 's first written 
submission, paras. 88 and 150 -152).  
837 New Zealand 's second written sub mission, para. 2 76 (referring to Appellate Body Report, China – 
Raw Materials , para. 319).  
838 United States ' first written submission, para. 204; second written submission, para. 36.  
839 United States ' first written submission, fn. 342.  
840 United States ' first written submission, para. 204 (referring to Article 8 of MOA 86/2013  , Exhibit 
JE-15). WT/DS477/R • WT/DS478/R  
 
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  requires an RI to submit as part of its RIPH application a statement committing to follow the 
requirement, and if the RI violates this requirement, it will not be granted an RIPH or permitted to 
import horticultural products for one year .841 The United States argues that this requirement is a 
limitation or limiting condition on importation, or has a limiting effect on importation. The United 
States argues that the importer may not import products according to commercial considerations, 
but only those products meeting the requirement and that a failure to comply may further lead to 
the importer losing the right to import horticultural products for one year.842 The United States 
thus contends that the six -month harvest requirement constitutes a "restriction " within the 
meaning of Article XI:1.843 
7.231.   The United States further submits that the six -month harvest requirement  has a 
pronounced impact on those fresh horticultural products that can be stored for more than six 
months, such as apples, since the y can be stored in a controlled atmosphere after harvest, where 
they remain fresh for more than six months. The United States submits that , consequently, apples 
and certain other horticultural products can be shipped year -round to global markets844, but, under 
the six -month harvest requirement, RIs are effectively prohibited from importing apples from the 
United States into Indonesia from April to October.845 The United States submits that the panel in 
Turkey – Rice found, in the context of Article  4.2 of the A greement on Agriculture, that limiting the 
issuance of import permits based on specified harvest periods restricted importation and is a 
quantitative import restriction.846 The United States claims that , similarly, Indonesia's requirement 
imposes a limitatio n based on the time certain imported horticultural products were harvested thus 
having  a limiting effect on the quantity allowed into Indonesia.847 
7.2.12.1.3   Indonesia  
7.232.   Indonesia claims that the "harvest plus six months limitation " for fresh horticultural 
imports is n ot a restriction on imports within the meaning of Article XI:1 of the GATT 1994.848  
7.233.   Indonesia submits that, as importers are required to acquire storage facilities under its 
licensing regime, they may easily import goods within six months of harvest and the n store them 
locally for longer periods. Indonesia argues that the rationale behind this requirement lies in the 
need to ensure food safety, as having fresh horticultural products imported sooner allows 
Indonesian health authorities to inspect them to "ensure quality " instead of importing such goods 
at a later date "when it is impossible to verify that proper storage procedures have been 
followed ".849 Indonesia further argues that storing goods locally does not place any burden on 
importers as these goods wil l be stored "somewhere " and that it is highly likely that the price of 
storing such products would be "far less expensive " in Indonesia than in either the United States 
or New Zealand, where real estate prices are higher.850 
7.2.12.2   Analysis by the Panel  
7.234.   The task be fore the Panel is to establish whether, as claimed by the co -complainants, 
Measure  8 constitutes a restriction on importation inconsistent with Article XI:1 of the GATT 1994  
because  only horticultural products that have been harvested less than six months prior to 
importation  can be imported .  
7.235.   We com mence by noting that the co -complainants argue d that Measure 8 constitutes a 
restriction on importation851, and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.852 New Zealand argue d that the components of Indonesia's import 
licensing regime for animals, animal products and horticultural products, which include Measure 8, 
                                                
841 United States ' first written submission, para. 205; second written submission, para. 37.  
842 United States ' first written submission, para. 205 (referring to MOA 86/201 3, Exhibit JE -15). 
843 United States ' first written submission, para. 206.  
844 United States ' first written submission, para. 204 (referring to Controlled Atmospheric Storage, 
Washington Apple Commission, Exhibit. USA-34); second written submission, para. 37.  
845 United States ' first written submission, para. 207.  
846 United States ' first written submission, para. 208 (referring to Panel Report Turkey – Rice, 
para. 7.121).   
847 United States ' first written submission, para. 208.  
848 Indonesia 's first written submission , para. 152.  
849 Indonesia 's first written submission, para. 151  
850 Indonesia 's first written submission, para. 151.  
851 New Zealand 's first written submission, para. 258; United States ' first written submission, para. 192.  
852 New Zealand 's first written submiss ion, para. 258; United States ' first written submission, fn. 342.  WT/DS477/R • WT/DS478/R  
 
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  constitute prohibitions or restrictions made effective through an "import licence " or, alternative ly, 
an "other measure ".853 The United States submit ted that Article XI:1 applies to any "restriction, " 
including those "made effective through quotas, import or export licenses or other measures ."854 
7.236.   We observe that Indonesia has not contested the co -complaina nts' characterisation of 
Measure  8.855 Rather, it has responded that its measures a re outside the scope of Article  XI:1 
because they are automatic import licensing regimes.856 We recall our conclusion in 
Section  7.2.3.2.1 above whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  8 in Section 2.3.2.8 
above , we concur with the co -complainant s that Measure  8 is not a duty, tax, or other charge and 
it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.237.   As with the previous measures857, we proceed to examine whether the co -complainants 
have demonstrated that Measu re 8 prohibits or restricts trade, rather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure  8 has a limiting effect on 
import ation. To carry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  8, within its relevant context.   
7.238.   As described in Section 2.3.2.8 above , Measure  8 consist s of the requirement that all 
imported fresh horticultural products be harvested less than six months prior to importation.858 
Indonesia implements this measure by means of Article 8(1)(a) of MOA 86/2013 which establishes 
that to obtain an RIPH for fresh hor ticultural products, an RI must produce a statement committing 
not to import horticultural  products that were harvested more than six months prior to 
importation.  
7.239.   We observe that the co -complainants consider that Measure  8 is either a straight 
prohibition on importation (New Zealand) or a limitation or limiting condition on importation, or 
that it has a limiting effect on importation (United States).  For instance,  New Zealand claim ed that 
the six -month harvest requirement  operates as a prohibition on import s of horticultural 
products.859 New Zealand emphasi zed that an RIPH may only be issued to an importer of 
horticultural products provided that a declaration to this effect is submitted as part of the 
application860, and that if the importer is found to have mad e an incorrect statement, an RIPH will 
not be granted for one year, rendering importers ineligible  to import horticultural products into 
Indonesia.861  
7.240.   Similarly, the United States argued  that Measure  8 imposes a limitation based on the time 
certain imported  horticultural products were harvested and thus has a limiting effect on the 
quantity allowed into Indonesia.862 The United States also argued  that an importer may not import 
products according to commercial considerations, but only import those products mee ting such a 
requirement , and that non-compliance  may cause  the importer to lose  the right to import 
horticultural products for one year.863 The United States thus focused  on the limiting effect that 
Measure 8 has on competitive opportunities. The United Stat es further contended that Measure  8 
has a particularly  restrictive impact on those fresh horticultural products , such as apples,  that can 
be stored in a controlled atmosphere where they can remain fresh for more than six months.864 
Consequently, while apples  and certain other horticultural products can be shipped year -round to 
global markets, under Measure  8, RIs are effectively prohibited from importing apples from the 
                                                
853 New Zealand 's first written submission, para. 284.  
854 United States ' first written submission, para. 142.  
855 Indonesia 's response to Panel question No.  10. 
856 Indonesia 's second written submi ssion, para. 165.  
857 See, for instance, paragraph  7.76 above.  
858 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand 's first 
written submission, para. 111; United States ' first written submission, paras. 76 and 204.  
859 New Zealand 's first written submission, para. 270; second written submission, para. 276.  
860 New Zealand 's first written submission, para. 268 (referring to Article 8(1)(a) of  MOA 86/2013 , 
Exhibit  JE-15). 
861 New Ze aland 's first written submission, para. 268 (referring to Article 14 of  MOA 86/2013 , 
Exhibit  JE-15). This view is shared by the United States. See United States' first written submission, para. 205; 
second written submission, para. 37.  
862 United States' fir st written submission, para. 208.  
863 United States' first written submission, para. 205 (referring to MOA 86/2013, Exhibit JE -15). 
864 United States' first written submission, para. 204 (referring to Controlled Atmospheric Storage, 
Washington Apple Commission , Exhibit. USA -34); second written submission, para. 37.  WT/DS477/R • WT/DS478/R  
 
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  United States into Indonesia from April to October.865 The United States submit ted that the panel 
in Turkey – Rice found, in the context of Article  4.2 of the Agreement on Agriculture, that limiting 
the issuance of import permits based on specified harvest periods restricted importation and 
constitutes  a quantitative restriction.866 The United Stat es contended  that similarly, Indonesia's 
requirement imposes a limitation based on the time certain imported horticultural products were 
harvested and has a limiting effect on the quantity allowed into Indonesia.867 
7.241.   We observe that Measure  8 is designed to p rohibit the importation of all horticultural 
products that have been harvested more than six months prior to importation. To us, this is an 
absolute ban on these products that, as argued by  New Zealand868, falls squarely into the 
definition  of a "prohibition " under  Article XI:1 of the GATT 1994 .869 We note that New Zealand also 
drew the Panel's  attention to the panel report in US – Poultry (China)  where the measure at issue 
was found to have "the effect of prohibiting the importation of poultry products from Ch ina", and 
was thus found to be inconsistent with Article XI:1.870 Similarly, New Zealand argue d that in Brazil 
– Retreaded Tyres , the measure at issue "operate[d] so as to prohibit " the importation of 
retreaded tyres.871 We agree with the co -complainants that Measure  8 constitutes a 
straightforward import prohibition for products harvested more than six -months before, and, in 
this respect, it is inconsistent with Article XI:1 of the GATT 1994 .  
7.242.   We observe that Indonesia attempt ed to justify this Measure on food  safety grounds, in 
the sense that having fresh horticultural products imported sooner after harvest allows Indonesian 
health authorities to inspect the product to "ensure quality " instead of importing such goods at a 
later date "when it is impossible to v erify that proper storage procedures have been followed ".872 
Indonesia further argue d that storing goods locally does not place any burden on importers as 
these goods will be stored "somewhere " and t hat it is highly likely that the price of storing such 
products would be "far less expensive " in Indonesia than in either the United States or New 
Zealand, where real estate prices are higher.873 Whilst w e do not think that th ese are  valid 
argument s in terms of justifying an import ban , they would rather seem to bel ong to the realm of 
exceptions and not within our analysis under Article XI:1 of the GATT 1994 .  
7.2.12.3   Conclu sion 
7.243.   For the reasons stated above, we find that Measure  8 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architectu re and revealing structure,  it constitutes 
a prohibition on importation .  
7.2.13   Whether Measure  9 (Indonesia's import licensing regime for horticultural 
products as a whole ) is inconsistent with Article  XI:1 of the GATT 1994  
7.2.13.1   Arguments of the parties  
7.2.13.1.1   New Zealand  
7.244.   New Zealand claims that, in addition to each of the components of Indonesia's import 
licensing regime for horticultural products operating independently being inconsistent with Article 
XI:1, these trade restrictive requirements, viewed as a whole, are inco nsistent with Article XI:1 of 
the GATT 1994.874 New Zealand argues that , in Argentina – Import Measures, the panel and the 
Appellate Body considered whether individual trade restrictive requirements can constitute a single 
                                                
865 United States' first written submission, para. 207.  
866 United States' first written submission, para. 208 (referring to Panel Report Turkey – Rice, 
para.7.121).  
867 United States' first written submi ssion, para. 208.  
868 New Zealand 's first written submission, para. 2 69 (referring to Appellate Body Report, Argentina – 
Import Measures , para. 5.217 ( in turn, referring to Appellate Body Reports, China – Raw Materials , 
para. 319)). 
869 We recall that the Appe llate Body has defined this term as a "legal ban on the trade or importation of 
a specified commodity ". Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to the 
Appellate Body Reports, China – Raw Materials , para.  319). 
870 New Zeala nd's first written submission, para. 269 (referring to Panel Report, US – Poultry (China) , 
para. 7.457).  
871 New Zealand 's first written submission, para. 2 69 (referring to Panel Report, Brazil – Retreaded 
Tyres , para. 7.14 ). 
872 Indonesia 's first written subm ission, para. 151  
873 Indonesia 's first written submission, para. 151.  
874 New Zealand 's first written submission, para. 271; second written submission, para. 283.  WT/DS477/R • WT/DS478/R  
 
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  measure and stated that it is the m anner in which they operate in combination which determines 
the existence and content of a single measure.875 New Zealand argues that where different 
elements contribute in different combinations and degrees, as part of a single measure, to the 
realization  of a common policy objective, it would be artificial only to consider them individually.876 
New Zealand maintains that the present dispute is similar to the situation in Argentina – Import 
Measures  because the components of Indonesia's import licensing regime  constitute different 
elements that contribute towards Indonesia's policy objective of "self-sufficiency ". For New 
Zealand, it is not solely through individual and distinct measures, but through a regime with 
integrated components, that the true extent of the restrictive nature of the Indonesian import 
licensing regime can be seen.877  
7.245.   New Zealand further argues that Indonesia's import licensing regime as a whole has a 
limiting effect on imports stemming from the combined effects of individual measures, which  are 
themselves trade restrictive.878 New Zealand argues that this is due to two reasons: first, the 
import licensing regime for listed horticultural products restricts the opportunities to market 
imported horticultural products in Indonesia879, and second, In donesia restricts the volume of 
horticultural products that may be imported into Indonesia.880 New Zealand maintains that the 
various components of Indonesia's restrictive import licensing regime viewed individually and in 
combination create disincentives to  import. New Zealand submits that t he design of the import 
licensing regime is geared toward limiting the importation of horticultural products as part of an 
overarching policy objective of achieving "self-sufficiency " in certain foodstuffs.881 New Zealand 
argues that t hey fall within the analytical framework adopted by the panel in Argentina – Import 
Measures882 and, in this sense, the restrictive impact of the import licensing regime viewed 
collectively is greater than the sum of its parts.883 
7.246.   New Zealand submi ts that the components of Indonesia's import licensing regime for 
horticultural products, both when viewed as individual measures and as a single overarching 
measure, constitute restrictions made effective through an "import licence " or, alternatively, an 
"other measure " within the meaning of Article XI:1 of the GATT 1994.884 According to New 
Zealand, Indonesia's Importer Designations, RIPHs and Import Approvals, all fall within the 
ordinary meaning of the term "import licence " since an importer may not impor t products unless 
and until it has obtained the relevant Importer Designation, RIPH and Import Approval.885 New 
Zealand also submits that the other requirements imposed by Indonesia on the import of 
horticultural products, namely the storage ownership and ca pacity requirements, the restrictions 
on use, sale and distribution, the use of reference prices, and the six -month harvest requirement 
are all requirements which are "made effective " through import licences since they are inextricably 
linked to the import  licensing regime for horticultural products.886 
7.247.   New Zealand alternatively argues that , in any event, these requirements are "other 
measures " that fall within the scope of Article XI of the GATT 1994. New Zealand submits that the 
panel in US – Poultry (China ) summari zed the WTO and GATT jurisprudence on the notion of 
"other measures " concluding that the term encompasses a "broad residual category " and includes 
any type of measure, "irrespective of the legal status of the measure ".887  
7.248.   Responding to Indonesia's argument that the co -complainants "have failed to present 
sufficient pre - and post -implementation data " to support the argument that the regime as a whole 
                                                
875 New Zealand 's first written submission, para. 272 (referring to Panel Report, Argentina – Import 
Measures , paras. 6.223 -6.225).  
876 New Zealand 's first written submission, para. 272 (referring to Panel Report, Argentina – Import 
Measures , para. 6.228).  
877 New Zealand 's first written submission, para. 273. 
878 New Zealand 's first written submission, para. 274. 
879 New Zealand 's first written submission, para. 274. 
880 New Zealand 's first written submission, para. 274. 
881 New Zealand 's first written submission, para. 275. 
882 New Zealand 's first written submission, para. 275 (referring to Panel Report, Argentina – Import 
Measures , para. 6.474).  
883 New Zealand 's first written submission, para. 275. 
884 New Zealand 's first written submission, para. 278.  
885 New Zealand 's first written submission, para. 280.  
886 New Zealand 's first written submission, para. 281.  
887 New Zeala nd's first written submission, para. 283 (referring to Panel Report, US – Poultry (China) , 
para. 7.450).  WT/DS477/R • WT/DS478/R  
 
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  restricts imports of horticultural products888, New Zealand argues that Indonesia has again sought 
to rely on a false premise that quantification of trade effects is necessary for a breach of 
Article  XI:1 to be found.889  
7.2.13.1.2   United States  
7.249.   The United States claims that the Indonesian import licensing regime is a "restriction " 
within the meaning of Article XI:1 of  the GATT 1994, and that Indonesia breaches Article XI:1 by 
instituting or maintaining this regime. The United States argues that Indonesia's import licensing 
regime for horticultural products serves as a limitation or limiting condition on importation, or  has 
a limiting effect on importation. The United States argues that an importer must comply with all 
aspects of the regime to import and importation is not undertaken according to commercial 
considerations but in relation to the requirements and condition s imposed by the regime that 
distort or frustrate those commercial considerations. 890  
7.250.   For the United States, the various import require ments as maintained through 
MOT 16/2013, as amended by MOT 47/2013, and MOA 86/2013891, when operating in 
combination, have  the effect of both directly limiting imports and creating disincentives for 
importers to import the type and amount of horticultural products they otherwise would if acting 
according to commercial considerations. The design and structure of these requirem ents ultimately 
aims to achieve the policy goals set forth in the statutory framework: to "provide protection for 
national horticultural farmers, business players, and consumers "892 and to prohibit importation 
"when the availability of domestic Agricul tural Commodities is sufficient ".893 
7.2.13.1.3   Indonesia  
7.251.   Indonesia claims that the co -complainants have failed to establish that any of the 
component s of Indonesia's import licensing regime for horticultural products constitute 
"restrictions " on imports and therefore Indone sia's import licensing regime as a whole is not a 
"restriction " within the meaning of Article XI:1 of the GATT 1994.  
7.252.   Indonesia also claims that its import licensing for certain horticulture products is 
automatic, pursuant to Article 2 of the Import Licensi ng Agreement .894 For Indonesia, automatic 
import licensing is expressly permitted under Article 2.2(a) of  the Import Licensing Agreement  and 
therefore excluded from the scope of Article XI:1 of GATT 1994.895 Indonesia contends that it has 
repeatedly submitted that no application of Import Approval has ever been rejected for certain 
horticulture products provided that all legal requirements set fort h under MOT 16/2013 or 
MOT 71/2015 have been fulfilled by the i mporters in their application s. For Indonesia, no RI PH 
applications have ever been rejected for certain horticulture products provided that all legal 
requirements set forth under MOA 86/2013 have been fulfilled by the importers in their 
application s.896 Indonesia argues that this shows that its import licensi ng for certain horticulture 
products implemented through RIPH and Import Approvals have been granted in all cases 
pursuant to Article 2(1) of Import Licensing Agreement  and that the co -complainants have failed 
to submit any evidence indicating that an RIPH  or Import Approval application was rejected when 
fulfilling all legal requirements.897 
7.253.   Indonesia further contends that its import licensing for certain horticulture products 
implemented through RIPHs and Import Approvals  is not administered in such a manner  as to 
have restricting effects on imports subject to automatic licensing pursuant to Article  2 (2)(a) 
                                                
888 New Zealand 's second written submission, para. 284 (referring to Indonesia 's first written 
submission, para. 95).  
889 New Zealand 's second written subm ission, para. 284.  
890 United States ' first written submission, para. 216. 
891 United States ' first written submission, para. 211.  
892 United States ' first written submission, para. 215 (referring to Article 3 of  the Horti culture Law, 
Exhibit  JE-1). 
893 United Sta tes' first written submission, para. 215 (referring to Article 30 of the Fa rmers Law, 
Exhibit  JE-3). 
894 Indonesia 's second written submission, paras. 44 and 66.  
895 Indonesia 's second written submission, para. 67.  
896 Indonesia 's second written submission, para . 47 (referring to Indonesia 's first written submission, 
paras. 63 and 176; Indonesia 's opening statement during the first substantive meeting, para. 18; Indonesia 's 
responses to Panel 's Questions No.  8 and 52 ). 
897 Indonesia 's second written submission, par as. 50 and 51.  WT/DS477/R • WT/DS478/R  
 
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  because it complies with the elements of this provision.898 For Indonesia, t he co -complainants 
have not alleged that its import licensing limits the person , firm, or institution that is eligible to 
apply for and obtain an import licence because any person, firm or institution is equally eligible to 
apply for and obtain import licences.899 With respect to the timing of applications, Indonesia 
contends that  pursuant to  Article 8(1) of MOT 71/2015 for certain horticultural products, Import 
Approvals must be granted within two working days and that pursuant to Article 12(1) of MOA 
86/2013 for certain horticultural products RIPHs  must be granted within seven  workin g days.900 
7.254.   Responding to the co -complainants' argument that Indonesia's import licensing for certain 
horticultur al products is not automatic because the applications for licences cannot be submitted 
on any working day prior to customs clearance and because t his application window requirement 
has a restricting effect on imports901, Indonesia contends that this narrow interpretation of 
Article  2(2)(a)(ii) of the Import Licensing Agreement  is incorrect for two reasons.902 First, the co -
complainants erred in contendi ng that the existence of the application windows to apply for RIPH 
and Import Approvals for certain fresh horticultural products is inconsistent with Article 2 (2)(a)(ii) 
of the Import Licensing Agreement  and therefore Indonesia's import licensing for all horticultural 
products are not automatic. Indonesia explains that the application window for Import Approvals is 
not applicable for fresh chillies  and shallots, processed horticultural products, and for fresh 
horticulture imports to be used as raw material s for API -P holders.903 Second, Indonesia disagrees 
with the co -complainants' broad interpretation of Article 2(2)(a)(ii) of  the Import Licensing 
Agreement , whereby an import licence application must be accepted on any working day prior to 
customs clearance,  with indefinite time.904 For Indonesia, Article 2(2)(a)(ii) of  the Import Licensing 
Agreement  must be seen in conjunction with Article 1(6) of Import Licensing Agreement , which 
acknowledges that an application window for import licensing application procedu res is allowed 
under  the Import Licensing Agreement . Indonesia contends that it allows  15 working days for the 
application window to apply for  RIPH for horticultural products , a one -month window to apply for 
an MOA Recommendation for animal products , and a  one-month  window for Import Approval 
applications. For Indonesia, this is already in line with Article 1(6) of the Import Licensing 
Agreement .905 
7.255.   Indonesia also contends that, even if its import licensing regime for horticulture products is 
considered to fa ll within the scope of Article 4.2 of the Agre ement on Agriculture or Article  XI:1 of 
GATT 1994, the design, architecture, and revealing structure of Indonesia's import licensing 
regime as a whole is not a "quantitative restriction ".906 Indonesia submits tha t not every condition 
or burden placed on importation or exportation will be inconsistent with Article XI but only those 
that are limiting, that is, those that limit the importation of products are inconsistent with 
Article  XI and this limitation need not be demonstrated by quantifying the effects of the measure 
at issue, but rather, such limiting effects can be demonstrated through the design, architecture, 
and revealing structure of the measure at issue considered in its relevant context.907 For 
Indonesia, a complainant must show through clear and convincing evidence that the measure at 
issue has a "limiting effect on importation ". According to Indonesia, just because Article XI:1 does 
not require precise quantification of the trade effects of a challenged m easure does not mean that 
a complainant is excused from demonstrating that the measure has some effect on trade.908 
According to Indonesia, the co -complainants have failed to present sufficient pre - and post - 
implementation import data to support the asserti on that its import licensing regime for 
horticultural products "as a whole " operates to restrict the quantity of imports.  Indonesia 
maintains that  there is no reason to believe there is a causal connection between the slowing of 
imports in the middle of th e year, as presented by New Zealand909 and the application windows 
and validity periods for Indonesia's import licences. Indonesia argues that, on the contrary, it has 
                                                
898 Indonesia 's second written submission, para. 52.  
899 Indonesia 's second written submission, para. 53.  
900 Indonesia 's second written submission, para. 54.  
901 Indonesia 's second written submission, para. 66 (referring to  United States ' first written submission , 
paras . 386-387 and New Zealand 's first written submission, paras . 423-426).  
902 Indonesia 's second written submission, para. 55.  
903 Indonesia 's second written submission, para. 57 (referring to Article 12 of MOT 71/2015, Exhibit 
IDN-9). 
904 Indonesia 's second written submission, para. 59.  
905 Indonesia 's second written submission, paras. 64 -65. 
906 Indonesia 's second written submission, para. 68.  
907 Indonesia 's second written submission, para. 70 (referring to Appellate Body Reports, Argentina – 
Import Measures , para. 5.217).  
908 Indonesia 's second written submission, para. 71.  
909 Indonesia 's second written submission, para. 73 (referring to New Zealand 's first written submission, 
Annex 5 ). WT/DS477/R • WT/DS478/R  
 
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  shown that  the complainants' market share increased for certain horticultural products, bo th fresh 
and processed.910 
7.2.13.2   Analysis by the Panel  
7.256.   The task before the Panel is to establish whether, as claimed by the co -complainants, 
Measure  9, i.e. Indonesia's import licensing regime for horticultural products as a whole , is 
inconsistent with Article XI: 1 of the GATT  1994. In particular, we are to determine whether 
Measure  9 has a limiting effect on importation  as a result of the combined operation of the 
different requirements that compose Indonesia's import licensing regime for horticultural products.  
7.257.   We com mence by observing that the co -complainants argue d that Measure 9 constitutes a 
restriction on importation911, and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.912 New Zealand argue d that the components  of Indonesia's import 
licensing regime for animals, animal products and horticultural products, which include Measure  9, 
constitute prohibitions or restrictions made effective through an "import licence " or, alternatively, 
an "other measure ".913 The United States submit ted that Article XI:1 applies to any "restriction, " 
including those "made effective through quotas, import or export licenses or other measures "-914 
7.258.   We observe that Indonesia has not contested the co -complainants' characterisation of 
Measure  9.915 Rather, it has responded that its measures a re outside the scope of Article  XI:1 
because they are automatic import licensing regimes.916 We recall our conclusion in Section 
7.2.3.2.1  above whereby automatic impor t licensing procedures do not fall per se  outside the 
scope of Article XI:1 of the GATT 1994. Given the description of Measure  9 in Section  2.3.2.9 
above , we concur with the co -complainants that Measure  9 is not a duty, tax,  or other charge and 
it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.259.   As with the previous measures917, we proceed to examine whether the co -complainants 
have demonstrated that Measure  9 prohibits or restricts trade, r ather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure  9 has a limiting effect on 
importation .  
7.260.   As described in Section 2.3.2.9 above , Measure 9 consists of Indonesia's import licensing 
regime for horticultural products, as maintained through MOT 16/2013 , as amended  by 
MOT 47/2013 , and MOA 86/2013 , as a whole.918 We understand that Measure  9, as de scribed by 
the co -complainants, consists of the ensemble of Measures 1 through  8 and would therefore not 
include requirements pertaining to Indonesia's import licensing regime for horticultural products, 
other than those encompassed in Measures  1 through 8 .919 We further understand that the co -
complainants are challenging Indonesia's import licensing regime for horticultural products as a 
whole on grounds that it is distinct from Measures 1 through 8, inasmuch as it relates to the 
combined effect and operatio n of those measures to achieve certain policy goals.920 
7.261.   In this respect, New Zealand argued that  it is not solely through individual and distinct 
measur es, but through a regime with integrated components, that the true extent of the restrictive 
nature of the  Indonesian import licensing regime for horticultural products  can be perceived .921 For 
New Zealand, the various distinc t requirements are cumulatively more restrictive than the sum of 
each of the individual requirements due to the way in which the requireme nts interact with each 
other.922 New Zealand argued  that this is due to two reasons: first, the import licensing regime for 
                                                
910 Indonesia 's second written submission, para. 74 (referring to Indonesia 's first written submission, 
para. 1 78). 
911 New Zealand 's first written submission, para. 276; United States ' first written submission, para. 210.  
912 New Zealand 's first written submission, para. 284; United States ' first written submission, fn. 347. 
913 New Zealand 's first written submission, para. 278.  
914 United States ' first written submission, para. 142.  
915 Indonesia 's response to Panel question No.  10. 
916 Indonesia 's second written submission, para. 165.  
917 See, for instance, paragraph  7.76 above.  
918 New Zealand 's Panel Request, pp. 1 -4; United States ' Panel Request, pp. 1 -4; New  Zealand 's first 
written submission, para.  274; United  States ' first written submission, para. 211.  
919 See for instance New Zea land's opening statement at the second substantive meeting, para. 27 . 
920 New Zealand 's first written submission, para. 273; United States ' first written submission, para.  215; 
Indonesia 's response to Panel question No.  82. 
921 New Zealand 's first written subm ission, para. 273; response to Panel question No.  82, para. 20.  
922 New Zealand's first written submisison, para. 275; response to Panel question No. 82 . WT/DS477/R • WT/DS478/R  
 
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  listed horticultural products restricts the opportunities to market imported horticultural products in 
Indonesia923, and second, Indones ia restricts the volume of horticultural products that may be 
imported into Indonesia.924 New Zealand maintained  that the various components of Indonesia's 
restrictive import licensing regime viewed individually and in combination create disincentives to 
import. For New Zealand,  the design of the import licensing regime is geared toward limiting the 
importation of horticultural products as part of an overarching policy objective of achieving "self-
sufficiency " in certain foodstuffs.925 
7.262.   The United States was also of the same view and explained  that the various import 
requirements as maintained through MOT 16/2013, as amended by MOT 47/2013, and 
MOA 86/2013926, when operating in combination, have the effect of both directly limiting imports 
and creating disincentive s for importers to import the type and amount of horticultural products 
they otherwise would if acting according to their commercial considerations. For the United States, 
the design and structure of these requirements ultimately aims to achieve the policy  goals set 
forth in the statutory framework: to "provide protection for national horticultural farmers, business 
players, and consumers "927 and to prohibit importation "when the availability of domestic 
Agricultural Commodities is s ufficient. "928  
7.263.   Indonesia 's main contention is that its import licensing regime for horticultural products, 
animals, and animal products is an automatic import licensing regime expressly permitted under 
Article  2.2(a) of Import Licensing Agreement  and therefore, excluded from the sco pe of 
Article  XI:1 of GATT 1994.929 Indonesia also contend ed that, even if it is considered to fall within 
the scope of Article XI:1 of GATT 1994, the design, architecture, and revealing structure of 
Indonesia's import licensing regime as a whole is not a "quantitative restriction ".930 Indonesia 
submit ted that not every condition or burden placed on importation or exportation will be 
inconsistent with Article XI but only those that are limiting, that is, those that limit the importation 
of products are inconsis tent with Article XI and this limitation need not be demonstrated by 
quantifying the effects of the measure at issue, but rather, such limiting effects can be 
demonstrated through the design, architecture, and revealing structure of the measure at issue 
considered in its relevant context.931 For Indonesia, a complainant must show through clear and 
convincing evidence that the measure at issue has a "limiting effect on importation ", and,  just 
because Article XI:1 does not require precise quantification of the trade effects , this does not 
mean a complainant is excused from demonstrating that the challenged measure has some effect 
on trade.932 According to Indonesia, the co -complainants have failed to present sufficient pre - and 
post-implementation import data to s upport the assertion that its import licensing regime for 
horticultural products "as a whole " operates to restrict the quantity of imports.933 
7.264.   We observe that central to the co -complainants ' contention that M easure  9 is inconsistent 
with Article XI:1 of the GATT 1994 is their argument relating to the manner in which the different 
requirements operate in combination934 and how the restrictive effect of each of the components of 
Indonesia's import licensing regime  for horticultural products is exacerbated when co mbined.935 
Their view is that Measures  1 to 8 are cumulatively more restrictive than the sum of each of the 
individual requirements due to the way in which the requirements interact with each other.936 
7.265.   We consider that the co -complainants' challenge to Indones ia's import licensing system for 
horticultural products, as a whole, can be more easily understood from the standpoint of an 
                                                
923 New Zealand 's first written submission, para. 274. 
924 New Zealand 's first written submission, para. 274. 
925 New Zealand 's first written submission, para. 275. 
926 United States ' first written submission, para. 211.  
927 United States ' first written submission, para. 215 (referring to Article 3 of the Horticulture Law,  
Exhibit JE –1). 
928 United States ' first written  submission, para. 215 (referring to Article 30 of the Farmers Law, Exhibit 
JE–3). 
929 Indonesia's second written submission, para.  67. 
930 Indonesia's second written submission, para. 68.  
931 Indonesia's second written submission, para. 70 (referring to Appella te Body Reports, Argentina – 
Import Measures , para. 5.217 ). 
932 Indonesia's second written submission, para. 71.  
933 Indonesia's second written submission, para. 74 (referring to Indonesia 's first written submission, 
para. 1 78). 
934 New Zealand 's first written s ubmission, para.  272; United States ' first written submission, para. 215 . 
935 New Zealand 's first written submission, paras. 198 -202 an d 271 –277; response to Panel question 
No. 82. 
936 United States ' response to Panel question No.  82, paras. 15 -16. WT/DS477/R • WT/DS478/R  
 
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  importer wishing to import horticultural products into Indonesia. As described in Section 2.2.2.1 
above and illustrated in Annex E -1, this importer has to navigate within the confines of a number 
of requirements and procedures before it can effectively obtain all the necessary approvals and 
documents to import products into Indonesia. Among these requir ements and procedures, the 
importer will need to comply with those encompassed in Measures 1 through 8. The design, 
architecture and revealing structure of Indonesia's import licensing regime for horticultural 
products as a whole is such that it is not eno ugh for the importer to comply with one of the 
requirements; it will need to comply with all of them to be able to import into Indonesia. We thus 
agree with the co -complainants that the various requirements and procedures constituting 
Indonesia's import li censing regime for horticultural products are intrinsically related and 
intertwined.  
7.266.   As we have previously found, Measures 1 through 8 impose several restrictions and 
prohibitions on importation that not only limit the quantity of horticultural products t hat can be 
imported into Indonesia, sometimes  imposing an absolute ban, but also affect the competitive 
opportunities of imported products, increase the costs associated with importation, affect the 
investment plans of importers, cause uncertainty in the i mportation business, and create 
incentives among  importers to limit the amounts they effectively import. Although each of these 
measures is a prohibition or restriction under  Article XI:1 of the GATT 1994 i n its own right, we 
observe that the restrictive e ffects of each measure are co mpounded once they are seen as  part of  
a system because they are interrelated and do not work in isolation.  
7.267.   For instance,  as explained in paragraphs 7.111  and 7.131 above , Measure  2, which 
prohibits changes to RIPHs and Import Approvals throughout their validity periods, exacerbates 
the limiting effects of Measure  3 (80% realization requirement), and Measure  5 (storage ownership 
and capacity requirements) by taking  away flexibility from importers to respond to changing 
circumstances and to be able to comply with these requirements. Also, as described in paragraph 
7.131 above , Measure 3 and Measure 7 (Reference price for chillies and s hallots) mutually 
reinforce each other's restrictive effects because importers may need to import large quantities of 
products during short periods of time in order to comply with the 80% realization requirement, but 
this may trigger the activation of the reference price because the market will have an increased 
supply that may cause prices to drop. Also, the limiting effects of Measure  5937 are amplified by 
Measure 1 (Application windows and validity periods) because importers have to wait for until the 
next validity period before they can request additional quantities in case they decide to increase 
their storage capacity.  
7.268.   This amplified or exacerbated limiting effect deriving from the inherent interaction of 
Measures  1 through 8 in practice needs to be con sidered by importers when taking import -related 
decisions. This logically will lead to situations where the simultaneous application of these 
requirements, for instance, the activation of the reference price system (Measure 7), the existence 
of seasonal re strictions as a consequence of Indonesia's harvest period  requirement (Measure 4) 
or the six month harvest requirement  (Measure 8) , may impose significant limitations as to the 
quantities or costs associated with importation. We can reasonably understand h ow by the end of 
an importation process, and after having tried to comply with the numerous trade -restrictive 
requirements imposed by Indonesia through Measures 1 through 8, an importer's ability to import 
can be severely impaired, if not impeded, and the importer itself may be materially discouraged 
from undertaking any business in Indonesia. In  this sense, we agree with New Zealand that 
Indonesia’s import licensing regime for horticultural products is characterized by an overall 
environment which is unfav ourable  to imports and importers, impos ing strong disincentives for 
commercial operators to conduct importation and affect importer's investment plans .938 
Indonesia's argumentation either under the Import Licensing Agreement or that evidence of trade 
effects  from the co -complainants  is required939 does not change the above conclusion .  
7.269.   It thus seems to us that, as evidenced through its design, architecture and revealing 
structure, the limiting effect of each of the challenged components constituting Measure  9 is 
compounded or exacerbated as a result of their inherent interaction as part of Indonesia's import 
licensing regime as a whole.  
                                                
937 See parag raph 7.175 .  
938 New Zealand 's first written submission, para. 202 (referring to Meat Industry Association Statement, 
p. 8, Exhibit NZL -12); second written submission, para. 1 72 (referring to European Union 's first opening 
statement, paras. 4 -5; Australia 's third party written submission, para. 60).  
939 Indonesia 's second written submission, para. 71.  WT/DS477/R • WT/DS478/R  
 
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  7.2.13.3   Conclu sion 
7.270.   For the reasons stated above, we find that Measure  9 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.14   Whether Measure  10 (Prohibition of importation of certain animals and animal 
products) is inconsistent with Article  XI:I of t he GATT 1994  
7.2.14.1   Arguments of the parties  
7.2.14.1.1   New Zealand  
7.271.   New Zealand claims that Indonesia uses a "positive list " system to prohibit all imports of 
bovine offal and certain forms of manufacturing meat and , except where emergency circumstances 
exist, bovine carcas s and secondary cuts and  that th is is inconsistent with Article  XI:1 of the GATT 
1994. New Zealand argues that because these products are not listed in Appendix I of MOA 
139/2014, they are ineligible to obtain an MOA Recommendation  (and therefore an Import  
Approval, which requires an MOA Recommendation as a prerequisite).940 New Zealand claims that, 
as a consequence of being unable to obtain MOA Recommendations and Import Approvals, 
importers are prohibited from importing these products , contrary to Article X I:1.941 
7.272.   New Zealand argues that in Brazil – Retreaded Tyres, the panel stated that the meaning of 
the term "prohibition " in Article XI:1 required that "Members shall not forbid the importation of 
any products of any other Member into their markets "942 and that  the panel in that dispute 
confirmed that a prohibition on the issuance of import licences necessary for the importation of 
retreaded tyres was inconsistent with Article XI:1.943 New Zealand claims that , for similar reasons, 
Indonesia's ban on imports of bov ine offal and certain forms of manufacturing meat is inconsistent 
with Article XI:1.944 New Zealand submits that while it is not necessary to demonstrate the 
existence of actual negative trade effects resulting from these measures945, the prohibition on 
import ation of bovine offal (except tongue and tail) has severely limited Indonesian imports of 
these products. In particular, New Zealand argues that the quantity of edible bovine offal imported 
into Indonesia in the first six months of 2015 represented only 5%  of the quantity imported in the 
same period in 2010.946 
7.273.   Responding to Indonesia's argument that it "does not maintain a 'positive list' of animal 
product imports " and that the requirements to obtain MOA Recommendations and Import 
Approvals "do not apply " to unlisted products947, New Zealand contends  that this is not supported 
by Indonesian laws, regulations, or the supplementary evidence provided by the co -complainants 
confirming the existence of the positive list. For New Zealand, Article 2(2) of MOT 46/2013 states 
that "[t]he types of Animals and Animal Products that can be im ported are included in Appendix  I 
and Appendix II "948 and Appendix I of MOA 139/2014, which list the types of bovine meat, carcass 
and offal that are permitted to be imported, is entitled "Bovine meat that can be imported into the 
territory of the Republic of Indonesia ".949 New Zealand argues that as described by the co -
complainants, animals and animal Products are defined broadly in the relevant Indonesian 
regulations, and inter alia  include  all edible meat, carcass, offal and other processed meat 
                                                
940 New Zealand 's first written submission, para s. 131  and 135 (referring to Article 2(2) of  MOT 
46/2013 , Exhibit JE -18). 
941 New Zealand 's first written submission, para s. 131 and 135 . 
942 New Zealand 's first written submission, para. 133 (referring to Panel Report, Brazil – Retreaded 
Tyres , para. 7.11).  
943 New Zealand 's first written submission, para. 133 (referring to Pan el Report, Brazil – Retreaded 
Tyres , para. 7.15).  
944 New Zealand 's first written submission, para. 133 (referring to Panel Report, Brazil – Retreaded 
Tyres , para. 7.11).  
945 New Zealand 's first written submission, para. 134 (referring to Panel Report, Argenti na — Hides and 
Leather , paras. 11.20 -11.21),  
946 New Zealand 's first written submission, para. 134 (referring to "Indonesia Import Statistics From all 
countries 2010 -2015" Global Trade Atlas  Exhibit , NZL-4). 
947 Indonesia 's first written submission, paras. 34,  96 and 164. See also  Indonesia 's first opening 
statement, para. 2 6, stating that "animals and animal products not listed in Appendix I and II [of MOT 
46/2013 ] are simply exempt from the requirements of that regulation ". 
948 New Zealand 's second written subm ission, para. 30.  
949 New Zealand 's second written submission, para. 30.  WT/DS477/R • WT/DS478/R  
 
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  products.950 For New Zealand, therefore, Indonesia's laws are clear that unlisted meat, carcass, 
offal and other processed meat products are not permitted for importation.951 
7.274.   New Zealand notes that Indo nesia does not refer at all to the Ministry of Agriculture 
disciplines in MOA 139/2014 and that, as noted in its first written submission, MOA 139/2014 and 
MOT 46/2013 collectively  prescribe a "positive list " of the meat, offal, carcass and processed meat 
products that are permitted to be imported.952 New Zealand contends that products not listed in 
Appendix I of MOA 139/2014 cannot obtain an MOA Recommendation  or an Import Approval953 
and that Indonesia has not explained how products not listed in MOA 139/2014  are able to obtain 
MOA Recommendations and Import Approvals.954 New Zealand further contends that Indonesia's 
own statements to the Panel confirm that certain unlisted products are prohibited. New Zealand 
refers to responses to the Panel's questions where I ndonesia acknowledges that "certain beef offal 
products (specifically, heart and liver) " are not permitted to be imported.955 Bovine heart and liver 
are both unlisted in the relevant regulations and Appendices.956 For example, in its response to 
Panel question  No. 1.2, Indonesia acknowledges that all animals and animal products (including 
unlisted animals and animal products) are required to "comply with all other food laws and 
regulations " including inter alia  Law 18/2009 as amended by Law 41/2014.957 According to New 
Zealand, this directly contradicts Indonesia's contention that the requirements to obtain MOA 
Recommendations and Import Approvals "do not apply " to unlisted products958 thus reinforcing the 
fact that meat, offal, carcass and processed products that a re not listed in the Appendices to either 
MOT 46/2013 or MOA 139/2014 are ineligible for importation.959 
7.275.    New Zealand points to its submission of a range of other evidence in support of its claim 
regarding the existence of the positive list, including trade data demonstrating the substantial drop 
in offal imports in 2015 as a consequence of the total ban on bovine offal imports (except tongue 
and tail) through MOA 139/2014960; data demonstrating the substantial reduction in Indonesian 
imports of fresh and froze n beef in 2015 as a consequence of the ban on importation of bovine 
secondary cuts961; and data demonstrating the severe drop in total Indonesian imports of bovine 
meat962 and offal963 since 2010.   
7.276.   According to New Zealand, the only circumstance where imports o f bovine carcass and 
beef secondary cuts are permitted is when the Indonesian Government directs Indonesian state-
owned enterprises to conduct importation of these products.964 According to New Zealand, the 
relevant regulations only permit  directions to the state-owned enterprises to  import to be made by 
Indonesian ministers where (i) certain emergency conditions exist (namely a lack of food 
availability or an animal disease outbreak, price volatility or inflation, or a natural disaster);965 
                                                
950 New Zealand 's second written submission, para. 30.  
951 New Zealand 's second written submission, para. 30.  
952 New Zealand 's second written submission, para. 31.  
953 New Zealand 's first wri tten submission, para. 38 and fn. 63 –65; second written submission, para. 31.   
954 New Zealand 's second written submission, para. 31.  
955 New Zealand 's second written submission, para. 32 (referring to Indonesia 's response to the Panel 
question No. 1.2 , para.  25). 
956 See List of bovine meat and offal products and their eligibility for importation into Indonesia (Exhibit 
NZL-22). 
957 Indonesia 's responses to Panel q uestion  No. 1.2, para. 25.  
958 Indonesia 's first written submission, paras. 34, 96 and 164.  
959 New Zeal and's second written submission, para. 33.  
960 New Zealand 's second written submission, para. 34 (referring to Exhibit NZL -4 and New  Zealand 's 
first written submission, para. 134).  
961 New Zealand 's second written submission, para. 34 (referring to Exhibits N ZL-4, NZL -5; 
New Zealand 's first written submission, paras. 3 -4, 24 and Figure 1; New  Zealand 's first opening statement, 
Figure 7).  
962 New Zealand 's second written submission, para. 34 (referring to Exhibit NZL -87).   
963 New Zealand 's second written submissi on, para. 34 (referring to Figures A and B of Annex 1 and 
Exhibit NZL -87).  
964 New Zealand 's first written submission, para. 137 (referring to Articles 23(3) and (4), 
MOA 139/2014 , as amended, Exhibit JE -28). 
965 New Zealand 's first written submission, para. 137 (referring to Articles 23(3) and (4), 
MOA 139/2014 , as amended, Exhibit JE -28).  WT/DS477/R • WT/DS478/R  
 
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  (ii) approval is ob tained by a second Minister966; and (iii) MOA Recommendations and Import 
Approvals are issued to the state-owned Enterprise which receives the ministerial direction.967 
7.277.   New Zealand submits that prohibiting imports except in these exceptional circumstances 
acts as a limitation on the opportunities for importation of bovine carcass and beef secondary cuts 
since importers, including state-owned enterprises, may not even  apply for licences  for bovine 
carcass and beef secondary cuts of their own volition and the res ulting effect is that imports are 
not permitted at all in ordinary circumstances.968 New Zealand argues that even if Indonesian 
ministers, in exceptional circumstances, permit importation of bovine carcass and beef secondary 
cuts by state-owned enterprises, the measure still constitutes a violation of Article XI:1.969 
According to New Zealand, the restrictions imposed on the importation of bovine carcass and beef 
secondary cuts are analogous to those considered in China – Raw Materials  in that there is no 
certainty that imports of bovine carcass and beef secondary cuts will be permitted by the 
Indonesian Government.970 New Zealand contends that the uncertainty created by the limited 
circumstances in which imports of bovine carcass and secondary cuts may be directe d to be 
imported has a similar limiting effect to that described in Argentina – Import Measures : exporters 
and other economic actors are unable to predict if, or when, they will be permitted to export 
bovine carcass and beef secondary cuts to Indonesia971 and this leaves exporters unable to plan in 
advance, causing them to reduce their planned exports to Indonesia.972 
7.2.14.1.2   United States  
7.278.   The United States claims that Indonesia's import licensing regime bans the importation of 
certain animals and animal products by al lowing the importation only of those products listed in 
the appendices to its import licensing regulations and that this b an is inconsistent with Article  XI:1 
of the GATT 1994 since it is a prohibition within the meaning of Article XI:1.973 Additionally, the  
United States claims that this requirement is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.974 The United States argues that MOT 46/2013, as amended, and 
MOA 139/2014, as amended, list all the types of animals and an imal products "that can be 
imported " into Indonesia975, and that numerous types of animals and animal products are not 
listed in the appendices to these regulations, including chicken cuts and parts (frozen and fresh or 
chilled) and secondary cuts of beef.976 The United States maintains that because applications for 
Recommendations or Import Approvals to import animals or animal products that are not listed in 
the appendices of both regulations will not be granted, and because importers are prohibited from 
importing animals and animal products not specified on a valid Recommendation and Import 
Approval977, animals and animal products not listed in the mentioned appendices are therefore 
banned.978  
7.279.   The United States submits that Indonesia's import licensing regulatio ns for animals and 
animal products impose a ban on the importation of any animal or animal product that is not listed 
in the appendices of both MOT 46/2013 and MOA 139/2014 and that this falls under the purview of 
the term "prohibition " in Article XI:1 of the GATT 1994.979 The United States refers to the panel in 
US – Poultry (China)  and argues that in that case it was concluded that the challenged measure 
was a prohibition inconsistent with Article XI:1 because the measure at issue "had the effect of 
                                                
966 New Zealand 's first written submission, para. 137 (refer ring to Articles 23(3) and (4) of 
MOA 139/2014 , as amended, Exhibit JE -28). 
967 New Zealand 's first written submiss ion, para. 137 (ref erring to Article 18(2) of  MOT 46/2013, Exhibit 
JE-18). 
968 New Zealand 's first written submission, para. 139.  
969 New Zealand 's first written submission, para. 141.  
970 New Zealand 's first written submission, para. 142 . 
971 New Zealand 's first written submission, para. 145 (referring to Meat Industry Association Statement, 
p. 7, Exhibit NZL -12). 
972 New Zealand 's first written submission, para. 131 (referring to Panel Report, Argentina – Import 
Measures , para. 6.260).  
973 United States ' first writte n submission, para. 258; second written submission, para.  87. 
974 United States ' first written submission, fn. 384.  
975 United States ' first written submission, para. 260.  
976 United States ' first written submission, para. 154 (referring to Meat Industry Letter,  p. 2, Exhibit 
USA-44). 
977 United States ' first written submission, para. 260 (referring to Article 33(b) of MOA 139/2014 as 
amended, Exhibit JE -28; and Article 30(2) -(3) of MOT 46/2013 as amended, Exhibit JE -21). 
978 United States ' first written submission, para. 261.  
979  United States ' first written submission, para. 259 (referring to Appellate Body Report, China – Raw 
Materials , para. 319)  WT/DS477/R • WT/DS478/R  
 
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  prohibi ting the importation of poultry products from China ". 980 The United States also argues that 
the panel in Brazil – Retreaded Tyres  found that the challenged measure "operate[d] so as to 
prohibit the importation of retreaded tyres " and, therefore, fell within  the scope of Article XI:1.981  
7.280.   For the United States, Indonesia has not rebutted the co -complainants’ prima facie  
demonstration that animals and animal products not listed in the appendices of MOT 46/2013, as 
amended, and, for carcasses, meat, and offal, th e appendices of MOA 139/2014, are prohibited 
from being imported into Indonesia.982 The United States notes that although Indonesia denies 
that it maintains a "positive list " in its first written submission983, it does not address the co -
complainants’ claim ba sed on the text of the regulations and other sources, but only refers to 
trade data showing that live bovine animals classified under two HS Codes were imported into 
Indonesia in 2013 and 2014.984  The United States point s to its response to Panel Question no. 47 
where it submitted that the two tariff codes are indeed included in MOT 46/2013 as presented in 
Exhibit JE -18, which includes the original Bahasa version with an official signature page 985, and is 
the version posted on the Ministry of Trade website.986  The United States submits that it appears 
that Indonesia relied on an unofficial or outdated version of MOT 46/2013 in making this 
argument.987 
7.281.   The United States also contends that in response to the Panel' s request to clarify the legal 
instruments under wh ich unlisted products could otherwise be imported, Indonesia acknowledges 
that "certain beef offal products " are banned.988 Indonesia, however, maintains that other products 
are allowed "unless expressly prohibited by another instrument ".989 The United States contends 
that Indonesia did not point to any difference in the treatment of the relevant regulations of 
unlisted beef offal products and other unlisted animals and animal products that would explain this 
situation.990   
7.2.14.1.3   Indonesia  
7.282.   Indonesia argues that it doe s not maintain a "positive list " of animal product imports and 
that it is "simply untrue " that only the animals and animal products listed in Appendix I and II of 
MOT 46/2013 are allowed to be imported into Indonesia. Indonesia submits that consequently, t he 
"measure " challenged by complainants does not in fact exist and therefore is not a "restriction " 
within the meaning of Article XI:1 of the GATT 1994.991 
7.283.   Indonesia contends that, as evidenced in Exhibit I DN-32, there are other animals and 
animal products n ot listed in the regulations mentioned by the co -complainants that have been 
imported into Indonesia during the period of 20 09 until 2015 (January -April).992 
7.284.   Indonesia claims that in any event, any animals or animal products that are not allowed to 
be import ed into Indonesia are prohibited solely for the protection of human, animal or plant 
health or life under Article XX (b) of the GATT 1994.993 
                                                
980 United States ' first written submission, para. 263 (referring to Panel Report, US – Poultry (China) , 
para. 7.457).  
981 United States ' first written submission, para. 263 (referring to Panel Report, Brazil – Retreaded 
Tyres , para. 7.14).  
982 United States ' second written submission, para. 91.  
983 United States ' second written submission, para. 91 (referring to Indonesia 's first written submission, 
para. 96).  
984 United States ' second written submission, para. 88.  
985 United States ' second written submission, para. 88 (referring to United States ' response to Panel 
question No.  47, paras. 124 -126; MOT 46/2013, as amended, p. 16 -17, Exhibit JE-18).  
986 United States ' second written submission, para. 88 (referring to Exhibit USA -84). 
987 United States ' second written submission, para. 88.  
988 United States ' second written submission, para. 90 (referring to Indonesia 's response to Advance 
Panel  question No. 24, para. 25).  
989 United States ' second written submission, para. 90. (referring to Indonesia 's response to Advance 
Panel question N o. 21, para. 22).  
990 United States ' second written submission, para. 90.  
991 Indonesia 's first written submission,  para. 164.  
992 Indonesia 's second written submission, para. 205.  
993 Indonesia 's second written submission, para. 206.  WT/DS477/R • WT/DS478/R  
 
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  7.2.14.2   Analysis by the Panel  
7.285.   The task before the Panel is to establish whether, as claimed by the co -complainants994, 
Measure  10 constitutes a prohibition on the importation of certain animals and animal products  not 
listed in Appendices I  and II  of MOT 46/2013 , as amended , and MOA 139/2014,  as amended , and 
is thus inconsistent with Article XI:1 of the GATT 1994.   
7.286.   We begin by re calling the co -complainants ' contention that Measure  10 constitutes a 
prohibition on importation  of unlisted products995, and that it is not a duty, tax, or other charge, 
and, therefore, is within the scope of Article XI:1.996 New Zealand argued that the compo nents of 
Indonesia's import licensing regime for animals, animal products and horticultural products, which 
include Measure  10, constitute prohibitions or restrictions made effective through an "import 
licence " or, alternatively, an "other measure ".997 The U nited States submitted that Article  XI:1 
applies to any "restriction, " including those "made effective through quotas, import or export 
licenses or other measures ".998 
7.287.   Indonesia has not challenged that this Measure is not a duty, tax, or other charge . Given 
the description of Measure  10 in Section 2.3.3.1 above , we concur with the co -complainants that 
Measure  10 is not a duty, tax, or other charge and it is therefore not excluded explicitly from the 
scope of Article  XI:1 of the  GATT  1994.  Nonetheless, u nlike with other M easures  at issue , 
Indonesia has contested the co -compla inants' charact erisation of Measure  10 as an import 
prohibition o n unlisted products999 For Indonesia, the "measure " challenged by the co -
complainants does not  exist.1000 There is therefore an important differen ce of opinion between the 
parties concerning the characteri sation or even the existence of this Measure. We thus commence 
our analysis by recalling the description of Measure  10 put forward by the co -complai nants and 
proceed to examine whether the prohibition exists.  
7.288.   As described in Section 2.3.3.1 above , we observe that Measure 10 consists of the 
prohibition on the importation of bovine meat, offal, carcass and processed produ cts that are not 
listed  in Appendices I of MOT 46/2013 , as amended , and MOA 139/2014 , as amended; or non -
bovine and processed products that are not listed in Appendices II of MOT 46/2013 , as amended , 
and MOA 139/2014 , as amended ; and Article 59(1) of the A nimal Law Amendment .1001 Indonesia 
implements this  Measure by means of Article 2(2) of MOT 46/2013 , as amended ; and Articles  8 
and 23(3) of MOA 139/2014 , as amended . State-owned enterprises may be authorized to  import 
unlisted carcasses and/or secondary cut m eats to address food availability , price volatility, inflation 
and/or natural disasters.1002 
7.289.   As indicated, and further to the cited  provisions, the co -complainants have claim ed that 
only those animals and animal products that are listed in the relevant append ices to both 
MOA 139/2014, as amended, and MOT  46/2013, as amended, are eligible to obtain MOA 
Recommendations and Import Approvals. They have thus deduced that any bovine animal 
products not listed in  both Appendix  I of MOA 139/2014, as amended,  and MOT 46/2013, as 
amended , would be ineligible  to obtain an MOA Recommendation  and an Import Approval and 
would therefore be prohibited from importation  into Indonesia .1003 The co -complainants further 
submit ted that Article 26 of MOA 139/2014, as amended , provides t hat an application for an MOA 
Recommendation  will be rejected if it does not meet certain requirements, including the 
requirement in Article 8 of that same regulation that the products specified in the application be 
listed in Appendix I or Appendix II of the Regulation .1004 They further indicated that Article 2(2) of 
MOT 46/2013 provides that "[t]he types of Animals and Animal Products that can be imported are 
                                                
994 New Zealand 's first written submission, para s. 131  and 135 . United States ' first written submission, 
para. 258; second written submission,  para. 87. 
995 New Zealand 's first written submission, paras. 131 and 135 ; United States ' first written submission, 
para. 258.  
996 New Zealand 's first written submission, para. 208; United States ' first written submission, fn. 384.  
997 New Zealand 's first writte n submission, para. 203.  
998 United States ' first written submission, para. 142.  
999 Indonesia 's response to Panel question No.  10. 
1000 Indonesia 's first written submission, para. 164.  
1001 New Zealand 's Panel Request, pp. 4 -7; United States ' Panel Request, pp. 4 -7; New  Zealand 's first 
written submission, paras.  38-45; United  States ' first written submission, para. 105.  
1002 Article 23(3) of MOA 139/2014,  as amended,  Exhibit JE -28. 
1003 New Zealand 's first written submission, para. 38; United States ' first written submiss ion, para. 260.  
1004 New Zealand 's first written submission, fn.65; United States ' first written submission, fn. 192.  WT/DS477/R • WT/DS478/R  
 
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  included in Appendix I and Appendix II ".1005 In addition, both co -complainants point ed to 
Article  59(1)  of the Animal Law as generally requiring importers to obtain an Import Approval and 
MOA Recommendation in order to import animal products. According to New Zealand, this 
provision "reinforces the point that, all animal products must, as a matter of Indone sian law, 
obtain Import Approvals and MOA Recommendations, whether or not listed in MOT 46/2013, as 
amended ".1006 
7.290.   We note that the co -complainants "agree that the ban on bovine carcasses and beef 
secondary cuts is a subset of this broader prohibition and that , with respect to this subset of 
products, there is a limited exception under which Indonesia allows state -owned enterprises to 
import prohibited products to me et certain emergency conditions ".1007 In this context, New 
Zealand observe d that Article 23(3) of M OA 139/2014, as amended, allows state -owned 
enterprises to import unlisted carcass and secondary cuts  in order to address food availability and 
price volatility, and anticipate inflation and/or natural disasters.1008 In New Zealand's view, this 
provision conf irms the existence of an import prohibition on unlisted animals and animal products, 
except in specific situations.1009 In other words, the only instance where imports of unlisted 
products are permitted is when the government instructs state-owned enterprises  to import 
carcasses and/or secondary cut meats where certain emergency conditions are deemed to exist.  
7.291.   On the opposite pole, Indonesia denied  that "only the animals and animal products listed in 
Appendix I and Appendix II of MOT 46/2013 are allowed to be imported into Indonesia "1010 and 
submitted  that it does not maintain a "positive list " of animal product imports. Indonesia 
maintained that a ll animals and animal products are eligible for importation, with the exception of 
certain beef offal ( i.e., heart and  liver).1011 According to Indonesia, all animals and animal products 
that are not listed in Appendices I and II of MOT 46/2013 must comply with all other food -related 
laws and regulations, "to the extent these laws and regulations are applicable to all animal s and 
animal products ", including: the Food Law1012; the Animal Law and its Amendment1013; 
MOA 139/2014, as amended1014; MOT 57/20131015; MOT 17/20141016; and MOT 41/2015 .1017  
7.292.   Indonesia, in spite of our requests, has failed to identify the legal provisions that would 
specifically  allow unlisted animals and animal products to be imported. In response to a question 
from the Panel, Indonesia asserted that animals and animal products not listed in either 
Appendix  II of MOT 46/2013, as amended, or MOA 139/2014, as amended, are "generally 
permitted to be imported into Indonesia unless expressly prohibited by another instrument or 
agency d etermination ".1018 Indonesia did not submit any legal instrument providing that imports 
are allowed unless expressly prohibited. Furthermore , the Pa nel has attempted to seek further 
clarification on this matter asking Indonesia to describe how Indonesian importers can obtain the 
"import permit " and the "recommendation " referred to in Article  59 of the Animal Law Amendment 
that are necessary to import bovine meat, offal and carcass products that are not listed in either 
Appendix I of MOT 46/2013, as amended by MOT  17/2014 or Appendi x I of MOA 139/2014, as 
amended by MOA 2/2015.1019 Indonesia replied that the listed products under Appendix I of  
MOT 46/2013 were discussed with the relevant business associations and the reasons why some 
products are not listed in the appendices is be cause there is no demand for such products in 
Indonesia or because they are prohibited for food safety reasons. Indonesia also su bmitted that  
                                                
1005 New Zealand 's second written submission, para. 30; United States first written submission, 
para. 260. 
1006 New Zealand 's response to Panel que stion No.  41, paras. 84 -85.  
1007 United States ' response to Panel question No.  3. 
1008 New Zealand 's first written submission, paras. 44 -45, 137 -145, and 310.  
1009 See also  paragraph 7.292  above. In paragraphs 30 -35, 38 -45, 131, 309 -312 of its first written 
submission, New Zealand provided specific examples of the types of beef secondary cuts, bovine offal, and 
bovine manufacturing meat that are prohibited from importation. See also  Exhibit NZL -22, an indicative list of 
bovine  meat, offal and carcass products claimed by New Zealand to be prohibited from importation. See United 
States ' first written submission, paras. 104 – 110, for a list of non-bovine  meat, offal, carcass and processed 
meat products that are not listed i n Appendix II of MOT 46/2013 , as amended, and Appendix II of 
MOA 139/2014 , as amended .  
1010 Indonesia 's first written submission, para. 96. 
1011 Indonesia 's response to Panel question No.  24, para. 25.  
1012 Exhibit JE -2.  
1013 Exhibits JE -4 and JE -5.    
1014 Exhibit JE -28. 
1015 Exhibit JE -19. 
1016 Exhibit JE -20. 
1017 Exhibit JE -22. 
1018 See Indonesia 's response to Panel question No.  21. 
1019 Indonesia 's response to Panel question No.  102. WT/DS477/R • WT/DS478/R  
 
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  there are only three recognized types of meat cuts: prim e cut, secondary cut, and offal, which are 
all included in  the Appendix I of MOT 46/2013.1020   
7.293.   As the co -complainants pointed out, Indonesia has not explained how importers of bovine 
meat, offal and carcass products that are not listed in both Appendix I of MOT 46/2013 , as 
amended  and Appendix I of MOA 139/2014 , as amended,  can obtain Import Approvals and MOA 
Recommendations.1021 Indonesia has also not identified any other regulation pursuant t o which a 
Recommendation could be granted for such products or whereby the products could be imported  
legally .1022 Indonesia did indicate that all animals and animal products that are not listed in the 
Appendices I and II of MOT 46/2013 must comply with all o ther food -related laws and regulations, 
"to the extent these laws and regulations are applicable to all animals and animal products ", 
including the Animal Law and its Amendment1023 and MOA 139/2014.1024 We also note Indonesia's 
contention that the requirements t o obtain MOA Recommendations and Import Approvals "simply 
do not apply " for animals and animal products not appearing in the mentioned appendices.1025 We 
recall, however, that Article 59 of the Animal Law Amendment1026 establishes that every person 
wishing to im port animals and animal products into Indonesia must obtain an import permit from 
the minister that organizes government affairs in the trade sector after obtaining a 
recommendation from the Minister for Fresh Animal Product or the head of the agency in th e field 
of drug and food control for processed food product s. To us, this provision confirms that all 
animals and animal products, except as specifically provided in the law, need an Import Approval 
and a Recommendation prior to importation into Indonesia,  regardless of whether they are 
included in Appendices I and II of MOT 46/2013, as amended and MOA 139/2014, as amended . In 
this same vein we also note Indonesia's statement that "[w]ithout import approval from MOT 
and…MOA recommendation ( "MOA-R") for cert ain animal products, an importer cannot import such 
products into Indonesia ".1027 
7.294.   As explained in paragraph 7.292 above , the Panel sought to further clarify the implications 
of Article 59 of the Animal Law Amendment, in particu lar how importers could obtain the "import 
permit " and the "recommendation " necessary to import animals and animal products not listed in 
the relevant Appendices of MOT 46/2013, as amended, and MOA 139/2014, as amended, referred 
to in this provision.1028 As pointed out by the co -complainants1029, Indonesia's response did not 
address the essence of the question and, what is more, it suggested that the reasons why some 
products are not listed in the mentioned appendices is because there is no demand for such 
produc ts in Indonesia or because they are prohibited for food safety reasons.1030 To us, these 
indications should be read in conjunction with Indonesia's previous statement that  certain beef 
offal ( i.e., heart and liver)  are prohibited for importation1031 and are indi cative that there are some 
unlisted products that cannot be imported into Indonesia . As the United States indicated, we also 
observe that Indonesia did not point to any difference in the treatment of the relevant regulations 
of unlisted beef offal products  and other unlisted animals and animal products that would explain 
why some unlisted animal products are not allowed into Indonesia while others are .1032  
7.295.   Our conclusion is further confirmed by the existence of an exception clause authorizing 
state-owned ente rprises to import unlisted carcasses and/or secondary cut meats to address food 
availability , price volatility, inflation and/or natural disasters.1033 Allowing state -owned enterprises 
to import unlisted products under very specific and exceptional circumstan ces persuades us that, 
at least, those unlisted products are prohibited from importation; otherwise, the exception would 
not make any sense.  
                                                
1020 Indonesia 's response to Panel question No.  102 
1021 New Zealand's comments on Indonesia's response to Panel question No. 102, para. 28; United 
States' comments on Indonesia's response to Panel question No. 102, para. 43.  
1022 United States' comments on Indonesia's response to Panel question No. 102, para. 43.  
1023 Exhibits JE -4 and JE -5.   
1024 Indonesia 's respo nse to Panel question No.  24, para. 25.  
1025 Indonesia 's first  written submission, paras. 34, 96 and 164 . 
1026 Indonesia 's response to Panel question No.  102. 
1027 Indonesia 's second written submission, para. 43.  
1028 Indonesia 's response to Panel question No.  102. 
1029 New Zealand's comments on Indonesia's response to Panel question No. 102, para. 28; United 
States' comments on Indonesia's response to Panel question No. 102, para. 43.  
1030 Indonesia 's response to Panel question No.  102. 
1031 Indonesia 's response to Panel quest ion No.  24, para. 25.  
1032 United States' second written submission, para. 90.  
1033 Article 23(3) of MOA 139/2014, Exhibit JE -28. WT/DS477/R • WT/DS478/R  
 
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  7.296.   We are mindful of Indonesia's argument that  there are other animals and animal products 
not listed in the regulati ons mentioned by the co -complainants that have been imported into 
Indonesia, in particular, for tariff numbers 0102.29.10.90, 0102.29.90.001034, and those  contained 
in Exhibit IDN-32, limited to imports from New Zealand and the United States .1035 Regarding the 
first two tariff codes, and having reviewed the evidence in the record, we are persuaded by the 
arguments presented by United States that they are indeed included in MOT 46/2013 as shown  in 
Exhibit JE -18 and JE -21, and that this same version is posted on th e Indonesian Ministry of Trade 
website.1036 We observe that Exhibit IDN -32 contains some import statistics covering the period 
2009-2015 (January -April), showing positive import figures for the first four months of 2015 with 
respect to some tariff lines ( 0401.50.90.00 , 0401.50.10.00 , 0401.20.10.00 , among others) that 
are not listed in the Appendices  of MOT 46/2013 , as amended . However, Exhibit IDN -32 also 
shows that there have been a wide variety of unlisted products where no imports have been made 
in that sam e period. Exhibit USA -89 reinforces this point: a number of unlisted products ( e.g. cuts 
and edible offal of fresh and frozen chicken and turkey; fresh and frozen bovine carcases and half -
carcasses) have been zero or near zero since the import licensing re gime became effective.1037 To 
us, the evidence presented is inconclusive because it does not show that products not listed in the 
referred appendices can obtain the relevant import documents as mandated by Article  59 the 
Animal Law Amendment, which clearly re quires this as a condition for importation.  
7.297.   Accordingly, on the basis of the regulations on the record and in the absence of effective 
rebuttal from Indonesia, we consider that the co -complainants have presented a prima facie  case 
that Indonesia's regulati ons only allow for the importation of animals and animal products listed in 
Appendices I of MOT 46/2013 , as amended , and MOA 139/2014 , as amended; or non -bovine and 
processed products listed in Appendices II of MOT 46/2013 , as amended , and MOA 139/2014 , as 
amended . We thus agree with the co -complainants in that Indonesia's regulations prohibit the 
importation of certain animals and animal products  not listed in Appendices I  and II  of 
MOT 46/2013 , as amended , and MOA 139/2014,  as amended . We consider that th is ban falls 
squarely into the definition  of a "prohibition " under  Article XI:1 of the GATT 1994 .1038  
7.298.   On the basis of the foregoing, we conclude that Measure  10 imposes a prohibition on the 
importation of certain animals and animal products  not listed in Appendices I  and II  of 
MOT 46/2013 , as amended , and MOA 139/2014,  as amended , and is thus inconsistent with Article 
XI:1 of the GATT  1994. Having reached this conclusion, we do not think that it is necessary for the 
positive resolution of this dispute to cont inue our analysis o f New Zealand's contention that the 
limited exception for  state-owned enterprises that may be authorized to  import unlisted carcasses 
and/or secondary cut meats also has a limiting effect on importation .1039 
7.2.14.3   Conclu sion 
7.299.   For the reasons state d above, we find that Measure  10 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a prohibition on importation . 
7.2.15   Whether Measure  11 ( Limited application windows and val idity periods ) is 
inconsistent with Article  XI:1 of the GATT 1994  
7.2.15.1   Arguments of the parties  
7.2.15.1.1   New Zealand  
7.300.   New Zealand claims that the limited application windows and validity periods for MOA 
Recommendations and Import Approvals restrict trade in a manner inco nsistent with Article XI:1 of 
                                                
1034 Indonesia's first written submission, para . 98. 
1035 The import statistics supplied by Indonesia in Exhibit IDN -32 were in response t o Panel question 
No. 43, seeking total imports of all listed and unlisted animals and animal products, not just from New Zealand 
and United States. See also  Indonesia's second  written submission, para . 205.  
1036 United States' second written submission, para.  88 (referring to  Exhibit USA -84); response to Panel 
question No.  47. 
1037 United States' comments on Indonesia's response to Panel question No. 43 (referring to Exhibit 
IDN-32 and Exhibit USA -89). 
1038 We recall that the Appellate Body has defined this term as a "legal ban on the trade or importation 
of a specified commodity ". Appellate Body Report, Argentina – Import Measures , para.  5.217 (referring to the 
Appellate Body Reports, China – Raw Materials , para.  319). 
1039 Article 23(3) of MOA 139/2014, Exhibit JE -28. WT/DS477/R • WT/DS478/R  
 
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  the GATT 1994. New Zealand argues that importers are only permitted to apply for MOA 
Recommendations and Import Approvals in the month immediately before the start of the relevant 
quarter, and, in practice, the period during w hich MOA Recommendations can be applied for is less 
than one month because (i) MOA Recommendations must be obtained before Import Approvals 
may be applied for; and (ii) the application period for MOA Recommendations set by the Ministry 
of Agriculture is of ten shorter than one month. New Zealand submits that these limited application 
windows mean that importers are only able to apply for permission to import animals and animal 
products four times a year, and prohibit approvals being obtained outside of these  limited time 
periods.1040 
7.301.   New Zealand argues that the limited application windows have a particularly restrictive 
effect on imports at the start of each quarter. New Zealand explains that because the application 
periods for MOA Recommendations and Import App rovals are immediately prior to the start of 
each quarter, Import Approvals are only granted at the commencement of the relevant quarter.1041 
New Zealand claims that import orders are unable to be finalised and shipped until after an Import 
Approval is issued , as the health certificate issued by the exporting country is required to specify 
the number and date of issue of the Import Approval.1042 For New Zealand, even if an importer 
were willing to take significant commercial risk by shipping product s to Indonesia  in "anticipation 
of receiving its import licence " prior to the products' arrival, they are legally unable to do so as a 
consequence of Indonesia's regime.1043 According to New Zealand, once an Import Approval is 
issued and an import order is finali zed, it is  necessary for exporters to prepare the shipment to 
Indonesia. New Zealand claims that since this process can take weeks, importers are effectively 
unable to arrange for products to arrive in Indonesia during the first month of each quarter1044, 
which constit utes a severe limitation on the volume of imports over the course of a year.1045 New 
Zealand contends that the evidence it has submitted shows how this limiting condition is more 
than hypothetical since imports from all countries into Indonesia drop, with reg ularity, in the first 
month of each validity period as a consequence of Indonesia's measures.1046  
7.302.   New Zealand also submits that once issued at the commencement of a quarter, Import 
Approvals are valid for only a three -month period, with the consequence that no product is 
permitted to be imported after the expiry of this validity period, meaning that imports are also 
restricted at the end of each quarter.1047 According to New Zealand, Import Approvals specify that 
imports must clear customs prior to the end of ea ch quarter1048 and accordingly, there is a period 
during the final weeks of each quarter when products are unable to be shipped, as they will not 
arrive in Indonesia prior to the end of the quarter.1049 New Zealand claims that products arriving 
after this date w ill be refused entry into Indonesia and re -exported.1050 New Zealand therefore 
contends that the combined inability to import at the start of a quarter or to export towards the 
end of a quarter means there is a "dead zone " during which products cannot be impo rted into 
Indonesia.1051 New Zealand contends that such measures which restrict "market access " or "create 
uncertainty and affect investment plans " have been held by a number of panels to constitute 
restrictions in violation of Article XI:1 .1052 New Zealand thus  holds that the limited application 
windows and validity periods similarly restrict Indonesian market access and create uncertainty for 
                                                
1040 New Zealand 's first written submission, para. 147.  
1041 New Zealand 's first written submission, para. 149 (referring to Article 12(2), MOT 46/2013 , Exhibit 
JE-18). 
1042 New Zealand 's first written submission, para. 149 (referring to Beef Import Approval Examp le, 
para. 1 Exhibit NZL -21); second written submission, para. 48.  
1043 New Zealand 's second written submission, para. 48.  
1044 New Zealand 's first written submission, para. 149 (referring to Meat Industry Association Statement, 
pp. 7 – 8, Exhibit NZL -12). 
1045 New Zealand 's first written submission, para. 149; second written submission , para. 47.  
1046 New Zealand 's first written submission, Figures 4 and  5; New  Zealand 's first opening statement, 
Figure 8; second written submission, para. 47.  
1047 New Zealand 's first writt en submission, para. 151 (referring to Article 12(3) , MOT 46/2013 , Exhibit 
JE-18); second written submission, para. 49.  
1048 New Zealand 's first written submission, para. 151 (referring to Beef Import Approval Example, 
para. 9, Exhibit NZL -21). 
1049 New Zealand 's first written submission, para. 151 (referring to Meat Industry Association Statement, 
p. 7, Exhibit NZL -12). 
1050 New Zealand 's first written submission, para. 151 (referring to Article 30(2), MOT 46/2013 , Exhibit 
JE-18 and Beef Import Approval Example, pa ra. 9, Exhibit NZL -21). 
1051 New Zealand 's first written submission, para. 15 2. 
1052 New Zealand 's first written submission, para. 154 (referring to Panel Reports, Colombia – Ports of 
Entry , para. 7.240; China – Raw Materials , para. 7.1081; US – Poultry (China) , para. 7.454 ). WT/DS477/R • WT/DS478/R  
 
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  imported animals and animal products, thereby limiting imports contrary to Article XI:1 of the 
GATT 1994.1053 
7.303.   New Zealand f urther contends that it is Indonesia's regulations that limit imports, not the 
private importers' decisions since the limited application windows and validity periods are clearly 
set out in Indonesian regulations and constrain the actions of private actors .1054 
7.2.15.1.2   United States  
7.304.   The United States claims that this measure is inconsistent with Article XI:1 of the 
GATT  1994 because it constitutes a restriction within the meaning of Article XI:1, that is, it is a 
limitation or limiting condition on importation or has a limiting effect on importation.1055 The United 
States argues that the combination of the limited time windows within which importers can apply 
for, and receive, import permits, and the short validity periods within which imports can enter 
Indonesia, results  in a period of several weeks at the end of one validity period and the beginning 
of the next one where products cannot  be exported to Indonesia. For the United States, due to the 
design and structure of Indonesia’s licen ce application windows and import v alidity periods, and 
given the long distances between US and Indonesian ports, there is a period of five to six weeks 
during each import period when US exporters cannot ship to Indonesia at all.1056 Additionally, the 
United States claims that this requirement  is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article  XI:1.1057 
7.305.   The United States contends  that Import Approvals are issued four times a year for a single 
three -month validity period1058, and that they can be applied for only durin g the month preceding 
the start of a period. The United States also contends that an Import Approval application can be 
submitted only after the importer has received a Recommendation from the Ministry of Agriculture, 
which are issued only during the month  prior to the start of a validity period.1059 The United States 
maintains that, in reality, importers often have less than a month to apply for an Import Approval, 
that the application window for Recommendations is sometimes delayed and that permission to 
import is granted only once the import period has begun, and sometimes well into the period.1060 
The United States submits that because the relevant Import Approval number must be written on 
the Certificate of Health that is issued in the products' country of or igin1061, importers cannot begin 
placing orders, and exporters cannot begin shipping, until after Import Approvals have been issued 
for that period. The United States contends that onc e orders are placed, it takes US  products  at 
least four to six weeks  to be shipped to Indonesia1062, and thus, the earliest that US  animals and 
animal products could reach Indonesia (assuming Recommendations and Import Approvals are 
issued on the first day of the validity period) is about one month after the start of a validity 
period.1063 The United States also contends that all animals and animal products imported during a 
validity period must arrive in Indonesia and clear customs prior to the end of the period.1064 This is 
because, if the customs clearance process is not completed by th at moment, even imports that 
arrived at the Indonesian port within the validity period are prohibited from entering Indonesia and 
must be re -exported.1065 The United States claims that, to ensure customs clearance into 
Indonesia before the end of the period, US exporters must stop accepting orders and shipping to 
                                                
1053 New Zealand 's first written submission, para. 154.  
1054 New Zealand 's second written submission, para. 50.  
1055 United States ' first written submission, paras. 264 -265. 
1056 United States ' first written submission, paras. 156 -157, 266 -271; second w ritten submission, 
para. 14; United States' response to Panel question No.  28, paras. 100 -102. 
1057 United States ' first written submission, fn. 393.  
1058 United States ' first written submission, para. 266 (referring to MOT 46/2013, as amended, 
article  12(1) -(2), Exhibit JE -21). 
1059 United States ' first written submission, para. 266 (referring to MOT 46/2 013, as amended, 
article  12(2), Exhibit JE -21 and MOA 139/2014 as amended, article 29, Exhibit JE -28). 
1060 United States ' first written submission, para. 267.  
1061 United States ' first written submission, para. 268 (referring to Ministry of Trade, Import Approval for 
Beef, Exhibit USA -43). 
1062 United States ' first written submission, para. 268 (referring to NHC Statements, p. 3 and 5, Exhibit 
USA-21). 
1063 United States ' first written submission, para. 268.  
1064 United States ' first written submission, para. 269 (referring to Ministry of Trade, Import Approval for 
Beef, Exhibit USA -43). 
1065 United States ' first written submission, para. 269.  WT/DS477/R • WT/DS478/R  
 
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  Indonesia four to six weeks before the end of the period, as it takes that long to transport US 
products to a port  and ship them to Indonesia.1066  
7.306.   The United States explains that in light of these marke t realities, Indonesia's application 
window and validity period requirements have a limiting effect on imports of US products into 
Indonesia. The United States claims that, as a consequence, there is at least one month at the end 
of each period when Indone sian importers seeking to import animals or animal products are 
precluded  from choosing US products.1067 According to the United States, these periods without 
orders and shipments add up to four to six months  per year and thus, for a third to half of each 
year, US products are denied the opportunity to compete in the Indonesian market.1068 The United 
States submits that in Colombia – Ports of Entry  the panel found that a measure restricting 
imports from Panama to two Colombian ports had a limiting effect on impor ts because 
"uncertainties, including access to one seaport for extended periods of time and the likely 
increased costs that would arise for importers operating under the constraints of the port 
restrictions, limit competitive opportunities f or imports arri ving from Panama ".1069 The United 
States submits that Indonesia's application window s and validity periods, however, are far more 
restrictive in that they wholly exclude US animals and animal products from entering Indonesia for 
four to six weeks each quarter , and a total of four to six months each year.1070 The United States 
claims that these requirements therefore constitute a "restriction " within the scope of 
Article  XI:1.1071 
7.2.15.1.3   Indonesia  
7.307.   Indonesia claims that its import licensing system for animals and animal prod ucts is an 
automatic import licensing system and that for this reason it does not violate Article XI:1 of the 
GATT 1994.1072 Indonesia submits that in case the Panel prefers to assess each element of 
Indonesia's import licensing regime for animals and animal products, it contends that the 
application windows and validity periods do not violate Article XI:1 of the GATT 1994 because they 
allow for continuous importation of products into Indonesia.1073 
7.308.   Indonesia refers to its position under Article 4.2 of the Agreem ent on Agriculture on how 
the co -complainants' claims  must fail  with respect to the application windows and validity periods 
for import licences, the self -selected import license terms and the realization  requirement for 
imports .1074 For Indonesia, the co -complainants' argument is at odds with their argument about 
being compelled to import too much as a result of the realization  requirement. It also contends 
that the market share of many key imports from the co -complainants has increased since the 
implementati on of Indonesia's current import licensing regime and this contrast with the co -
complainant's argument that the import licensing regime has trade -restrictive effects. Indonesia 
submits that this evidence shows that the application window and validity perio d elements of 
Indonesia's import licensing for animals, and animal products is consistent with Article XI:1 of the 
GATT 1994 .1075 
7.309.   Indonesia contends that the application windows are permitted under Article 1(6) of the 
Import Licensing Agreement. According to Indonesia, it  allows for  a one -month window to apply 
for an MOA Recommendation for animal products , and a one -month  window to submit Import 
Approval applications . All applications for  MOA-Recommendations or Import Approvals can be 
submitted online at INATR ADE and REIPPT .1076 For Indonesia, the validity periods of its import 
licences for horticultural products, animals, and animal products cover the entire calendar year and 
there is no period of time during which imports are restricted as a function of the laps e in validity 
                                                
1066 United States ' first written submissio n, paras. 269 -270 (referring to NHC Statements, pg 3, Exhibit 
USA-21); United States ' second written submission, para. 14.  
1067 United States ' first written submission, para. 271.  
1068 United States ' first written submission, para. 271.  
1069 United States ' first wr itten submission, para. 272 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.274).  
1070 United States ' first written submission, para. 272.  
1071 United States ' first written submission, para. 273.  
1072 Indonesia 's second written submission, para. 165.  
1073 Indonesia 's second written submission, para. 166.  
1074 Indonesia 's first written submission, para. 163.  
1075 Indonesia 's second written submission, para. 159.  
1076 Indonesia 's second written submission, para. 161.  WT/DS477/R • WT/DS478/R  
 
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  periods.1077 Indonesia also contends that the application window and validity period are very 
common in administering imports in WTO Members.1078 
7.2.15.2   Analysis by the Panel  
7.310.   The task before the Panel is to establish whether, as claimed by the co -complain ants1079, 
Measure  11 is inconsistent with Article XI:1 of the GATT  1994 because it constitutes a restriction 
having a limiting effect on import ation of animals and animal product imports into Indonesia.  
7.311.   We note that the co -complainants argue d that Measure 11  constitutes a restriction on 
importation1080, and that it is not a duty, tax, or other charge, and, therefore, is within the scope 
of Article XI:1.1081 New Zealand argue d that the components of Indonesia's import licensing 
regime for animals, animal products an d horticultural products, which include Measure 11, 
constitute prohibitions or restrictions made effective through an "import licence " or, alternatively, 
an "other measure ".1082 The United States submit ted that Article XI:1 applies to any "restriction, " 
including those "made effective through quotas, import or export licenses or other measures ".1083  
7.312.   We observe that Indonesia has not contested the co -complainants' characterisation of 
Measure  11.1084 Rather, Indonesia has responded that its measures are outside the s cope of 
Article  XI:1 because they are automatic import licensing regimes .1085 We recall our conclusion in 
Section  7.2.4.1 above  whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  11 in Section 2.3.3.2 
above , we concur with the co -complainants that Measure  11 is not a duty, tax, or other charge and 
it is therefore not excluded explicitly from the scop e of Article  XI:1 of the GATT  1994.  
7.313.   As with Measure  11086, we proceed to examine whether the co -complainants have 
demonstrated that Measure  11 prohibits or restricts trade, rather than examining the means by 
which such prohibition or restriction would be made  effective. In doing so, we will determine 
whether  the co-complainant s have demonstrated that Measure 11 has a limiting effect on 
importation . To carry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing struct ure of Measure 11, within its relevant context.  
7.314.   As described  in Section 2.3.3.2 above  and similar to Measure  1, Measure 11 consists of a 
combination of requirements, including the prohibition on importers from applying for 
Recommendations and Import Approvals outside four one -month validity periods, the provision 
that Import Approvals are valid for only th e three -month duration of each quarter, and the 
requirement that importers are only permitted to apply for Recommendations  and Import 
Approvals in the month immediate ly before the start of the relevant quarter.1087 This measure is 
implemented by Indonesia through Article 29 of MOA 139/2014 , as amended by MOA  2/2015, and 
Article 12 and 15 of MOT 46/2013 , as amended.  We discern th e following elements in the design, 
architecture and structure of this measure as per the mentioned regulations:  
a. Pursuant to  Article 29 of MOA  139/2014, as amended by MOA  2/2015  the issuance of a  
Recommendation  is conducted four times; namely, December of the previous year, and 
March, June, and September of the current year.  
b. Pursuant to 12 of MOT 46/2013, as amended,  Applications for Import Approval of 
animals and animal products listed in Appendix I can only be submitted as follows: (i) for 
the first quar ter (January to March), in the month of December; (ii) for the second 
quarter (April to June), in the month of March; (iii) for the third quarter (July to 
                                                
1077 Indonesia 's second written submission, para. 1 63. 
1078 Indonesia 's second written submission, para. 164.  
1079 New Zealand 's first written submission, para. 154. United States ' first written submission, 
paras.  264-265. 
1080 New Zealand 's first written submission, para. 154. United States ' first written submissi on, 
paras.  264-265. 
1081 New Zealand 's first written submission, para. 208; United States ' first written submission, fn. 393.  
1082 New Zealand 's first written submission, para. 203.  
1083 United States ' first written submission, para. 142.  (emaphsis original)  
1084 Indonesia's response to Panel question No.  10. 
1085 Indonesia 's second written submission, para. 165.  
1086 See paragraph  7.76 above.  
1087 New Zealand 's Panel Request, pp. 4 -7; United States ' Panel Request, pp. 4 -7; New  Zealand 's first 
written submission, para. 46; United  States ' first written submission, para. 113.  WT/DS477/R • WT/DS478/R  
 
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  September), in the month of June; and (iv) for the fourth quarter (October to 
December), in the month  of September. The Import Approval is then issued at the 
beginning of each relevant quarte r and is valid for three months, and  
c. Pursuant to Article 15 of MOT 46/2013 , as amended , a Certificate of Health from the 
country of origin of the animals and animal p roducts that are to be imported must be 
issued after the RIs have received their Import Approvals.1088 The Import Approval 
Number must be specified in the Certificate of Health that must accompany every 
shipment of animal products to Indonesia.1089  
7.315.   According  to the co -complainants , as the number and date of the Import Approval must be 
specified on the health certificate issued by t he exporting country and as  a pre -requisite for 
exporting the relevant goods, an animal or animal product cannot be physically shippe d until the 
Import  Approval is issued, the order finali zed and the health certificate issued in the exporting 
country.1090 The United States thus argue d that due to the design and structure of this Measure , 
and given the long distances between United States a nd Indonesian ports, there is a period of five 
to six weeks during each import period when US exporters cannot ship to Indonesia at all.1091 New 
Zealand rather focuse d on the limiting effect of Measure  11 on the competitive opportunities of 
importers, and the  combined effects of (i) the application windows respectively established for 
MOA Recommendations and Import Approvals, as well as (ii) the timeframe set out to obtain the 
Health Certification Requirement.1092 For New Zealand,  the combination of the inability  to import at 
the start of a quarter, along with the corresponding inability to export towards the end of a quarter 
means there is a "dead zone " during which products cannot be imported into Indonesia.1093 In its 
view, even if an importer were willing to take  significant commercial risk by shipping product to 
Indonesia in "anticipation of receiving its import licence " prior to the products' arrival, they are 
legally unable to do so as a consequence of Indonesia's regime.1094 Once an Import Approval is 
issued and an import order is finali zed, it is necessary for exporters to prepare the product and 
ship it to Indonesia. New Zealand  argued  that since this process can take weeks, importers are 
effectively unable to arrange for product s to arrive in Indonesia during t he first month of each 
quarter1095 and that this constitutes a severe limitation on the volume of imports which can be 
imported over the course of a year.1096 New Zealand contend ed that such measures restrict 
"market access " or "create uncertainty and affect inv estment plans ". 
7.316.   We note that a key element in understanding the challenge brought by the co -
complainants is the fact that animals and animal products cannot be shipped from the country of 
origin until after the Import Approval for that period has been issu ed. As mentioned in 
paragraph  7.314 above , this is a consequence of Article 15(1) of MOT 46/ 2013, which requires 
that a "[c]ertificate of Health from the country of origin of the Animals and/or Animal Products that 
are to b e imported must be issued after an RI -Animals and Animal Products have received Import 
Approval " and that the Import Approval Number be included in the Certificate of Health. New 
Zealand argue d that since the number and date of the Import Approval must be specified on the 
health certificate issued by the exporting country, a product cannot be physically shipped until the 
Import Approval is issued, the order finali zed and the health certificate issued in the exporting 
country.1097 Similarly, the United States e xplain ed that the health certificate cannot  be issued , and 
thus the goods cannot be shipped , until after the Import Approvals for that period have been 
issued.1098  
7.317.   As was the case with Measure  1, we understand that the alleged restriction occurs because 
of the combination of the different elements or requirements that constitute Measure  11, namely 
(i) the timing of the application windows, (ii) the requirement that all goods arriving into Indonesia 
must clear customs during the validit y period of the Import A pproval  and (iii) the requirement that 
                                                
1088 Article 15 of MOT 46/2013, as amended, Exhibit JE -21. 
1089 Article 15(2) of MOT 46/2013, as amended, Exhibit JE -21. 
1090 New Zealand 's first written submission, par a. 48 and fn. 84; United States ' first written submission, 
para. 112.  
1091 United States ' first written submission, paras. 156 -157, 266 -271; second wr itten submission, 
para. 14; response to Panel question No.  28, paras. 100 -102. 
1092 New Zealand 's first written submission, paras. 147 -150. 
1093 New Zealand 's first written submission, para. 152.  
1094 New Zealand 's second written submission, para. 48.  
1095 New Zealand 's first written submission, para. 149 (referring to Meat Industry Association Statement, 
pp. 7 – 8, Exhibit NZL-12). 
1096 New Zealand 's first written submission, para. 149; second written submission para. 47.  
1097 New Zealand 's first written submission, fn. 84.  
1098 United States ' first written submission, para. 112. WT/DS477/R • WT/DS478/R  
 
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  an Import Approval must be issued before products are shipped to Indonesia; and the factual 
circumstances inherent to international transportation depending on the geographical location of 
the exporting country. As we  mentioned in paragraph 7.80 above , there is evidence on the record  
that it takes two to six weeks for products shipped from the co -complainants to reach 
Indonesia.1099 The following graph shows the operation of the various req uirements constituting 
Measure  11: 
IMPORT LICENSING FOR  ANIMALS AND ANIMAL P RODUCTS:  MEASURE 11 SCENARIO  
 
 
7.318.    To better understand the design, architecture, and revealing structure of this Measure and 
its resulting operation in practice,  the Panel devised a  hypothetical scenario , similar to the one 
used in our analysis of Measure 1 . We assume that an importer has obtained a Recommendation 
and an Import Approval for the validity period of January  to March 2015 and that it takes, on 
average, four weeks for the  products to get from the country of origin to Indonesia. This means 
that at the latest, the importer must make its last shipment by the beginning of March for the 
products to arrive on time to be admitted to Indonesia, before the validity of the Import Ap proval 
expires. We also assume that the importer applied for an MOA Recommendation  and an Import 
Approval for the validity period April  to June 2015 during the application window for each of these 
documents ( i.e. March). Following Article 12(2) of MOT 46/2 013, as amended, the Import Approval 
would be issued at the beginning of each quarter, i.e. in April in this scenario. Therefore, the 
earliest the importer would be able to ship animals and animal products under the validity period 
of April  to June, would be at the beginning of April since it cannot ship any products before 
obtaining the new Import Approval (due to the health certificate requirement). If the importer is 
able to ship the products immediately after obtaining the Import Approval, the products would 
arrive at the beginning of May due to the shipping time assumptions. Therefore, in this scenario, 
there would be no imports during the month of April, the importer would have to stop imports at 
the beginning of March and could only resume them after obtaining a new Import Approval in early 
April.  
7.319.   The hypothetical scenario , which was modelled to closely follow how the different elements 
or requirements encompassed in this Measure operate , shows that under Indonesia's import 
                                                
1099 See Exhibit USA -21, USA -49, NZL -49, NZL -50, NZL -97. See also  New Zealand 's response to Panel 
question No.  94; United States ' response to Panel question No.  94; Indonesia 's response to Panel question No.  
94; New Zealand 's comments on Indonesia 's response to Panel question No.  94. WT/DS477/R • WT/DS478/R  
 
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  licensing regime for animals  and animal products, there is a period of time w here there are no 
imports into Indonesia. It is worth noting that this period of no imports can be attributed to three 
separate  causes: (i) the timing of the application windows, which is very close to the e xpiration of 
the previous import documents (ii) the requirements that preclude importers from shipping 
products before having obtained the new Import Approval, that would otherwise allow importers to 
save time by shipping their products in advance while wa iting for the new Import Approval, and 
(iii) the shipping time from the country of origin, which creates a gap between the time where the 
new Import Approval is received and the time when the goods subject to such Import Approval 
arrive to Indonesia. Of these three causes, the first two are attributable to Indonesia's regulations  
while the third one is due to geographical considerations whe n shipping products from the co -
complainants' territory to Indonesia.  
7.320.   While the elements of Measure 11 are attributable  to Indonesia, the factual circumstances 
resulting from the geographical location of the co -complainants  vis-à-vis Indonesia  are obviously 
not directly attributable to Indonesia. It is worth noting that when referring to this geographical 
dimension of the challenge brought by the co -complain ants, Indonesia responded that "its 
geographic location on the planet is not a 'measure' designed to 'restrict' imports from either New 
Zealand or the United States.1100 This fact is nonetheless known to Indonesia and thus could have 
been taken into account when designing the various requirements that encompass Measure  11.  
7.321.   Indonesia argued that it is possible to obtain an extension  of the validity period of Import 
Approvals, and consequently, if an importer obtains such a d ocument  for the January  to June 
period and provide d documentation that the products have been shipped in June and are likely to 
enter Indonesia after the end of the period, then MOT will grant an extension of up to one 
month.1101 Indeed, as we noted in  Sectio n 2.2.2.2.4 above , pursuant Article 12A of MOT 46/2013, 
the validity period of import approvals may be extended for a maximum of 30 days under certain  
circumstances.1102 However, we agree with the co -complainants1103 that such ext ension does not 
appear to be automatic . Indeed,  pursuant to Article 12A(5)  of MOT 46/2013 , an importer applying 
for an extension must provide "a stamped statement letter … regarding the reason for submitting 
an application for an extension of the Import Ap proval validity  period along with sufficient 
supporting evidence " and this provision is not clear as to what reasons might justify an extension.  
Additionally, the extension will not be granted for the fourth quarter of the year and  to be eligible 
to apply for an extension, goods must have left the country of origin prior to the end of the 
ordinary validity period of the Import Approval.1104 
7.322.   It is worth noting that unlike the regime for horticultural products where there are only two 
validity periods for Import  Approvals, the regime for animals and animal products has four validity 
periods. As claimed by the co -complainants, this would mean that there are several months 
throughout the year where imports are restricted in Indonesia. We therefore observe that as a  
consequence of (i) the operation and interaction the different requirements under this measure 
and (ii) the shipping times from the co -complainants ' territory to Indonesia, there are several 
period s of time where there are no imports of animals and animal  products into Indonesia .  
7.323.   The operation of Measure 11 as depicted in our hypothetical scenario above and the 
resulting period with no imports is confirmed by the trade statistics the co -complainants have 
provided. As argued by New Zealand, the evidence reveals a regular pattern of import flows from 
all countries into Indonesia that invariably drop in the firs t month of each validity period .1105  
7.324.   Having examined the design, architecture and revealing structure of Measure  11, we 
perceive the limiting effect of this Measure in terms of volume of imports because, during certain 
periods of time, the operation of Measure  11 results in no imports of animals and animal products 
into Indonesia.  
7.325.   In addition, and as was the case for Measure 1, we note that the co -complai nants have 
also argued that Measure  11 has a negative effect on the competitive opportunities of imported 
                                                
1100 Indonesia 's first written submission, fn. 83.  
1101 Indonesia's  response to Panel question No.  94 
1102 Article 12A of MOT 46/2013, as amended, Exhibit JE -21. 
1103 New Zealand 's response to Panel question No.  49; comment s on response by Indonesia to Panel 
question no. 94. Un ited States' respo nse to Panel question No.  49; comment s on response by Indonesia to 
Panel Q uestion no. 94 . 
1104 Article 12A(3) -(4) of  MOT 46/ 2013, as amended, Exhibit JE -21. 
1105 New Zealand's first written submission, Figures 4 and 5; first opening statement, Figure 8; second 
written submission, para. 47.  WT/DS477/R • WT/DS478/R  
 
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  products . New Zealand, for instance, contend ed that measures such as this that restrict "market 
access " or "create uncertainty and affect investment p lans" have been held by a number of panels 
such as Colombia – Ports of Entry , China – Raw Materials  or US – Poultry (China)  to constitute 
restrictions in violation of Article XI:1.1106 For New Zealand, Measure 11 similarly restricts 
Indonesian market access a nd creates uncertainty for imported animals and animal products, 
thereby limiting imports contrary to Article XI:1 of the GATT 1994.1107 Likewise, t he United States 
refers to Colombia – Ports of Entry  where the panel found that a measure restricting imports f rom 
Panama to two Colombian ports had a limiting effect on imports because  "uncertainties, including 
access to one seaport for extended periods of time and the likely increased costs that would arise 
for importers operating under the constraints of the por t restrictions, limit competitive 
opportunities for imports arriving from Panama. "1108 The United States submit ted that Indonesia's 
application window s and validity periods are far more restrictive in that they wholly exclude 
US animals and animal products fr om entering Indonesia for four to six weeks each quarter or a 
total of four to six months each year.1109  
7.326.    We agree with the co -complainants that the way Measure  11 is designed and structured 
results in a limitation of the competitive opportunities of importe rs in practice because it restricts 
the market access of imported products into Indonesia.  
7.2.15.3   Conclu sion 
7.327.   For the reasons stated above, we find that Measure  11 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture a nd revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.16   Whether Measure  12 ( Periodic and fixed import terms ) is inconsistent with 
Article  XI:1 of the GATT 1994  
7.2.16.1   Arguments of the parties  
7.2.16.1.1   New Zealand  
7.328.   New Zealand claims th at Measure  12 has a limiting effect on imports, contrary to 
Article  XI:1 of the GATT 1994.1110 New Zealand submits that MOA Recommendations and Import 
Approvals collectively specify a number of terms that importers must comply with during a 
quarter, in partic ular, the quantity of products permitted to be imported during the quarter; a 
description of the type, category, cut and HS Code for the pro duct to be imported during the 
quarter; the country of origin of products permitted for importation during the quart er; and the 
port of entry into Indonesia to which products are permitted to be imported during the quarter.1111 
7.329.   New Zealand argues that the fixed licence terms restrict imports by imposing quarterly 
quantitative limits on bovine animals and animal products th at may be imported into Indonesia 
and that these restrictions are imposed through Import Approvals, which specify the maximum 
quantity of products that may be imported by an importer during each quarter.1112 For New 
Zealand, t he specification of maximum permi tted import quantities in Import Approvals effectively 
imposes a quota on imports of particular products for the duration of each quarter.1113 New 
Zealand is of the view that the incentive for importers to ensure they do not overestimate their 
required quanti ty is very strong, since an overestimation of quantity required will result in an 
importer failing to satisfy the 80% realization  requirement and this may result in the importer 
having its existing MOA Recommendations, Import Approvals and importer designa tion revoked, 
and having future applications for MOA Recommendations and Import Approvals declined.1114 
                                                
1106 New Zealand 's first written submission, para. 154 (referring to Panel Reports, Colombia – Ports of 
Entry , para. 7.240; China – Raw Materials , para. 7.1081; US – Poultry (China) , para. 7.454 ). 
1107 New Zealand 's first written sub mission, para. 154.  
1108 United States ' first written submission, para. 272 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.274).  
1109 United States ' first written submission, para. 272.  
1110 New Zealand 's first written submission, para. 1 63. 
1111 New Z ealand 's first written submission, para. 1 55.   
1112 New Zealand 's first written submission, para. 1 58 (referring to Beef Import Approval Example, 
Exhibit NZL -21). 
1113 New Zealand 's first written submission, para. 159; second written submission, para. 71.  
1114 New Zealand 's first written submission, para. 160.  WT/DS477/R • WT/DS478/R  
 
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  7.330.   New Zealand also submits that since MOA Recommendations and Import Approvals also 
require importers to specify the type, country of origin and port of entr y of the products that each 
importer may import during the relevant quarter, these terms are "locked in " at the 
commencement of the relevant quarter, with the effect that, during that quarter, importers are not 
able to import products of a different type, from another country, or through a different port than 
is specified in their Import Approval.1115 New Zealand argues that the panel in Colombia – Ports of 
Entry  confirmed that restrictions on the ports into which goods may be imported constituted a 
restrictio n on imports in violation of Article XI:1.1116 New Zealand claims that  in the present 
dispute, the Fixed Licence Terms in MOA Recommendations and Import Approvals result in 
importers hav ing fewer opportunities to import products into Indonesia and this has a limiting 
effect on imports contrary to Article XI:1.1117 Responding to Indonesia's arguments distinguishing 
Colombia – Ports of Entry from the present dispute, New Zealand argues that a key component of 
the panel's decision in that case was that for periods o f time, the ports available for use by 
importers were limited1118, something New Zealand claims is also present in this dispute, and that, 
more importantly, in this dispute, the restriction on ports of entry is only one component of the 
Fixed Licence Terms, w hich also "lock in " the type of product, its quantity, and country of origin for 
the relevant validity period.1119   
7.331.   New Zealand responds to Indonesia's argument that importers can maintain flexibility by 
selecting "broad " licence terms by submitting that thi s is incorrect since each Import Approval 
specifies a specific type of product, quantity, port of entry and country of origin and each MOA 
Recommendations specify a single port of entry and country of origin for each product. For New 
Zealand,  an importer m ust specify a "package " of terms comprising a single port, quantity and 
country of origin for each product it wishes to import when applying for an Import Approval.1120 
New Zealand contends that this is reflected in Indonesia's regulation s.1121 
7.332.   Responding to Ind onesia's argument regarding the decisions of private actors, New 
Zealand reiterates that, as with limited application windows and validity periods, the fixed licence 
term requirement is maintained through Indonesian regulations and does not result from the  
business decisions of private actors. New  Zealand clarifies that it is not challenging the specific 
terms that are selected by private importers in their MOA Recommendations and Import 
Approvals, but the requirement that importers fix these terms at the s tart of each validity 
period.1122 
7.2.16.1.2   United States  
7.333.   The United States claims that this measure is inconsisten t with Article XI:1 of the 
GATT  1994 because it is a restriction on importation within the meaning of Article XI:1.1123 
Additionally, the United States claim s that this requirement is not a duty, tax, or other charge, 
and, therefore, is within the scope of Article XI:1.1124 The United States argues that during each 
three -month period, Indonesia limits the imports of animals and animal products to products of 
the type, quantity, country of origin, and port of entry listed on the Recommendations and Import 
Approvals granted at the beginning of that period by prohibiting the importation of any animals 
and animal products if permits do not contain such specifications.  The United States also argues 
that once an import period begins, importers cannot apply for new permits to import different or 
additional products and thus imports are strictly limited to the type and volume of products 
specified on outstanding permits.1125 The United States submits that non -compliance with this 
requirement is sanctioned, including revocation of importers' Recommendations and ineligibility to 
                                                
1115 New Zealand 's first written submission, para. 161.  
1116 New Zealand 's first written submission, para. 163 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.275).  
1117 New Zealand 's first written subm ission, para. 163.  
1118 See Panel Report , Colombia – Ports of Entry , para. 7.274 , stating: "The uncertainties that arise from 
the ports of entry measure are substantial since importers may only access one seaport and one airport 
whenever the measure is tempor arily imposed, instead of the 11 ports open to importers of goods from points 
of departure other than Panama ".  
1119 New Zealand 's second written submission, para. 75.  
1120 New Zealand 's second written submission, para. 72.  
1121 New Zealand 's second written submis sion, para. 72 (ref erring to Article 30(d) and (h) of  
MOA 139/2014  which mention "Country of Origin " and "Point of Entry "). 
1122 New Zealand 's second written submission, para. 73.  
1123 United States ' first written submission, para. 274.  
1124 United States ' first wr itten submission, fn. 407.  
1125 United States ' first written submission, para. 274.  WT/DS477/R • WT/DS478/R  
 
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  obtain future Recommendations, revocation of Import Approvals and RI designations1126, and re -
exportatio n of non -conforming goods at the importer's expense.1127 The United States argues that 
therefore , once a period begins, importers cannot modify their orders to account for market or 
other developments.1128  
7.334.   The United States contends that the effects of this req uirement are that (i) imports that 
are not covered in valid Recommendations or Import Approval s granted at the beginning of the 
import period are effectively banned until the next period; (ii) only a set quantity of each type of 
product can be imported unt il the next period; (iii) products from WTO Members are restricted to 
the amounts originally requested by importers; and (iv) if the original port of entry is no longer 
commercially operational, the shipments cannot be redirected through a different port. The United 
States claims therefore that this requirement is a limitation or limiting condition on importation or 
a measure with a limiting effect on importation, and thus constitutes a "restriction " within the 
meaning of Article XI:1.1129 The United States ar gues that in India – Autos , the panel found that a 
trade balancing requirement restricted imports because there was a practical limit to the amount 
of products that companies would have the "desire and ability to export ", which would, in turn, 
limit the qu antity of products that they would be permitted to import.1130 The United States 
submits that the panel in Argentina – Import Measures  found that the measure at issue was an 
import restriction because, inter alia , it did not "allow companies to import as much  as they desire 
or need without regard to their export performance " and "impose[d] a significant burden on 
importers that is unrelated to their normal importing activity ".1131 The United States also argues 
that in Colombia – Ports of Entry , the panel found th at a measure restricting the entry of imports 
from Panama to two Colombian ports had a "limiting effect " on imports because "uncertainties, 
including access to one seaport for extended periods of time and the likely increased costs that 
would arise from im porters operating under the constraints of the port restrictions, limit 
competitive opportunities for imports arriving from Panama ".1132 
7.335.   Responding to Indonesia's argument that the trade -restrictiveness of this measure is the 
result of private choices and, th erefore, is not a measure "instituted or maintained " by 
Indonesia1133, the United States submits  that this assertion is incorrect because (i) a variety of 
restrictions imposed by Indonesia’s import licensing regime severely curtail the ability of importers 
to freely determine the quantity, country of origin or other terms included in their applications for 
Recommendations or RIPHs and Import Approvals ,1134 and (ii) the measures the co -complainants 
are challenging are not the specific terms of any or each importer ’s licen ce but, rather, the inability 
of importers to import products of a different type, q uantity, country of origin  or port of entry than 
those specified on their import permits once an Import Approval validity period has begun.1135  
7.2.16.1.3   Indonesia  
7.336.   Indonesia r efers to its  position under Article 4.2 of the Agreement on Agriculture on how 
the co -complainants ' claims with respect to the application windows and validity periods for import 
licences, the self -selected import licence terms and the realization  requirem ent for imports must 
fail.1136 Indonesia contends that it maintains temporary "fixed" licence terms only for import 
administration purposes and that it gives freedom to the importers in respect of the products, the 
designated port of entry, and the country of  origin they wish to import from. For these reasons, 
Indonesia submits that the import terms are fully self -determined . Indonesia also submits that 
importers are free to alter their terms of importation from one licence application to the next, 
meaning tha t the "terms " are only static for one validity period at a time. According to Indonesia , 
                                                
1126 United States ' first written submission, para. 277 (referring to Article 39(e) of MOA 139/2014, as 
amended, Exhibit JE -28 and Article 30(1) of  MOT 46/2013, as amended, Exhib it JE-21). 
1127 United States ' first written submission, para. 277 (referring to  Article 30(2) -(3) of MOT 46/2013, as 
amended, Exhibit JE -21). 
1128 United States ' first written submission, para. 277.  
1129 United States ' first written submission, para. 279.  
1130 United  States ' first written submission, para. 279 (referring to Panel Report, India – Autos, 
para. 7.268).  
1131 United States ' first written submission, para. 279 (referring to Panel Report, Argentina – Import 
Measures , para. 6.474).  
1132 United States ' first written  submission, para. 279 (referring to Panel Report, Colombia – Ports of 
Entry , para. 7.274;  Panel Report, Argentina – Import Measures , para. 7.274).  
1133 United States ' second written submission, para. 77 (referring to Indonesia 's first written submission, 
para. 138).  
1134 United States ' second written submission, para. 78.  
1135 United States ' second written submission, para. 79.  
1136 Indonesia 's first written submission, para. 163.  WT/DS477/R • WT/DS478/R  
 
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  importers can easily re -assess estimated shipment volumes and submit a new application for the 
current validity period (provided that the application windows are still  open) or wait for the next 
validity period, and submit a new application.1137 
7.2.16.2   Analysis by the Panel  
7.337.   The task before the Panel is to establish whether, as claimed by the co -complainants1138, 
Measure  12 is inconsistent with Article XI:1 of the GATT  1994 because i t constitutes a restriction 
having a limiting effect on import ation of ani mals and animal products imported  into Indonesia and 
limits the competitive opportunities of importers and imported products . 
7.338.   We note that the co -complainants argue d that Measure  12 constitutes a restriction on 
importation1139, and that it is not a duty, tax, or other charge, and, therefore, is within the scope 
of Article XI:1.1140 New Zealand argue d that the components of Indonesia's import licensing 
regime for animals, animal products and  horticultural products, which include Measure  12, 
constitute prohibitions or restrictions made effective through an "import licence " or, alternatively, 
an "other measure ".1141 The United States submit ted that Article XI:1 applies to any "restriction, " 
includ ing those "made effective through quotas, import or export licenses or other measures ."1142 
7.339.   We observe that Indonesia has not contested the co -complainants' characterisation of 
Measure  12.1143 Rather, it has responded that its measures are outside the scope of Article XI:1 
because they are automatic import licensing regimes .1144 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article  XI:1 of the GATT 1994. In addition, Indonesia has attempted to exclude 
Measure  12 from the scope of this provision by arguing that it is not a measure  "instituted or 
maintain ed by Indonesia " but the result of decisions by private actors.1145 We refer to 
Section 7.1.3 above  where we concluded that Measure 12 is a measure taken by Indonesia. Given 
the description of Measure  12 in Section 2.3.3.3 above , we concur with the co -complainants that 
Measur e 12 is not a duty, tax, or other charge and it is therefore not excluded explicitly from the 
scope of Article  XI:1 of the GATT  1994.  
7.340.   As with previous measures1146, we proceed to examine whether the co -complainants have 
demonstrated that Measure  12 prohibits or restricts trade, rather than examining the means by 
which such prohibition or restriction would be made effective. In doing so, we will determine 
whether  the co-complainant s have demonstrated that Measure 12 has a limiting effect on 
importation . To carr y out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  12, within its relevant context.  
7.341.   As described in Section 2.3.3.3 above , we observe that Measure 12 cons ists of the 
requirement to only import animals and animal products within the terms of the Recommendations 
and Import Approvals, the prohibition of importing types/categories of carcasses, meat, and/or 
their processed products other than as specified  in Import Approvals  and Recommendation s, and 
the prohibition of requesting changes to the elements specified in Recommendations once they 
have been issued .1147 This measure is implemented b y Indonesia through Articles 30, 33(a)-(b) and 
39(e)  of MOA 139/2014 , as am ended, and Article  30 of MOT 46/2013 , as amended.  
7.342.   Pursuant to these provisions, MOA Recommendations and Import Approvals must specify, 
inter alia , the quantity of products permitted to be imported; a description of the type, category, 
cut and HS Code for t he products to be imported; the country of origin of products permitted for 
importation; and the port of entry into Indonesia through which products are permitted to be 
                                                
1137 Indonesia 's second written submission, para. 168.  
1138 New Zealand 's first written submis sion, paras. 157 and 163; United States ' first written submission, 
para. 274.  
1139 New Zealand 's first written submission, para. 163; United States ' first written submission, 
para. 274. 
1140 New Zealand 's first written submission, para. 2 08; United States ' first written submission, fn. 407.  
1141 New Zealand 's first written submission, para. 203.  
1142 United States ' first written submission, para. 142.  
1143 Indonesia 's response to Panel question No.  10. 
1144 Indonesia 's second written submission, para. 165.  
1145 Indonesia 's first written submission, paras. 138 and 163.  
1146 See, for instance,  paragraph  7.76 above.  
1147 New Zealand 's Panel Request, pp. 4 -7; United States ' Panel Request, pp. 4 -7; New  Zealand 's first 
written submission, para s. 49-51; United  States ' first written submission, para. 117.  WT/DS477/R • WT/DS478/R  
 
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  imported.  Importers are prohibited from requesting changes to the country of origin, po int of 
entry, type/category of carcasses, meat, and/or their processed products once a Recommendation 
has been issued.  If the quantity, type, business unit, and/or country o f origin of imports is not in 
accordance with the  relevant  Import Approval , those i mports  will have to be re -exported , at the 
importer's cost . 
7.343.   We observe that Indonesia does not deny that these terms cannot be modified but submits 
that importers are free to alter them from one licence application to the next.1148 In response to a 
question f rom the Panel to clarify the extent to which these terms can be effectively modified, 
Indonesia replies that in case an importer desired to increase the original quantity of imports set 
out in the import documents, such an importer would have two options: (i) to submit another 
application specifying greater quantities, if the application window is still open and the RIPH has 
not been issued yet, or (ii)  to submit an application specifying a greater quantity during the next 
application window. Similarly, if an importer seeks to reduce the quantity of its imports compared 
to the amount previously sought in its application, such an importer would have two options: (i)  to 
reduce the quantity by up to 20% without penalty, or (ii)  reduce the quantity by more than  20% 
and risk the imposition of a penalty.1149  
7.344.   We note that both co -complainants are focusing their argumentation on the operation of 
this Measure as a quota on the one hand , as well as its detrimental impact on competitive 
opportunities  on the other .1150 For in stance, New Zealand consider ed that the specification of 
maximum permitted import quantities in Import Approvals effectively imposes a quota on imports 
of particular products for the duration of each quarter.1151 New Zealand also argue d that the 
incentive for  importers to ensure they do not overestimate their required quantity is very strong, 
since an overestimation of quantity required will result in an importer failing to satisfy the 80% 
realization  requirement and this may result in the importer having its existing MOA 
Recommendations, Import Approvals and Importer Designation revoked, and having future 
applications for MOA Recommendations and Import Approvals declined.1152 In its view,  the fixed 
licence terms in MOA Recommendations and Import Approvals have a limiting effect on 
importation  contrary to Article XI:1  because importers hav e fewer opportunities to impor t products 
into Indonesia.1153  
7.345.   In the same vein, t he United States contend ed that the results of this requirement are that 
(i) imports of certain produ cts for which no Recommendations or Import Approval s were granted 
at the beginning of the import period are effectively banned until the next period; (ii) only a set 
quantity of each type of product can be imported until the next period; (iii) products fro m WTO 
Members are restricted to the amounts originally requested by importers; and (iv) if the original 
port of entry is no longer available or commercially feasible to use, the products cannot enter 
through a different port.1154 
7.346.   Similar to Measure 2, when ex amining the design, architecture and revealing structure of 
Measure  12, we observe that the various requirements it embodies and the way in which they 
interact, have the effect of an import quota as this measure  limits the amount and type of 
products that can be imported and the ports of entry to those strictly specified in the given 
MOA Recommendation and Import Approval . The effect of fixing the quantity or the type of 
product that can be imported for each validity period, i.e. each quarter, is similar to  that of a quota 
since for that period of time there is a maximum quantity and type of products that can be 
imported and these parameters cannot be modified during the four -month validity period. In other 
words,  the effect of this measure can be compared t o that of a four -month quota. We note that, as 
Indonesia is arguing, the amount of the quota would be set by the importers because  they are the 
ones determining the amounts they request in their Import Approvals. In this sense, the actual 
amount of the quo ta is not being determined by Indonesia but rather by the actions of the 
importers. However, the existence of a system which has the effect of creating a quota for every 
four-month period is the result of the manner in which Indonesia designed and structur ed this 
                                                
1148 Indonesia 's second written submission, para. 168.  
1149 Indonesia's  response to Panel question No.  15. We note that Indonesia mentions that the 
80% realization  requirement for animals and animal p roducts will be lifted imminently once a new regulation is 
adopted.  
1150 See, for instance, New Zealand 's first written submission, para. 227; second written submission, 
para. 198; United States ' first written submission, para. 164. 
1151 New Zealand 's first writ ten submission, para. 159; second written submission, para. 71.  
1152 New Zealand 's first written submission, para. 160.  
1153 New Zealand 's first written submission, para. 163.  
1154 United States ' first written submission, para. 279.  WT/DS477/R • WT/DS478/R  
 
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  Measure. We recall that in Section  7.1.3 above  we observed that the fact that private actors are 
free to make various decisions in order to comply with a measure does not preclude a finding of 
inconsistency. On the c ontrary, "where private actors are induced or encouraged to take certain 
decisions because of the incentives created by a measure , those  decisions are not 'independent'  of 
that measure ".1155 The existence of a system which has the effect of creating a quota f or every 
four-month period can be perceived  as the result of the manner in which Indonesia designed and 
structured this measure. We thus  remark  the limiting effect of this Measure in terms of volume of 
imports.  
7.347.   We also observe that , by restricting the impo rt licensing parameters within which 
importers operate , this Measure  results in fewer opportunities to import animals and animal 
products into Indonesia, with such restrictions having significant impact on the  competitive 
opportunities available to importe d products.1156 We agree with the co -complainants1157 that the 
impossibility to change the listed specifications within the time -frame of a single validity period, or 
even apply to import new or additional products during the same validity period, means that 
importers cannot take advantage of market opportunities or mitigate risks inherent in the global 
supply chain  and adjust to new developments in the market situation . As argued by the United 
States, once a validity period begins and the MOA Recommendations and  Import Approvals have 
been issued, importers would be unable to make changes based on market or other developments 
that may be necessary to adjust to changes in the current demand, for instance because certain 
products are no longer needed, the original p ort of entry is no longer available  or because there 
has been a change in the circumstances of the importer itself.1158 Indonesia contended that 
importers are free to preserve flexibility by identifying broad terms on their import approvals.1159 
We note that thi s would not change the mentioned situation since the restrictions that the co -
complainants are challenging occur not when the importer is applying for MOA Recommendations 
and Import Approvals, but rather, once they have been issued and the validity period has 
commenced.  
7.348.   Placing Measure  12 in the context of Indonesia's import licensing regime for animals and 
animal products, we observe that other requirements operate together with Measure  12 and 
exacerbate the effects of this Measure. As argued by New Zeala nd, Measure 13 (80% realization 
requirement) creates  strong incentive s for importers to ensure they do not overestimate their 
requested  quantity, because  an overestimation of the quantity requested in the import documents 
can lead to the importer failing t o import  enough products to satisfy the 80% realization  
requirement . This may result in the importer having its existing MOA Recommendations, Import 
Approvals and Importer Designation revoked, and having future applications for MOA 
Recommendations and Impo rt Approvals declined.1160  
7.2.16.3   Conclu sion 
7.349.   For the reasons stated above, we find that Measure  12 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limit ing effect on importation . 
7.2.17   Whether Measure  13 ( 80% realization  requirement ) is inconsistent with 
Article  XI:1 of the GATT 1994  
7.2.17.1   Arguments of the parties  
7.2.17.1.1   New Zealand  
7.350.   New Zealand claims that the 80% realization  obligation requires importers to import no 
less than 80% of the quantity of animals and animal products specified in their Import Approvals 
over a 12 -month period1161 and tha t this constitutes a "restriction " on imports within the meaning 
of Article XI:1, both as a discrete measure and in particular when v iewed in conjunction with the 
                                                
1155 Appellate Body Report, US – COOL, para. 291. (emphasis original)  
1156 New Zealand 's first written submission, para. 163.  
1157 New Zealand 's first written submission, paras. 159 and 162; United States ' first written submission, 
para. 277.  
1158 United States ' first written submission, para. 277.   
1159 Indonesia 's first written submission, para. 105.  
1160 New Zealand 's first written submission, para. 160.  
1161 New Zealand 's first written submission, par a. 164 (referring to Article 13 of  MOT 46/2013 , Exhibit 
JE-18). WT/DS477/R • WT/DS478/R  
 
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  Fixed Licence Terms described earlier.1162 According to  New Zealand, the effect of the  80% 
realization  requirement is to induce importers to reduce the quantities requested in their quarterly 
MOA Recommendations and Import Approv als.1163 New Zealand submits that the Ministry of Trade 
has the ability to sanction importers for non -compliance with the realization  requirement through 
(i) the suspension of an importer's Importer Designation if it does not satisfy the 80% realization  
requirement1164; (ii) the revocation of an importer's Importer Designation if it does not satisfy the 
80% realization  requirement t wice1165; (iii) and the imposition of fines for not complying with the 
provisions of MOT 46/2013, including the 80% realization  requirem ent.1166  
7.351.   New Zealand submits that these sanctions therefore impose strong incentives on importers 
to comply with this requirement, with failure resulting in an importer being effectively unable to 
continue to import animal products.1167 New Zealand contends tha t because importers must 
anticipate the quantity of imports that they will require during the validity period of an Import 
Approval, they are induced to conservatively estimate, or underestimate, the quantities requested 
in Import Approvals to ensure they satisfy the 80% realization  requirement during the applicable 
period. New Zealand explains that the ability to import a sufficient quantity to meet this threshold 
will necessarily be affected by a range of factors beyond an importer’s control, including ch anges 
in domestic prices, world prices, supplier availability of supply, domestic demand, shipping 
availability, and port availability. For New Zealand, importers will naturally factor in these variables 
and underestimate the specified quantity to ensure w ith greater certainty, that they will meet the 
80% realization  requirement.1168 For New Zealand, this has a limiting effect on  imports, as it 
imposes a practical constraint on the quantity that importers are able to request within a fixed 
time-frame without b eing at risk of not satisfying this requirement and thus losing their ability to 
import.1169  
7.352.   New Zealand argues that in India – Autos , the panel considered that a measure which 
"induced [an importer] … to limit its imports of the relevant products " was a res triction within the 
meaning of Article XI:1.1170 New Zealand claims that Indonesian importers are also imposed  with a 
practical threshold on the quantity that they request in an Import Approval, as they must be 
certain that they will be able to import at leas t 80%  of their aggregated Import Approval quantities 
over the course of a year .1171 New Zealand also maintains that the limiting effect of the  80% 
realization  requirement is magnifie d when combined with the periodic and fixed import terms since 
a number of im port terms are locked in prior to the commencement of a quarter and the need to 
comply with these terms limits the flexibility available to importers to satisfy the 80% realization  
requirement and therefore further induces importers to reduce the quantitie s they request in 
Import Approvals.1172  
7.353.   Responding to Indonesia's arguments that the penalties it imposes for non -compliance 
with this requirement are "fair, balanced, and narrowly constructed "1173, New Zealand submits that 
this argument is untenable since for an importer, whose business and livelihood is dependent on 
its ability to import, the threat of losing this right for two years is serious and disproportionate to 
Indonesia's vagu ely stated objective of "administrative efficiency through import licensing ".1174   
7.354.   Responding to Indonesia's argument  that the measure "serves as a safeguard against 
importers grossly overstating their anticipated imports " and that the measure "is not meant to 
                                                
1162 New Zealand 's first written submission,  para. 164.  
1163 New Zealand 's first written submission, para. 166.  
1164 New Zealand 's first written submission, par a. 166 (referring to Article 26 of  MOT 46/2013 , Exhibit 
JE-18). 
1165 New Zealand 's first written submission, para. 166 (referring to Article 2 7(a) of  MOT 46/2013 , Exhibit 
JE-18). 
1166 New Zealand 's first written submission, par a. 166 (referring to Article 30 of  MOT 46/2013 , Exhibit 
JE-18). 
1167 New Zealand 's first written submission, para. 167; second written submission, para. 88.  
1168 New Zealand 's second writ ten submission, para. 87.  
1169 New Zealand 's first written submission, para. 168.  
1170 New Zealand 's first written submission, para. 169; second written submission, para. 91 (referring to 
Panel Report, India – Autos , para. 7.268).  
1171 New Zealand 's first written s ubmission, para. 169.  
1172 New Zealand 's first written submission, para. 160.  
1173 New Zealand second written submission, para. 89 (referring to Indonesia 's first written submission, 
paras. 79 and 142).  
1174 New Zealand's  second written submission, para. 89.  WT/DS477/R • WT/DS478/R  
 
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  constrain imports; there is no upward limit to the amount an importer can import "1175, 
New Zealand contends that this argument cannot be reconciled with its contention that the 
purpose of the measure is to prevent "overstatement " of imports by limiting th e amount specified 
in Import Approval applications . For New Zealand, this is s o since requiring importers to limit their 
estimates implies that the measure imposes a constraint on the maximum quantity that importers 
can specify in their Import Approvals, and thereby acts to limit the quantity that importers can 
import over that quarter.1176 
7.355.   Responding to Indonesia's arguments that its "concerns regarding overstatement of 
imports apply equally to imports of horticultural products, animals and animal products " and are 
specific to the risks posed by "perishable food items " that do not appl y to other products such as 
"widgets "1177, New Zealand submits that Indonesia does not apply the 80% realization  requirement 
equally to imports of all animals and animal products since it only applies to the bo vine animals 
and animal products listed in Append ix I of MOT 46/2013 , and not to the wider range of animals 
and animal products listed in Appendix II of MOT 46/2013 .1178 For New Zealand, the fact that this 
requirement applies only to bovine products and n ot to other animal products of a similar nature, 
confirms that the measure is not intended to "guarantee proper quarantine processes " or "other 
administrative concerns ", as Indonesia contends1179, but rather that the measure is specifically 
directed at limiting imports of bovine animals.1180 
7.356.   Responding to Indonesi a's arguments that the measure incorporates flexibility "to account 
for exigencies in the global supply chain " and that the "Complainants have been unable to point to 
a single instance in which a catastrophic supply chain event has caused an importer to fa ll below 
the 80 % realization  requirement "1181, New Zealand submits that the 80% realization  requirement 
systemically limits importation by requiring importers to conservatively estimate or underestimate 
their desired quantity every time they apply for an Impo rt Approval and, accordingly, importation 
is limited at all times, not just in the event of a "catastrophic supply chain event ".1182 
7.2.17.1.2   United States  
7.357.   The United States claims that Indonesia's realization  requirement for Appendix I products 
is a "restriction " under Article XI:1 of the GATT 1994 because it is a condition on importation that 
induces importers to reduce the quantity of products that they request permission to import and 
may render the importer ineligible to import products if that c ondition is not me t. The 
United  States submits that the requirement is therefore a limitation or limiting condition on 
importation or has a limiting effect on imports.1183 Additionally, the United States claims that this 
requirement is not a duty, tax, or other charge, and, th erefore, is within the scope of 
Article  XI:1.1184 The United States submits that each importer of Appendix I products (cattle, beef 
meat, and offal) is required to import "at least 80  percent " of the products covered by its Import 
Approvals each year.1185 The Un ited States argues that this requirement is monitored on a monthly 
basis, as each RI designee is required to submit monthly reports setting out all its imports of 
animals and animal products and the amount of products remaining under its Import Approval.1186 
The United States claims that the importer's RI designation is suspended if an RI designee does 
                                                
1175 New Zealand's  second written submission, para. 90 (referring to Indonesia 's first written 
submission, para. 79).  
1176 New Zealand's  second written submission, para. 91.  
1177 New Zealand's  second written submission, para. 92 (referring to Indonesia 's response to Pane l 
question No.  16). 
1178 New Zealand 's second written submission, para. 92.  
1179 New Zealand's  second written submission, para. 92 (referring to Indonesia 's response to Panel 
question No. 16 ). 
1180 New Zealand's  second written submission, para. 92.  
1181 New Zealand's  second written submission, paras. 93 -94 (referring to Indonesia 's first written 
submission, para s. 79-80). 
1182 New Zealand second 's written submission, paras. 93 -94. 
1183 United States ' first written submission, para. 283 (referring to Appellate Body Report, Argentina – 
Import Measures , para. 5.217 and China – Raw Materials , para. 320) ; second written submission, paras. 19 
and 82.  
1184 United States ' first written submission, fn. 418.  
1185 United States ' first written submission, para. 284 (referring to Article 13 of  MOT 46/2013, as 
amended, Exhibit JE -21). 
1186 United States ' first written submission, para. 284 (referring to Appendix IV of MOT 46/2013, as 
amended , Exhibit JE -21). WT/DS477/R • WT/DS478/R  
 
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  not fulfil this reporting requirement three times1187 and if at the end of the year, the importer has 
not met the 80 % realization  requirement.1188  
7.358.   According to the U nited States, if an importer fails to meet the requirement twice, its RI 
designation is revoked and the importer cannot reapply for at least two years.1189 The 
United  States argues that , similar to the same restriction on horticultural products, importers are  
concerned that over -supply of products at the end of an import period will force them to sell 
products at a loss or lose their eligibility to import.1190 According to the United States, in the 
animal products context the reference price requirement makes imp orting large quantities during 
short periods of time to comply with the realization  requirement even riskier, as it could cause the 
price to drop below the reference price  and cut off imports altogether.1191 For the United States, 
importers have a strong ince ntive to ensure that they do not apply for and obtain Import 
Approvals for greater quantities of products than they are certain they can profitably import and, 
therefore, apply to import lower quantities of products than t hey otherwise would, absent the  80% 
realization  requirement. Consequently, the United States submits that the realization  requirement 
has a limiting effect on imports.1192  
7.359.   The United States contends that the panel in India – Autos  considered a measure with a 
similar limiting effect – namely,  a trade balancing requirement placed on importers of auto kits 
and components – and found it to be a "restriction " under Article XI:1.1193 The United  States 
claims that the 80% realization  requirement has a similar limiting effect, in that it causes 
importer s to limit the amount that they request in their Import Approval applications, which then 
limits the amount they are allowed to import.1194  
7.360.   Responding to Indonesia's arguments that the realization  requirement is not a restriction 
because it is "a function of  importers’ own estimates and because it can be changed by the 
importer at will from one validity period to the next "1195, the United States argues that importers 
do not "choose " to have their eligibility to import revoked if they fail to import a set percent age of 
the products listed on their Import Approvals and, therefore, they do not "choose " to 
underestimate the quantity for which they apply in order to avoid this sanction. For the United 
States, the importers ' decisions to reduce the quantities for which  they apply is a compelled 
response to Indonesia' s realization  requirement.1196 The United States also contends that, contrary 
to Indonesia's position, the evidence submitted by the co -complainants is not "anecdotal 
conjecture "1197, but it represents the experie nce of market actors who regularly operate in the 
context of Indonesia’s import licensing regime and who therefore know how the realization  
requirement operates in practice and can attest to its limiting effect on importation.1198 
7.2.17.1.3   Indonesia  
7.361.   Indonesia refers t o its position under Article 4.2 of the Agreement on Agriculture on how 
the co -complainants' claims  must fail  regarding the application windows and validity periods for 
import licences, the self -selected import licence terms and the realization  requirement  for 
imports .1199 Indonesia contends that the 80% import realization  requirement does not violate 
Article X I:1 of th e GATT because there is no evidence to suggest that  the realization  requirement 
                                                
1187 United States ' first written submission, para. 284 (referring to Article 26  of MOT 46/201 3, as 
amended, Exhibit JE -21). 
1188 United States ' first written submission, para. 284 (referring to Article 25 of MOT 46/2013, as 
amended, Exhibit JE -21). 
1189 United States ' first written submission, para. 284 (referring to Articles 27(a) and 29  of 
MOT 46/2013 , as amended, Exhibit JE -21). 
1190 United States ' first written submission, para. 286 (referring to paras. 171 -174 of United States ' first 
written submission; NHC Statements, p. 3, Exhibit USA -21). 
1191 United States ' first written submission, para. 286.  
1192 United States ' first written submission, para. 287; second written submission, para. 19 . 
1193 United States ' first written submission, para. 288 (referring to Panel Report, India – Autos , 
para. 7.268).  
1194 United States ' first written submission, para. 288.  
1195 United States ' second written submission, para. 8 (referring to Indonesia 's first written submission, 
para. 107).  
1196 United States ' second written submission, para. 82.  
1197 United States ' second written submission, para. 21 (referring to Indonesia 's first written submission, 
para. 142).  
1198 United States ' second written submission, para. 21.  
1199 Indonesia 's first written submission, para. 163.  WT/DS477/R • WT/DS478/R  
 
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  has had an adverse impact on trade flows .1200 Indonesia contends t hat this requirement serves as 
a safeguard against importers grossly  overstating their anticipated imports and that if there is any 
change in the market the importe rs can always change their requested volume in the next 
periods.1201 Indonesia submits that it recognizes the need for flexibility to account for exigencies in 
the global supply chain and that is why the realization  requirement only asks importers to achieve 
80% instead of 100% of their anticipated imports. For Indonesia, this ratio provides the pro per 
balance between incentivizing importers to provide realistic estimates of anticipated volume on the 
one hand, and allowing for a reasonable margin of error before penalties are applied .1202 Indonesia 
also contends that the co -complainants have been unable  to point to a single instance in which a 
catastrophic supply chain event has caused an impo rter to fail to comply with the  80% 
requirement  and subsequently l ose its importer designation .1203 
7.362.   Indonesia also submits  that MOT 5/2016 , for animal s and animals pro ducts, and 
MOT 71/2015 , for horticultural products, have eliminated the 80% realization  requirement and, as 
such it is no longer in effect in Indonesia.1204 
7.2.17.2   Analysis by the Panel  
7.363.   The task before the Panel is to establish whether, as claimed by the co -complain ants1205, 
Measure  13 is inconsistent with Article XI:1 of the GATT  1994 because it constitutes a restriction 
having a limiting effect on import ation of animals and animal products import ed into Indonesia. In 
particular, we are to determine whether Measure  13 compels importers to limit their imports, by 
inducing them to reduce the amounts they request in their applications for Import Approvals.  
7.364.   We commence by  observing that the co -complainants argue d that Measure 13 constitutes 
a restriction on importation1206, and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.1207 New Zealand argue d that the components of Indonesia's 
import licensing regime for animals, animal products and horticultural products, which include 
Measu re 13, constitute prohibitions or restrictions made effective through an "import licence " or, 
alternatively, an "other measure ".1208 The United States submit ted that Article XI:1 applies to any 
"restriction, " including those "made effective through quotas, im port or export licenses or other 
measures ".1209 
7.365.   We observe that Indonesia has not contested the co -complainants' characterisation of 
Measure  13.1210 Rather, it has responded that its measures a re outside the scope of Article  XI:1 
because they are automatic impor t licensing regimes.1211 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the descriptio n of Measure  13 in Section 2.3.3.4 
above , we concur with the co -complainants that Measure  13 is not a duty, tax, or other charge and 
it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.366.   As with the previous measures1212, we proceed to examine whether the co -complainants 
have demonstrated that Measure  13 prohibits or restricts trade, rather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, w e will determine 
whether the co -complainants have demonstrated that Measure  13 has a limiting effect on 
importation . To carry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  13, within its relevant context.   
                                                
1200 Indonesia 's second written submission, para. 172.  
1201 Indonesia 's second written submission, para. 173.  
1202 Indonesia 's second wr itten submission, para. 173.  
1203 Indonesia 's second written submission, para. 174.  
1204 Indonesia 's second written submission, para. 176.  
1205 New Zealand 's first written submission, para. 1 64; United States ' first written submission, 
para. 283.  
1206 New Zealand 's first written submission, para. 1 64; United States ' first written submission, 
para. 283. 
1207 New Zealand 's first written submission, para. 2 08; United States ' first written submission, fn. 418.  
1208 New Zealand 's first written submission, para. 203.  
1209 United Sta tes' first written submission, para. 142.  
1210 Indonesia 's response to Panel question No.  10. 
1211 Indonesia 's second written submission, para. 67.  
1212 See, for instance, paragraph  7.76 above.  WT/DS477/R • WT/DS478/R  
 
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  7.367.   As described in Section 2.3.3.4 above , Measure 13 consists of the requirement whereby 
RIs must import at least 80% of each type of product covered by their Import Approvals every 
year.1213 This Measure  is implemented by Indonesia by means of Articles 13 , 25, 26 and 27 of 
MOT 46/2013 , as amended.  Pursuant to the above provisions, RIs are required to import, on an 
annual basis, 80% of the quantity of each type of a nimal and animal product  specified in their 
Import Approvals . Failing to fulfil the 80% realization  requirement  carries the penalty of 
suspension or revocation of the RI  designation.   
7.368.   We observe that central to the co -complain ants' argumentation is the alleged limiting 
effect in the importers' compe titive opportunities resulting from the 80% realization  requirement.  
For instance, New Zealand contended that  the effect of the 80% realization  requirement is to 
induce importers to reduce the quantities requested in their quarterly MOA Recommendations and  
Import Approvals1214 because , since importers must anticipate the quantity of imports that they 
will require during the validity period of an Import Approval, they are induced to conservatively 
estimate, or underestimate, the quantities requested in Import A pprovals to ensure they satisfy 
the 80% realization  requirement during the applicable period. New Zealand explain ed that the 
ability to import a sufficient quantity to meet this threshold will necessarily be affected by a range 
of factors beyond an importe r’s control, including changes in domestic prices, world prices, 
supplier availability of supply, domestic demand, shipping availability, and port availability. For 
New Zealand, importers will naturally factor in these variables and underestimate the reque sted 
quantity to ensure with greater certainty, that they will meet the 80% realization  requirement.1215  
7.369.   Similarly, the United States contended that importers have a strong incentive to ensure 
that they do not apply for and obtain Import Approvals for greate r quantities of products than they 
are certain they can profitably import and, therefore, apply to import lower quantities of products 
than they otherwise would, absent the 80% realization  requirement. Consequently, the United 
States submit ted that the realization  requirement has a limiting effect on imports.1216 We note that 
the United States argue d that, similar to the same restriction on horticultural products, importers 
are concerned that over -supply of products at the end of an import period will force th em to sell 
products at a loss or lose their eligibility to import.1217 According to the United States, in the 
animal products context, Measure 16 (Beef reference price ) makes importing large quantities 
during short periods of time to comply with the realizati on requirement  even riskier, as it could 
cause the price to drop below the reference price and cut off imports altogether.1218 
7.370.   If we look at the design, architecture  and revealing structure of this measure, we note that 
Measure  13, as was the case with Measur e 3, does not per se limit the quantity of imports of 
animals and animal products that can come into Indonesia. Measure 13 requires importers to 
effectively import a large percentage of the amounts requested in their  applications for  Import 
Approvals but d oes not create an outright prohibition on the importation of animals and animal 
products.  Nonetheless, this Measure includes enforcement rules which provide for severe penalt ies 
for not complying with the 80% realization  requirement . Indeed, pursuant to Ar ticles 26 and 27 of 
MOT 46/2013 , as amended , confirmation as an RI can be either suspended or revoked.  We note 
that, by its very nature, the possibility of experiencing severe penalties, which may mean the loss 
of the importer's commercial livelihood, reas onably constitutes an incentive for importers to 
comply with the 80% realization requirement.  
7.371.   We refer to our analysis in paragraph  7.130 above  and note that similar to Measure  3, the 
effect of Measure 13 may also vary depe nding on the importer's situation; in particular, on its 
projections of how many animals and animal products it expects to sell and import in a given 
period of time, its competitive situation, market conditions and how risk -averse the importer might 
be. No netheless, we believe that in any case, though there might be a difference in the degree 
that Measure  13 affects the decisions of importers of how much to request in their  applications for  
Import Approvals, any importer will be induced to be more conservat ive in its estimations. In our 
view, this Measure exacerbates  the risk inherent in conducting trade transactions. We thus 
consider that the design, architecture and revealing structure of Measure  13 shows that this 
                                                
1213 New Zealand 's Panel R equest, pp. 4 -7; United States ' Panel Request, pp. 4 -7; New  Zealand 's first 
written submission, para. 52; United  States ' first written submission, para. 122.  
1214 New Zealand 's first written submission, para. 166.  
1215 New Zealand 's second written submission, pa ra. 87.  
1216 United States ' first written submission, para. 287; second written submission, para. 19  
1217 United States ' first written submission, para. 286 (referring to United States ' first written 
submission , paras. 171 -174; NHC Statements, p. 3, Exhibit USA -21). 
1218 United States ' first written submission, para. 286.  WT/DS477/R • WT/DS478/R  
 
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  Measure has a limiting effect in terms of  volume of imports of animals and animal products into 
Indonesia.  
7.372.   Looking at the Measure in its context, we note that, as New Zealand explain ed, the limiting 
effect of the 80% realization  requirement is "magnified " when combined with Measure  12 because 
a number of import terms are locked in prior to the commencement of a quarter and the need to 
comply with these terms limits the flexibility available to importers to satisfy the 80% realization  
requirement and therefore further induces importers to reduce t he quantities they request in their 
applications for Import Approvals.1219 We further note that, as explained by the United  States, the 
limiting effect of Measure  13 can also be perceived as being exacerbated when combined with 
Measure  16 relating to the beef reference price. This is so because the reference price requirement 
for these products makes importing large quantities during short periods of time to comply with 
the realization  requirement even riskier, as it could cause the price to drop below the reference 
price and cut off imports altogether.1220 Similar to what we stated on paragraph 7.131 above, one 
can reasonably understand that the existence of the reference price requirement may make 
importing large quantities during  short periods of time in order to satisfy  the realization  
requirement even riskier  because it may result in the price  of beef dropping below the reference 
price. 
7.373.   Indonesia contends that there is no evidence to suggest that the realization  requirement 
has had an adverse impact on trade flows .1221 As explained in Section  7.2.3.2.2 above , the 
limitation on imports "need not be demonstrated by quantifying the effects of the measure at 
issue".1222 Nonetheless , as pointed out by the Uni ted States, since the dynamics of this measure 
are the same as the ones for Measure 31223, the evidence presented by the co -complainants in the 
context of Measure  31224 may also serve to illustrate the limiting effect of Measure  13.  
7.374.   To conclude, we note that as  with Measure 3, Measure 13 is similar to the measures 
examined by the panel in India – Autos . That  panel  found that a measure that did not set an 
absolute numerical limit on imports  but induced importers to limit their imports as a consequence 
of the obli gation to satisfy an export commitment imposed by India1225 amounted to an import 
restriction, where the degree of effective restriction resulting from the measure varied from 
signatory to signatory depending on several factors. For the panel in that dispute,  a manufacturer 
was in no instance free to import, without commercial constraint, as many products as it wished 
without regard to its export opportunities and obligations.1226 The 80% realization requirement 
acts in a similar way by incentivizing  importers to  limit the amount that they request in their 
import approval applications, which, in turn, restricts the quantity of products they are allowed to 
import.  
7.2.17.3   Conclu sion 
7.375.   For the reasons stated above, we find that Measure  13 is inconsistent with Article XI : 1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.18   Whether Measure  14 (Use, sale and distribution of imported bovine meat and 
offal requirements ) is inconsistent with Article  XI: 1 of the GATT 1994  
7.2.18.1   Arguments of the Parties  
7.2.18.1.1   New Zealand  
7.376.   New Zealand claims that Indonesia prohibits the importation of animals and animal 
products for particular uses, and for sale and distribution through certain outlets and t hat this 
constitutes a "restriction " within the meaning of Article XI : 1 of the GATT 1994 as it has a "limiting 
effect " on the importation of such products. In particular, New Zealand submits that such 
                                                
1219 New Zealand 's first written submission, para. 170.  
1220 United States ' first written submission, para. 286.  
1221 Indonesia 's second written submission, para. 172.  
1222 Appellate Body Report, Argentina – Import Measures , para. 5.217 (referring to the Appellate Body 
Reports, China – Raw Materials , para.  319-320).  
1223 United States ' first written submission, para. 286.  
1224 See paragraph  7.132  above.  
1225 Panel Report, India – Autos , para. 7.268.  
1226 Panel Report, India – Autos , para. 7.277.  WT/DS477/R • WT/DS478/R  
 
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  restrictions limit the competitive opportunities for i mportation of bovine meat and offal by 
prohibiting importation of these products for certain uses.1227 
7.377.   New Zealand submits that bovine meat and offal may only be imported into Indonesia for 
use by "industry, hotel, restaurant, catering, and/or other special n eeds", and may only be sold or 
distributed through these same channels or outlets. New Zealand claims that this requirement is 
reflected in Article 17 of MOT 46/2013 and in Article 32 of MOA 139/2014 as amended.1228 New 
Zealand further submits that the effect  of these measures is that bovine carcass, meat and offal 
are not permitted to be imported into Indonesia for any form of domestic use, or sold or 
distributed through consumer retail outlets, in particular, from being sold at modern markets such 
as superma rkets and hypermarkets as well as traditional retail outlets such as wet markets, small 
stalls or shops and street carts.1229 New Zealand claims that this substantially reduces the 
opportunities for imported products to reach Indonesian consumers who buy thei r household food 
products at these locations, and effectively precludes importation of bovine products for domestic 
consumption.1230 New Zealand argues that the panel in India – Quantitative Restrictions has 
previously concluded that a measure which prohibite d imports of certain products other than 
where the imported product was for the importer's "own use " constituted a restriction on imports 
of such products under Article XI : 1.1231 New Zealand contends that such a measure is analogous 
to the use, sale and dist ribution restrictions applied by Indonesia, in that both measures only 
permit importation for a narrow range of applications, thereby prohibiting importation of products 
for certain uses, or from being sold or distributed through certain channels.1232 
7.378.   Respond ing to Indonesia's argument that this measure is not a quantitative restriction 
because it "does not place an absolute limit on the amount of animals and animal products that 
can be imported for permitted end uses "1233, New Zealand submits that WTO jurisprude nce is clear 
that a measure need not impose an "absolute limit " on importation to constitute a breach of 
Article  XI:1 of the GATT 1994, but that a measure must have a "limiting effect " or impose a 
"limiting condition " on importation as evidenced by the mea sure's design, architecture and 
structure.1234  
7.2.18.1.2   United States  
7.379.   The United States claims that this Measure is a limitation or limiting condition on 
importation or ha s a limiting effect on imports1235, and is therefore a restriction inconsistent with 
Article XI : 1 of the GATT 1994.1236 Additionally, the United States claims that this requirement is 
not a duty, tax, or other charge, and, therefore, is within the scope of Article XI : 1.1237 The United 
States submits that Indonesia requires as a condition for importation tha t animals and animal 
products be imported only for certain specific uses. According to the United States, for all imported 
products the permitted uses do not include retail sale in traditional Indonesian markets where 
Indonesians purchase the vast majority  of their meat.1238 The United States argues that this 
condition limits the opportunities of imported products in the Indonesian market, thus limiting the 
quantity of imports, and may also render the importer ineligible to import products in the future if 
the condition is not met.1239 The United States argues that under MOT 46/2013, as amended, and 
MOA 139/2014, as amended, animals can only be imported for purposes of improving genetic 
                                                
1227 New Zealand 's first written submission, para. 172 (referring to Panel Report, Colombia – Ports of 
Entry,  para. 7.238 and 7.240 -7.241).  
1228 New Zealand 's first written submission, paras. 1 72-173. 
1229 New Zealand 's first written submission, para. 176; second written submission, para. 108.  
1230 New Zealand 's first written submission, para. 176 (referring to Article 32(2)  of MOA 139/2014  as 
amended , Exhibit JE -28); second written submission, para. 108. 
1231 New Zealand 's first written submission, para. 177 (referring to Panel Report, India – Quantitative 
Restrictions , para. 5.142 -5.143); second written submission, para. 108.  
1232 New Zealand 's first written submission, para. 177; second written submission , para. 108.  
1233 New Zealand 's second written submission, para. 106 (referring to Indonesia 's first written 
submission, paras. 108, 110 and 165).  
1234 New Zealand 's second written submission, para. 107 (referring to Appellate Body Reports, China – 
Raw Materials , para. 319; Argentina – Import Measures , para.  5.217; New  Zealand 's first written submission, 
paras. 123 -128; response to Panel question No.  60). 
1235 United States ' first written submission, para. 291 (referring to Appellate Body Report s, Argentina – 
Import Measures,  para. 5.217 and China – Raw Materials , para. 320).   
1236 United States ' first written submission, para. 290 . 
1237 United States ' first written submission, fn. 431.  
1238 United States ' first written submission, para. 290.  
1239 United States ' first written submission, para. 291.  WT/DS477/R • WT/DS478/R  
 
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  diversity, overcoming domestic shortfalls, or for scientific or research purpo ses.1240 The United 
States submits that animal products listed in Appendix I to MOT 46/2013 and MOA 139/2014 can 
be imported only for use in manufacturing, hotels, restaurants, or catering, or for other limited 
purposes.1241 The United States also submits that a nimal products listed in Appendix II to 
MOT 46/2013 and MOA 139/2014 are permitted to be imported fo r the same purposes as 
Appendix  I products, and also can be sold in modern markets ( i.e. supermarkets and convenience 
stores).1242  
7.380.   The United States further s ubmits that an importer that viol ates the provisions of 
MOA 139/2014, as amended, concerning the permitted uses of Appendix I and Appendix  II 
products is subject to having its RI designation, Recommendation, and Import Approval revoked, 
and becomes ineligi ble to receive Recommendations in the future.1243 The United States also 
submits that an Appendix I (beef products) importer that fails three times to submit its distribution 
report, specifying to whom and for what purpose they sold their products, has its RI  designation 
suspended1244, rendering the importer unable to import Appendix I products.1245 The United States 
maintains that these use restrictions severely limit the opportunities available to imports in the 
Indonesian market because, for animals, the permitte d purposes do not include ordinary retail sale 
or sale for slaughter, for beef carcasses and meat listed in Appendix I, the permitted purposes do 
not include any retail sale, and for Appendix II (non -beef) animal products, the list does not 
include sale in  traditional markets, either in small family -owned stores ( warung ) or in "wet 
markets ".1246 According to the United States, reports by market analysts show that Indonesian 
consumers still do at least half of their food shopping at traditional retail outlets1247, so that the 
use restrictions for Appendix II products bar imports from competing for a significant portion of the 
sales in the Indonesian retail food market, while the restrictions for Appendix I products exclude 
imports from the retail market altogether.1248 According to the United States, a 2010 survey shows 
that Indonesian consumers make 70% of their fresh meat purchases at traditional markets.1249 
7.381.    The United States argues that the panel in India – Quantitative Restrictions  found that the 
"actual user " requirement  was "a restriction on imports because it precludes imports of products 
for resale by intermediaries "1250 and that , in Canada – Provincial Liquor Boards , the GATT panel 
found that limitations on the points of sale available to imported beer were restric tions within the 
meaning of Article XI:1.1251  
7.2.18.1.3   Indonesia  
7.382.   Indonesia a rgues that this M easure does not impose any quantitative limits on imports of 
animals and animal products and therefore is not a quantitative restriction within the meaning of 
Article XI:1 .1252  
7.383.   Indonesia contends that it limits the end uses of imported animals and animal products to 
certain retail uses and in the production of other products and that imported animals and animal 
products are not permitted to be sold in traditional Indonesian mark ets because of the extremely 
                                                
1240 United States ' first written submission, para. 292 (referring to Article 3(1)  of MOT 46/2013 , as 
amended, Exhibit JE -21). 
1241 United States ' first written submission, para. 292 (referring to Article 17 of MOT 46/2013, as 
amended, Exhibit JE -21 and  Article 32(1)  of MOA 139/2014, as amended, Exhibit JE -28). 
1242 United States ' first written submission, para. 292 (referring to Article 32(2)  of MOA 139/2014, as 
amended,  Exhibit JE -28); second written submission, para. 40.  
1243United States ' first written submission, para. 293 (referring to  Article 39(d)  of MOA 139/2014, 
Exhibit JE -28)  
1244 United States ' first written submission, para. 293 (referring to  Article 26 of  MOT 46/2013, as 
amended, Exhibit JE -21). 
1245 United States ' first written submission, para. 293.  
1246 United States ' first written submission, para. 294.  
1247 United States ' first written submission, para.  295 (referring to Rohit Razdan et al., McKinsey & Co, 
The Evolving Indonesian Consumer , p. 16, Exhibit USA -47; and Arief Budiman et al., McKinsey & Co., The New 
Indonesian Consumer , p. 11, Exhibit USA -48); second written submission, para. 40.  
1248 United Sta tes' first written submission, para. 295.  
1249 United States ' second written submission, para. 40 (referring to Rahwani Y. Rangkuti & Thom 
Wright, U.S. Department of Agriculture Foreign Agriculture Service, GAIN Report No. ID1450: Retail Foods 
2014, pp. 5-6, 19 December 2014, Exhibit USA -58). 
1250 United States ' first written submission, para. 296 (referring to Panel Report, India – Quantitative 
Restrictions, para. 5.142).  
1251 United States ' first written submission, para. 296 (referring to Canada – Provincial Liqu or Boards 
(EEC) , adopted on 22 March 1988, BISD 35S/37, para. 4.24).  
1252 Indonesia 's first written submission, para. 165; second written submission, paras. 191 and 194.  WT/DS477/R • WT/DS478/R  
 
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  high risk of unsafe food handling. According to Indonesia, traditional markets in its territory do not 
have proper cold storage facilities and , in such environments, products must be extremely fresh in 
order to be safe for huma n consumption.1253 Indonesia submits that t he prohibition on sale  of non -
fresh meat ( i.e. defrosted or thawed) applies to both imported and domestic meat and that this 
prohibition was maintained by Indonesia because these types of meat are deceptively similar  to 
fresh meat. Indonesia contends that to ensure the quality of meat sold in traditional markets and 
to reduce consumer deception, Indonesia has banned entirely the display and sale of all defrosted 
or thawed meats in traditional markets due to the health  risk posed.1254 
7.2.18.2   Analysis by the Panel  
7.384.   Similar to Measure 6, the task before the Panel is to establish whether, as claimed by the 
co-complainants1255, Measure  14 imposes a limiting condition on importation  contrary to Article 
XI:1 of the GATT 1994.  In particular , whether requiring as a condition for importation that animals 
and animal products be imported only for certain specific uses imposes a limiting condition on 
importation  contrary to Article XI:1 of the GATT 1994.  
7.385.   We com mence by observing that  the co -compl ainants argue d that Measure 14 constitutes 
a restriction on importation1256, and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.1257 New Zealand argue d that the components of Indonesia's 
import licensing regime f or animals, animal products and horticultural products, which include 
Measure 14, constitute prohibitions or restrictions made effective through an "import licence " or, 
alternatively, an "other measure ".1258 The United States submit ted that Article XI:1 appli es to any 
"restriction, " including those "made effective through quotas, import or export licenses or other 
measures ".1259 
7.386.   We also observe that Indonesia has not contested the co -complainants' characterisation of 
Measure  14.1260 Rather, it has responded that its  measures are outside the scope of Ar ticle XI:1 
because they are automatic import licensing regimes.1261 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall  per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  14 in Section 2.3.3.5 
above , we concur with the co -complainants that Measure  14 is not a duty, tax, or other charge and 
it is there fore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.387.   As with the previous measures1262, we proceed to examine whether the co -complainants 
have demonstrated that Measure  14 prohibits or restricts trade, rather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure  14 has a limiting effect on 
importation . To carry out this analysis, we recall that the Panel is to examine the design, 
architecture, and revealing structure of Measure  14, within its relevant context.   
7.388.   As described in Section 2.3.3.5 above , Measure 14 consists of certain requirements that 
limit the use, sale and distribut ion of  imported  animals and animal products, including bovine meat 
and offal .1263 This measure is implemented by Indonesia through Articles 3 , 17, 25(2) and 26  of 
MOT 46/2013 , as amended, and Article s 32 and 39(d)  of MOA 139/2014 , as amended.  Pursuant to 
these above provisions , the animals  listed in Appendix  I and Appendix II of MOT 46/2013 , as 
amended, can only be imported for the purposes  of improving genetic quality and diversity; 
developing science and technology; overcoming domestic deficiencies of seeds,  breeders and/or 
feeders; and/or fulfilling research and development needs.1264 Furthermore, animal products, 
                                                
1253 Indonesia 's second written submission, para. 192.  
1254 Indonesia 's second written submissi on, para. 193.  
1255 New Zealand 's first written submission, para. 172; United States ' first written submission, 
para. 290. 
1256 New Zealand 's first written submission, para. 172; United States ' first written submission, 
para. 290. 
1257 New Zealand 's first written s ubmission, para. 208; United States ' first written submission, fn. 431.  
1258 New Zealand 's first written submission, para. 203.  
1259 United States ' first written submission, para. 142.  
1260 Indonesia 's response to Panel question No.  10. 
1261 Indonesia 's second written  submission, para. 165.  
1262 See, for instance, paragraph  7.76 above.  
1263 New Zealand 's Panel Request, pp. 4 -7; United States ' Panel Request, pp. 4 -7; New  Zealand 's first 
written submission, para. 55; United  State s' first written submission, para. 125.  
1264 Article 3. a. -d. of MOT 46/2013, as amended, Exhibit JE -21. WT/DS477/R • WT/DS478/R  
 
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  bovine c arcasses, meats, and/or offals listed in Appendix  I of MOT  46/2013, as amended, and in 
Appendix I of MOA 139/2014 , can only be imported for t he use and distribution of industry, hotels, 
restaurants, catering, and/or other special needs.1265 The non-bovine carcasses, beefs and /or offals 
listed in Appendix II of MOA 139/2014 , as amended by MOA 2/2015, can be imported only for the 
same purposes as th e bovine products specified in Appendix I and additionally for sale in modern 
markets.  
7.389.   The co -complainants appear to consider that the structure and operation of Measure  14 is 
causing a limiting effect on importation by affecting the competitive opportuni ties of imported 
products. In short, we understand the co -complainants to take issue with Measure 14 because it 
impedes certain animals and animal products from reaching retail outlets and consequently, 
reduces the opportunities for imported products to re ach the final consumer.  
7.390.   For instance, New Zealand argued  that bovine meat and offal may only be imported into 
Indonesia for use by "industry, hotel, restaurant, catering, and/or other special needs ", and may 
only be sold or distributed through these same c hannels or outlets. New Zealand further submit ted 
that the effect of this M easure is that bovine carcass, meat and offal are not permitted to be 
imported into Indonesia for any form of domestic use, or sold or distributed through consumer 
retail outlets . In particular, these products are prohibited from being sold by importers to  modern 
markets such as supermarkets and hypermarkets as well as traditional retail outlets such as wet 
markets, small stalls or shops and street carts.1266 For New Zealand,  this Measu re substantially 
reduces the opportunities for imported products to reach Indonesian consumers who buy their 
household food products at these locations, and effectively precludes importation of bovine 
products for domestic consumption.1267  
7.391.   Similarly, the Uni ted States submitted that  for all imported products , the permitted uses 
do not include retail sale in traditional Indonesian markets where Indonesians purchase the vast 
majority of their meat.1268 The United States argue d that this condition limits the opport unities of 
imported products in the Indonesian market, thus limiting the quantity of imports, and may also 
render the importer ineligible to import products in the future if the condition is not met.1269 The 
United States further submit ted that an importer th at violates the provisions of MOA 139/2014, as 
amended, concerning the permitted uses of Appendix I and Appendix II products is subject to 
having its RI designation, Recommendation, and Import Approval revoked, and becomes ineligible 
to receive Recommendat ions in the future.1270 For the United States, an Appendix I (beef 
products) importer that fails three times to submit its distribution report, specifying to whom and 
for what purpose the products were sold , has its RI designation suspended1271, rendering the 
importer unable to import Appendix I products.1272 The United States thus maintain ed that these 
use restrictions severely limit the opportunities available to imports in the Indonesian market 
because, for animals, the permitted purposes do not include ordinary retail sale or sale for 
slaughter ; for beef carcasses and meat listed in Appendix I, the permitted purposes do not include 
any retail sale, and for Appendix II (non -beef) animal products, the list does not include sale in 
traditional markets, either in sma ll family -owned stores ( warungs ) or in "wet markets ".1273 
7.392.   Indonesia confirmed that  it limits the end uses of imported animals and animal products to 
certain retail uses and the production of other products and argued that imported animals and 
animal products are not permitted to be sold in traditional Indonesian markets because of the 
extremely high risk of unsafe food handling. According to Indonesia, traditional domestic markets 
do not have proper cold storage facilities and in such environments, products mu st be extremely 
fresh in order to be safe for human consumption.1274 Indonesia contend ed that to ensure the 
quality of meat sold in traditional markets and to reduce consumer deception, Indonesia has 
                                                
1265 Article 17 of MOT 46/2013, as amended, Exhibit JE -21. 
1266 New Zealand 's first written submission, para. 176; second written submission, para. 108.  
1267 New Z ealand 's first written submission, para.  176 (referring to Article 32(2), MOA 139/2014 as 
amended , Exhibit JE -28); second written submission, pa ra. 108.  
1268 United States ' first written submission, para. 290.  
1269 United States ' first written submission, para. 291. 
1270 United States ' first written submission, para. 293 (referring to  Article 39(d)  of MOA 139/2014,  
Exhibit JE -28).  
1271 United States ' first written submission, para. 293 (referring to  Article 26 of MOT 46/2013, as 
amended , Exhibit JE -21). 
1272 United State s' first written submission, para. 293.  
1273 United States ' first written submission, para. 294.  
1274 Indonesia's second written submission, para. 192.  WT/DS477/R • WT/DS478/R  
 
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  banned entirely the display and sale of all defrosted or th awed meats in traditional markets due to 
the health risk posed.1275 
7.393.   We thus observe that, similar to Measure 6, the co -complainant’s case is built around the 
notion that Measure  14 reduces the competitive opportunities of imported products . This is 
because Me asure  14 substantially reduces the opportunities for these products  to reach Indonesian 
consumers who buy their household food products at consumer retail outlets;  effectively precludes 
importation of bovine products for domestic consumption1276 and limits th e opportunities of 
imported products in the Indonesian market . The M easure t hus limit s the quantity of imports and 
may also render the importer ineligible to import products in the future if the condition is not 
met.1277 
7.394.   As described in paragraph 7.388 above , Measure 14 imposes three types of restrictions on 
the use, sale and distribution depending on the type of product:  
a. Pursuant to Article 3(1) of MOT 46/2013, as amended,  Appendix I and II1278 animals can 
only be imported for th e purposes of improving genetic quality and diversity; developing 
science and technology; overcoming domestic deficiencies of seeds, breeders and/or 
feeders; and/or fulfilling research and development needs;  
b. Pursuant to Article 17  of MOT 46/2013, as am ended, and Article 32(1) of 
MOA 139/2014, as amended, the bovine meats and offal listed in both Appendix I of 
MOT 46/2013, as amended; and Appendix I of MOA 139/2014, as amended, can only be 
imported for the use and distribution of industry, hotels, restauran ts, catering, and/or 
other "special needs "1279; and  
c. Pursuant to Article 32(2) of MOA 139/2014, as amended, Appendix II1280 non-bovine 
carcasses, meat, and/or meat as well as processed meat products may only be imported 
for the same end uses as specified in subp aragraph  (b) above and, additionally, for sale 
in modern markets.  
7.395.   We observe that, on its face, by restricting the potential uses of the various types of 
imported animals and animal products, the above regulations result in a prohibition for those 
imported  products destined for any other uses than those prescribed therein. Accordingly:  
a. imported animals and animal products listed in Appendix I and II of MOT 46/2013, as 
amended and imported bovine carcass, meat and offal listed in both Appendix I of 
MOT 46/20 13, as amended, and Appendix I of MOA 139/2014, as amended, cannot  be 
sold in both modern and traditional markets and, in  general, directly to consumers,  and 
b. imported non -bovine carcass, meat, and/or offal listed in Appendix II of MOA 139/2014, 
as amended,  although allowed to be sold in modern markets, cannot be sold in 
traditional markets and, in general, directly to consumers.  
7.396.   Consequently, animals and animal products falling under the scope of the mentioned 
regulations cannot reach certain retail outlets , which as shown by the co -complainants, are where 
Indonesian  consumers do a substantive proportion of their purchases1281, sometimes even 
                                                
1275 Indonesia's second written submission, para.  193. 
1276 New Zealand 's first written submission, para. 176 (refe rring to Article 32(2)  of MOA 139/2014 , as 
amended , Exhibit JE -28); second written submission, para. 108.  
1277 United States ' first written submission, para. 291.  
1278 Of MOT 46/2013, as amended.  
1279 Article 32(3) of MOA 139/2014, as amended, defines "special need s" as including gifts for public 
worship, charity, social services, mitigation of natural disasters; needs of foreign country or international 
representatives; scientific research and development needs; or sampling for trade fairs and exhibitions.  
1280 Only o f MOA 139/2014, as amended.  
1281 See also  "Indonesia 's Modern Retail Sector: Interaction with Changing Food Consumption and Trade 
Patterns " United States Department of Agriculture, June 2012 (USDA Modern Re tail Study), p. 10 (Exhibit 
NZL 33). Rohit Razdan et al., "The Evolving Indonesian Consumer " McKinsey & Company, Asia Consumer 
Insights Center, November 2013, p.16 (The Evolving Indonesian Consumer) (Exhibits NZL -34 and USA -47) 
states "traditional retail channels, including mom -and-pop stores (warungs) and w et markets, still dominate 
the retail landscape in Indonesia "; Arief Budiman et al, "The New Indonesian Consumer " McKinsey & Company, 
December 2012, p. 11 (Exhibits NZL -35 and USA -48) states that, as at 2011, "retail sales through traditional 
channels, inc luding mom -and-pop and wet markets, account for an estimated 70 percent of the market " and 
that, "[f]or general food and beverage...the traditional channel remains important, with only about half of WT/DS477/R • WT/DS478/R  
 
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  amounting to  at least half of their food shopping .1282 Although it may be argued that the 
restrictions in the case of non -bovine carcass, meat, and/or offal listed in Appendix II of 
MOA 139/2014, as amended, are less comprehensive, as these products can be destined for sale 
in modern markets, they are still not able to reach traditional markets.  To us, through its design, 
architecture and revealing structure, Measure  14 restricts the competitive opportunities for 
imported products because it impedes sale in modern stores or traditional markets or directly to 
the consumer.  
7.397.   We also note that, as the co -complainants point out, in India – Quantitative Restrictions , 
the panel examined a similar measure; namely India's "actual user requirement " which provided 
that some products could only be imported by the "Actual User ", and thus did not allow the 
importation of products for resale b y intermediaries. The panel, finding support in prior GATT  1947 
reports1283, concluded that the Indian measure was "a restriction on imports because it precludes 
imports of products for resale by intermediaries, i.e. distribution to consumers who are unable t o 
import directly for their own immediate use is restricted ".1284 We concur with that panel's analysis 
and make it our own for the purpose of Measure  14.  
7.2.18.3   Conclu sion 
7.398.   For the reasons stated above, we find that Measure  14 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.19   Whether Measure  15 (Domestic purchase r equirement for beef ) is inconsistent 
with Article  XI:1 of the G ATT 1994  
7.2.19.1   Arguments of the Parties  
7.2.19.1.1   New Zealand  
7.399.   New Zealand claims that Article 5 of MOA 139/2014 requires that all persons that wish to 
import beef must, as a condition of importation, purchase a specified amount of Indonesian 
beef1285 and that this domestic p urchase requirement constitutes a restriction on the importation 
of beef in breach of Article XI:1 of the GATT 1994.1286 New Zealand argues that the quantity of 
Indonesian beef which must be purchased in order to obtain an MOA Recommendation is 
determined on a quarterly basis1287 and that for the quarter commencing July 2015, the quantity 
                                                                                                                                                  
consumers preferring modern retail ". See also : Suryadarma , D "Competition between traditional food traders 
and supermarkets in Indonesia " (paper presented to the Crawford Fund for international Agricultural Research 
Conference on The Supermarket Revolution in Food: Good, bad or ugly for the world 's farmers, cons umers and 
retailers) Canberra, August 2011, p. 51 (Exhibit NZL -36). This paper estimates that, as at 2006, traditional 
markets made up 50% of the total Indonesian food market.  
1282 United States ' first written submission, para. 295 (referring to Rohit Razdan et al., McKinsey & Co, 
The Evolving Indonesian Consumer , p. 16, Exhibit USA -47; and Arief Budiman et al., McKinsey & Co., The New 
Indonesian Consumer , p. 11, Exhibit USA -48); second written submission, par a. 40. We also note that a 
2010 survey shows that I ndonesian consumers make 70% of their fresh meat purchases at traditional markets. 
Rahwani Y. Rangkuti & Thom Wright, U.S. Department of Agriculture Foreign Agriculture Service, GAIN Report 
No. ID1450: Retail Foods 2014 , pp. 5-6, 19 December  2014, Exhibit USA-58. 
1283 The panel observed that a minimum import price system has been considered to be a restriction 
within the meaning of Article XI:1. GATT Panel Report, EEC – Programme  of Minimum Import Prices, Licences 
and Surety Deposits for Certain Processed Frui ts and Vegetables , adopted on 18 October 1978, BISD 25S/68, 
para. 4.9. Similarly, a panel found that a measure limiting exports below a certain price was within the scope 
of Article XI:1. GATT Panel Report , Japan – Semi-conductors , adopted 4  May 1988, BISD  35S/116 , para.  105. 
In a case involving limitations on the points of sale available to imported beer, a panel found that such 
limitations were restrictions within the meaning of Article XI:1. GATT Panel Report, Canada – Import, 
Distribution and Sale of Al coholic Drinks by Canadian Provincial Marketing Agencies , adopted on 22 March 
1988, BISD 35S/37, para. 4.24. This case involved state trading operations and the panel emphasized that the 
Note Ad Articles XI, XII, XIII, XIV and XVIII referred to "restrictio ns" generally and not to "import restrictions ". 
It accordingly considered restrictions on distribution as within the meaning of "other measures " under 
Article  XI:1, even though such measures might be examined also under Article III:4. Here the restrictions  at 
issue, although related to distribution, are on importation.  
1284 Panel Report, India – Quantitative Restrictions , paras. 5.142 -5.143.  
1285 New Zealand's first written submission, para. 179 (referring to Article 5 of  MOA 139/2014 , 
Exhibit JE 26). 
1286 New Zeala nd's first written submission, para. 189.  
1287 New Zealand's first written submission, para. 180 (referring to Absorpti on Presentation, Slides 4 
and 5, Exhibit NZL -38). WT/DS477/R • WT/DS478/R  
 
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  was set at 3% of total beef purchases (for beef used for all permitted purposes other than 
manufacturing) and 1.5% of total beef purchases (for beef imported for use in manufact uring 
processes).1288 New Zealand further argues that the domestic purchase requirement is enforced by 
requiring importers to demonstrate, in their application for an MOA Recommendation, that they 
have "absorbed " the required quantity of Indonesian beef1289 and that an application for an MOA 
Recommendation will be rejected if an importer requests to import a quantity of beef that would 
result in the proportion of imported beef relative to Indonesian beef purchased by that importer 
higher tha n the quantity that ha s been absorbed. New Zealand also argues that to fulfil the 
domestic purchase requirement, Indonesian beef must be purchased by an importer in the three -
month period prior to the month in which an application for an MOA Recommendation is made.1290 
7.400.   New Zealand  also submits that the limiting effect of the domestic purchase requirement is 
aggravated by the limited supply of beef derived from cattle that have been raised and 
slaughtered in Indonesia since , in many circumstances, importers are unable to obtain a su fficient 
quantity of this cattle beef to enable them to import their desired quantity of imports while still 
satisfying the domestic purchase requirement.1291 New Zealand thus argues that through its 
architecture, the domestic purchase requirement is designed  to restrict the volume of beef imports 
into Indonesia by substituting imports with domestically produced product, and thus cause a 
corresponding increase in the volume of beef that is domestically produced.1292 New Zealand 
contends that the panel in Argentin a – Import Measures  confirmed that a suite of trade related 
requirements, which included a local content requirement, breached Article XI:11293, and that 
Indonesia's domestic purchase requirement is structurally akin to the local content requirement 
considere d by that panel.1294  
7.401.   Responding to Indonesia's statements that Measure  15 cannot constitute a quantitative 
restriction because it was "suggested by the importers' association of Indonesia " and that "there is 
plenty of domestic supply to meet the domestic purchase requirement "1295, New Zealand submits 
that it does not agree with Indonesia's position, and even if this were true, this requirement would 
still constitute a breach of Article XI:1 of the GATT 1994.1296 Regarding the first statement, New 
Zealand sustains t hat Indonesia has provided no evidence to support its claim that the domestic 
purchase requirement was "suggested by the importers' association  of Indonesia " and that the 
origin of the domestic purchase requirement is irrelevant, as New  Zealand is challeng ing the 
measure as it is set out in MOA 139/2014 .1297 Regarding the second statement, New Zealand 
argues that Indonesia's response regarding availability of sufficient domestic beef for importers to 
satisfy the domestic purchase requirement is  based on unrefe renced data  and even if the numbers 
provided by Indonesia were correct, when divided by Indonesia's population of over 255 million, 
this would amount to just over 1 gram of beef per Indonesian consumer per day.1298 For New 
Zealand, irrespective of whether the re is sufficient domestic beef available within Indonesia to 
enable importers to satisfy the domestic purchase requirement, the measure still constitutes a 
quantitative restriction because it imposes a limiting condition on importation by requiring 
importe rs to substitute imported product with domestically produced product and imposes 
additional costs for importers.1299  
7.402.   New Zealand contends that  this requirement affects the competitive relationship between 
imported and domestic beef in the Indonesian market i n three ways: (i) it requires importers to 
prioritise the purchase of domestic beef over imported beef, meaning that an importer is required 
to substitute imported beef with domestically produced beef and that , in its absence , the 
                                                
1288 New Zealand's first written submission, para. 180 (referring to Absorpti on Presentation,  Slides 4 and 
5, Exhibit NZL -38). 
1289 New Zealand's first written submission, para. 181 (referring to Article 24(1)(l)  of MOA 139/2014 , 
Exhibit JE -26).  
1290 New Zealand's first written submission, para. 183.  
1291 New Zealand's first written submission, para. 184.  
1292 New Zealand's first written submission, para. 186.  
1293 New Zealand's first written submission, para. 187 (referring to Panel Report, Argentina – Import 
Measures , para. 6.258 ). 
1294 New Zealand's first written submission, para. 189.  
1295 New Zealand's second wri tten submission, para. 134 (referring to Indonesia' s first written 
submission, paras. 111 -112). 
1296 New Zealand's second written submission, para. 135.  
1297 New Zealand's second written submission, par a. 136 (referring to Article 5 of MOA 139/2014 , 
Exhibit  JE-26). 
1298 New Zealand's second written submission, para. 138 (referring to Indonesia's first opening 
statement, para. 4).  
1299 New Zealand's second written submission, para. 139.  WT/DS477/R • WT/DS478/R  
 
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  purchaser's decision on w hether to import beef or obtain beef from domestic sources, would be 
based entirely on commercial factors, (ii) the relative scarcity of domestic beef and the absence of 
sophisticated supply chains for domestic beef within Indonesia means that it can be di fficult for 
importers to obtain sufficient beef to satisfy the Domestic Purchase Requirement1300, meaning that 
an importer's ability to import beef is limited by whether it is able to obtain a suffi cient quantity of 
domestic beef  and (iii) the high cost of In donesian beef means that the cost of complying with this 
requirement imposes additional costs on importers  which discourages importation. For New 
Zealand, these costs are entirely unrelated to normal importing activity, and would not exist in the 
absence o f this measure.1301   
7.403.   In response to Indonesia's argument that Measure  15 "was only included in the relevant 
regulations in March 2015 " and "has not been enforced "1302, New  Zealand notes that this 
requirement is contained in MOA 139/2014 . This regulation  came in to force in December 2014  and 
provided that the domestic purchase requirement would come into force on 1 March 2015.1303 New 
Zealand contends that, whether the Domestic Purchase Requirement is in fact  currently being 
enforced is irrelevant, as measures that a re not enforced are not immune from challenge since 
WTO jurisprudence makes  clear that mandatory measures that are in force but not being enforced 
may still be challenged as inconsistent as such  with a Member's WTO obligations.1304 
7.404.   Commenting on Indonesia's r esponse to a question from the Panel on whether this 
requirement was in force at the time of the establishment of this Panel, and on how much was 
required to be purchased at the time of the establishment of this Panel, New Zealand notes that 
Indonesia's re gulations are clear that this requirement came into legal effect from "March 1, 
2015"1305 and therefore  the measure was legally in effect prior to the establishment of the 
Panel.1306 New Zealand also notes that although the "[t]he 3% domestic beef purchase 
requirement entered into force beginning June 2015 for the import period July -September 
2015"1307, importers were required to purchase domestic beef during the period from March - May 
2015 in order for these purchases to be counted towards their fulfilment of the domestic purchase 
requirement in their June applications for MOA Recommendations.1308   
7.405.   Finally, to Indonesia's argument that this requirement has never been used to prevent the 
issuance of an import licence, New  Zealand responds  that it is not relevant that the Domestic 
Purchase Requirement has never been used to prevent the issuance of an import licence. Even if 
Indonesia's  contention were accurate, it only demonstrates that importers are aware that they 
must comply with the domestic purchase requirement in order to obtain a Recommendation , 
thereby adjusting the requested import quantities, and their purchases of domestic beef, in a 
manner which ensures compl iance with this requirement.1309 
7.2.19.1.2   United States  
7.406.   The United States claims that under MOA 139/2014, as amend ed, Indonesia requires 
importers of beef to purchase beef from local slaughterhouses as a condition of being eligible to 
receive permission to import and that this requirement is a restriction within the meaning of 
Article  XI:1 inconsistent with this provi sion.1310 Additionally, the United States claims that this 
requirement is not a duty, tax, or other charge, and, therefore, is within the scope of 
                                                
1300 New Zealand 's response to Panel question No.  112 (referring to "Ill -Advised Beef Se lf-Sufficiency 
Policies Have Dep leted Indonesia Cattle Population by 30 Percent, Business Group Says" Jakarta Globe, 
Exhibit  NZL-14). 
1301 New Zealand's response to Panel question No. 112.  
1302 New Zealand's second written submission, para. 140 (referring to Ind onesia's first written 
submission, para. 111).  
1303 New Zealand's second written submission, para. 141 (referring to Article 41(1), MOA 139/2014 
(Exhibit  JE-26). 
1304 New Zealand 's second written submission, para. 14 2 (referring to Appellate Body Report,  US –
 Corrosion -Resistant Steel Sunset Review , para. 82).   
1305 New Zealand 's comments on Indonesia 's response to Panel question No.  107 (referring to 
Article  41(2) of  MOA 139/2014 , Exhibit JE -26). 
1306 New Zealand 's comments on Indonesia 's response to Panel question No . 107. 
1307 New Zealand 's comments on Indonesia 's response to Panel question No.  107 (referring to 
Indonesia 's responses to Panel question No. 106, para. 4 6). 
1308 New Zealand 's comments on Indonesia 's response to Panel question No.  107 (referring to Ministry of  
Agriculture Absorption Presentation, Exhibit NZL -38, Slide 5 stating "March - May: Period of local absorption 
which the absorbed volume later be required for proposal in June "). 
1309 New Zealand 's response to Panel question No.  112. 
1310 United States ' first wr itten submission, para. 298.  WT/DS477/R • WT/DS478/R  
 
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  Article  XI:1.1311 The United States argues that importers are allowed to import beef only on the 
condition that the y "absorb " (i.e. purchase) local beef in an amount equivalent to 3% of the 
quantity they import.1312  
7.407.   The United States submits that only purchases from certain designated abattoirs and only 
purchases of male cattle count towards this requirement1313, and that i n a Recommendation 
application, an importer must submit proof, verified by the provincial agency or the municipality 
from which the Indonesian domestic beef originates, that it has met this requirement.1314 A 
Recommendation application without proof that the domestic purchase requirement has been met 
will be rejected,1315 and an importer that does not comply with the requirement is subject to 
sanction by having its RI designation, Recommendation, and Import Approval revoked and by 
becoming ineligible for a future  Recommendation.1316 For the United States, this requirement 
operates as a limitation or limiting condition on imports, or has a limiting effect on imports, in 
three ways. First, the domestic purchase requirement is designed to substitute imports with 
domesti c products.1317 Second, the domestic purchase requirement is a limiting condition on 
imports because it ties the permissible quantity of beef imports to the supply of local beef that is 
available for purchase towards the requirement.1318 And third, the domestic purchase requirement 
adds unnecessarily to the costs of importation by requiring importers to purchase local beef 
without any business purpose. For the United States, these costs can be significant because local 
beef is in short supply, and only male cattl e from certain abattoirs qualify towards the 
requirement.1319  
7.408.   The United States contends that previous panels have found that measures imposing limits 
of this kind are restrictions under Article XI:1. The United States refers to the panel in Argentina –
Impor t Measures  and argues  that the panel considered a similar measure, which included a 
requirement to incorporate a minimum level of local content into goods produced in Argentina and 
found that it had a direct limiting effect on imports.1320 The United States a lso argues that the 
panel in India – Autos  made a similar finding concerning a trade balancing requirement, under 
which companies were required to ensure that their exports were of at least equivalent value to 
their imports. According to the United States,  the panel found that although the requirement did 
not set an explicit limit on the value of imports it was nevertheless a restriction.1321 
7.409.   Responding to Indonesia's argument that the domestic purchase requirement for beef 
products is not a "quantitative rest riction " because there is "plenty of domestic supply " to meet the 
requirement "1322, the United States sustains that Indonesia has provided no evidence to 
substantiate this assertion, and to the contrary, all of the relevant evidence on the record confirms 
that beef is scarce in Indonesia and prices are high. For the United States, in any event, even if 
Indonesian producers could provide abundant domestic beef for purchase by importers, this would 
not eliminate the restrictive effect of the domestic purchase re quirement, which exists on the face 
of the Indonesian regulations irrespective of actual production volumes or trade flows.1323 
7.410.   Responding to Indonesia's statement that this requirement was not in force at the time of 
the Panel establishment on May 20, 2015, the United States contends that Ar ticle 5(1) of 
                                                
1311 United States ' first written submission, fn. 443.  
1312 United States ' first written submission, para. 300  
1313 United States ' first written submission, para. 300 (referring to Wright, GAIN Report ID1527: Beef 
and Horticultural Imp ort License Update , p. 2, Exhibit USA -40). 
1314 United States ' first written submission, para. 300 (referring to Article 24(1)(l) of  MOA 139/2014, as 
amended, Exhibit JE -28). 
1315 United States ' first written submission, para. 300 (referring to Article 26  of MOA 139/2014, as 
amended, Exhibit JE -28).  
1316 United States ' first written submission, para. 300 (referring to Article 39(b) -(c) of MOA 139/2014, as 
amended , Exhibit JE -28). 
1317 United States ' first written submission, para. 301; response to Panel question No.  112. 
1318 United States ' first written submission, para. 302; second written submission, para. 43; response to 
Panel question No.  112. 
1319 United States ' first written submission, para. 3 03; second written submission, para. 44; response to 
Panel question No.  112. 
1320 United States ' first written submission, para. 305 (referring to Panel Report, Argentina – Import 
Measures , para. 6.261)  
1321 United States ' first written submission, para. 307 (referring to Panel Report, India – Autos , 
para. 7.268).  
1322 United States ' second written submission, para. 45 (referring to Indonesia 's first written submission, 
para. 112).  
1323 United States ' second written submission, para. 45.  WT/DS477/R • WT/DS478/R  
 
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  MOA 139/2014, as amended, requires importers that import beef ( "large ruminant meat ") to 
"absorb " (i.e. purchase) a certain amount of beef from local slaughterhouses in order to import 
beef into Indonesia and  that Article 41(2) stipulates that "the provision on the requirement of local 
beef absorption, as described in Article 5, shall go into effect on March 1, 2015 ".1324 Accordingly, 
the United States contends that the plain text of MOA 139/2014 is clear that th e domestic 
purchase requirement went into force more than two months before the establishment of the 
Panel.1325 The United States also argues that although Indonesia may not have determined the 
amount of domestic beef that importers would be required to purch ase until the July -September 
2015 import period, this does not suggest that Article 41(2) was not in force at the time of the 
Panel’s establishment.1326   
7.2.19.1.3   Indonesia  
7.411.   Indonesia claims that the domestic purchase requirement was adopted following a 
recommendatio n from the importers' association and is therefore not a measure that constitutes a 
restriction within the meaning of Article XI:1 of the GATT 1994. Indonesia also claims that its 
domestic purchase requirement does not violate Article XI:1 of the GATT 1994  because it does not 
restrict or limit any amount of beefs that can be imported into Indonesia.1327 
7.412.   Indonesia explains that the "domestic purchase " requirement dates back to 
MOA 139/2014, but that since the promulgation of this regulation on 24 December 2014,  the 
Ministry of Agriculture understands that the implementation of this domestic purchase requirement 
is still uncertain.1328 Indonesia contends that from January 2013 – March 2015 the domestic 
purchase requirement for beef pursuant to Article 5(1) of MOA 13 9/2014 has not been enforced 
and that no MOA recommendation application during that time has been rejected because the 
applicant has not met the domestic purchase requirement even throughout 2015.1329 Indonesia 
also argues that the threshold of the 3% domesti c purchase requirement was in fact suggested by 
the importers association and that therefore, both de jure  and de facto , the "domestic purchase " 
requirement cannot be found to limit or restrict imports of beefs into Indonesia territory.1330 
7.413.   Indonesia further submits that it is well -documented that there is plenty of domestic 
supply to meet the domestic purchase requirement and that currently there are 31 certified 
slaughterhouses in Indonesia which are able to produce approximately 263,000kg of domestic beef 
daily.1331 In the alternative, Indonesia claims that this measure is necessary to the protection of 
human, plant, and animal life or health under Article XX(b)  of the GATT 1994  because it is an 
integral part of Indonesia's food safety and security plan1332, and a lso justified under Article XX(a) 
of the GATT  1994.1333 
7.414.   Responding to a question from the Panel whether this requirement was in force at the time 
of the establishment of this Panel, and regarding how much was required to be purchased under 
this requirement at  the time of the establishment of this Panel, Indonesia contends that although 
MOA 139/2014 entered into force on 24 December 2014, the 3% domestic beef purchase 
requirement entered into force beginning June 2015 for the import period July -September 2015 
based on the outcome of a meeting between GOI officials and various meat associations on 
27 February 2015. Indonesia also clarified that since the enactment of MOA 58/2015, which came 
into force on 7 December 2015 replacing MOA regulation 139/2014, an impor ter is obliged to 
source 3% of its beef locally from a slaughterhouse that has an API -U veterinary number, and 
1.5% of its beef for API -P.1334 
                                                
1324 United States ' comments on Indonesia 's responses to Panel No. 107 (referring to Article  41(2)  of 
MOA 1 39/2014, as amended, Exhibit JE-28). 
1325 United States ' comments on Indonesia 's responses to Panel No. 107.  
1326 United States ' comments on Indonesia 's responses to Panel No. 107.  
1327 Indonesia 's second written submission, para. 180.  
1328 Indonesia 's second written submission, para. 181.  
1329 Indonesia 's second written submission, para. 182.  
1330 Indonesia 's second written submission, para. 183. Indonesia 's response to Panel question No.  107. 
1331 Indonesia 's second written submission, para. 185.  
1332 Indonesia 's first written s ubmission, para. 169.  
1333 Indonesia 's second written submission, para. 187.  
1334 Indonesia 's response to Panel question No.  107. WT/DS477/R • WT/DS478/R  
 
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  7.2.19.2   Analysis by the Panel  
7.415.   The task before the Panel is to establish whether, as claimed by the co -complainants1335, 
Measure  15 which  requires importers to purchase local beef as a condition to be eligible to import 
products  constitutes a restriction having a limiting effect on importation  and is thus  inconsistent 
with Artic le XI:1 of the GATT 1994.  
7.416.   We com mence by observing tha t the co -complainants argue d that Measure 15 constitutes 
a restriction on importation1336, and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.1337 New Zealand argue d that the components of Indonesia's 
import lice nsing regime for animals, animal products and horticultural products, which include 
Measure 15, constitute prohibitions or restrictions made effective through an "import licence " or, 
alternatively, an "other measure ".1338 The United States submit ted that Article XI:1 applies to any 
"restriction, " including those "made effective through quotas, import or export licenses or other 
measures ".1339 
7.417.   We also observe that Indonesia has not contested the co -complainants' characterisation of 
Measure  15.1340 Rather, it has resp onded that its measures are outside the scope of Article XI:1 
because they are automatic import licensing regimes.1341 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedur es do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  15 in Section 2.3.3.6 
above , we concur with the co -complainants that Measure  15 is not a duty, tax, or other charge a nd 
it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.418.   As with the previous measures1342, we proceed to examine whether the co -complainants 
have demonstrated that Measure  15 prohibits or restricts trade, rather than examin ing the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure 15 has a limiting effect on 
importation . To carry out this analysis, we recall that th e Panel is to examine the design, 
architecture, and revealing structure of Measure  15, within its relevant context.   
7.419.   As described in Section 2.3.3.6 above , Measure  15 consists of the require ment imposed 
upon importers of lar ge ruminant meats to absorb local beef .1343 Indonesia implements this 
Measure pursuant to  Article s 5(1) 24(1) , 26(1) and 39(b) –(c) of MOA 139/2014 , as amended . 
Pursuant to these provisions,  in applying for a Recommendation, importers must submit  proof of 
local beef purchases duly  verified by the provincial agency or municipality of origin.  Accordingly, 
business operators, state -owned enterprises, or regional government -owned enterprises that 
import large ruminant meats must absorb local beef when applying for a Recommendation.  
7.420.   We note that  the co -complainants emphasi zed the limiting effects on importation that 
derive from the architecture of the measure  and its impact on the competitive opportunities of 
imported products . For instance, New Zealand argue d that through its architecture, the domestic 
purchase requirement is designed to restrict the volume of beef imports by substituting imports 
with domestically produced product, thus caus ing a corresponding increase in the volume of beef 
that is domestically prod uced.1344 New Zealand also contend ed that competitive opportunities are 
affected  in three ways: (i) importers are required to prioritise the purchase of domestic be ef over 
imported beef, meaning that an importer is required to substitute imported beef with do mestically 
produced beef and that , absent  the requirement,  importers' choices and purchasing  decision s 
would be based entirely on commercial factors ; (ii) the relative scarcity of domestic beef and the 
absence of sophisticated domestic supply chains mean t hat it can be difficult for importers to 
                                                
1335 New Zealand 's first written submission, para. 190; United States ' first written submission, 
para. 298. 
1336 New Zealand 's first writt en submission, para. 189; United States ' first written submission, 
para. 298. 
1337 New Zealand 's first written submission, para. 2 08; United States ' first written submission, fn. 443.  
1338 New Zealand 's first written submission, para. 203.  
1339 United States ' first written submission, para. 142.  
1340 Indonesia 's response to Panel question No.  10. 
1341 Indonesia 's second written submission, para. 165.  
1342 See for instance, paragraph  7.76 above.  
1343 New Zealand 's Panel Request, pp . 4-7; United States ' Panel Request, pp. 4 -7; New  Zealand 's first 
written submission, para. 59; United  States ' first written submission, paras. 129 -130. 
1344 New Zealand's first written submission, para. 186.  WT/DS477/R • WT/DS478/R  
 
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  obtain sufficient beef to satisfy the domestic purchase requirement1345; an importer's ability to 
import beef is  thus limited by whether it is able to purchase  a sufficient quantity of domestic beef, 
and (iii) the high  cost of Indonesian beef signifies  that the cost of complying with this requirement 
impose s additional costs on importers,  which discourages importation. For New Zealand, these 
costs are entirely unrelated to normal importing activity, and would not exist but for  this 
Measure.1346 
7.421.   For the United States, Measure  15 operates as a limitation or limiting condition on imports, 
or has a limiti ng effect on imports, in three ways: (i) it is designed to substitute imports with 
domestic products1347; (ii) it is a limiting condition on imports because it ties the permissible 
quantity of beef imports to the supply of local beef that is available for purchase towards the 
requirement1348; and (iii) it adds unnecessarily to the costs of importation by requiring importers 
to purchas e local beef without any business purpose. The United States explained that these costs 
can be significant because local beef is in short supply, and only male cattle from certain abattoirs 
qualify towards the requirement.1349 
7.422.   Indonesia responded that,  since the promulgation of regulation  MOA 139/2014  on 
24 December 2014, the Ministry of Agriculture understands that the implementation of the 
domestic purchase requirement is still uncertain.1350 Indonesia thus explained that from January 
2013–March 2015 , the domes tic purchase requirement for beef established pursuant to 
Article  5(1) of MOA 139/2014 ha d not been enforced and that no MOA Recommendation 
application during that time ha d been rejected because the applicant ha d not met the domestic 
purchase  requirement , even throughout 2015.1351 Indonesia also argue d that, since  the threshold 
of 3% domestic purchase requirement was in fact suggested by the importers ' association , 
therefore, both de jure  and de facto , it cannot be found to limit or restrict beef imports into 
Indonesia.1352 Indonesia further submitted  that it is well -documented that there is plenty of 
domestic supply to meet the domestic purchase requirement and that currently there are 
31 certified slaughterhouses in Indonesia which are able to produce approximat ely 263,000  kg of 
domestic beef daily.1353 
7.423.   In light of Indonesia's arguments, the Panel sought to clarify whether this Measure was in 
force at the time of t he establishment of this Panel.1354 Indonesia responded that Measure  15 was 
not in force at the time of th e establishment of the Panel because,  although MOA  139/2014 
entered into force on 24 December 2014, the 3% domestic beef purchase requirement entered 
into force in early June 2015 for the import period July -September 2015 based on the outcome of 
a meeting between government  officials and various meat associations on 27 February 2015.1355  
7.424.   As we stated in paragraph 7.419 above , the Measure being challenged by the co -
complainants is implemented through MOA  139/2014, as amended. Article 41(2)  of this regulation  
stipulates that "the provision on the requirement of local beef absorption, as described in Article 5, 
shall go into effect on March 1, 2015 ".1356 We thus agree with the co-complainants that the plain 
text of MOA 139/2014 , as am ended,  is clear in that the domestic purchase requirement went into 
force more than two months before the establishment of the Panel.1357 We therefore dismiss 
Indonesia's argument that Measure 15 was not in force at the time of the establishment of the 
Panel.  
7.425.   The Panel also sought to clarify how much was required to be purchased under this 
requirement at the time of the establishment of this Pane l.1358 Indonesia responded  that since the 
                                                
1345 New Zealand 's response to Panel question No.  112 (referring to  "Ill-Advised Beef Self -Sufficiency 
Policies Have Depleted Indonesia Cattle Population by 30 Percent, Business Group Says " Jakarta Globe, 
Exhibit  NZL-14). 
1346 New Zealand 's response to Panel question No.  112. 
1347 United States ' first written subm ission, para. 301.  
1348 United States ' first written submission, para. 302; second written submission, para. 43.  
1349 United States ' first written submission, para. 3 03; second written submission, para. 44.  
1350 Indonesia's second written submission, para. 181.  
1351 Indonesia's second written submission, para. 182.  
1352 Indonesia's second written submission, para. 183. Indonesia's response to Panel question No. 107.  
1353 Indonesia 's second written submission, para. 185.  
1354 Panel questions No.  52 and 107.  
1355 Indonesia 's respons e to Panel question No.  107. 
1356 Article 41(2) of MOA 139/2014, as amended, Exhibit JE -28. 
1357 New Zealand 's comments on Indonesia 's responses to Panel question No.  107; United States ' 
comments on Indonesia 's responses to Panel question No.  107. 
1358 Panel questi on No. 107.  WT/DS477/R • WT/DS478/R  
 
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  enactment of MOA 58/2015, which came into force on 7 December 2015 replacing MOA 139/2014,  
as amended,  importer s are obliged to source 3% of beef locally from a slaughterhouse that has an 
API-U veterinary number, and 1.5% of beef for API -P.1359 
7.426.   Continuing with our analysis, we observe that Measure  15 compels importers to purchase 
dome stic beef as a condition to receive an MOA Recommendation , and hence, as a condition to 
import beef into Indonesia. We note that, as a consequence of this requirement, importers would  
generally  be faced  with two options: they can either sell the local beef  purchased in the ordinary 
course  of their import business  or they can find other alternatives to use it , not necessarily 
connected with their business.  If they choose the first option, this will mean that they would not 
need to import such quantity to cov er demand, and thus they would be effectively substituting 
imported products with domestic products. To us, such import substitution has a direct limiting 
effect on importation . If importers  decide not to sell  local beef, they will  be forced to  find 
altern ative uses  for it, which in turn  will generate  additional costs and affect their business plans.  
These additional costs are likely to discourage importation, thus creating a limiting effect on 
importation . We therefore agree with the co -complainants that t he import substitution effect 
inherent to Measure  15 has a limiting effect contrary to Article XI:1 of the GATT 1994.1360 
7.427.   We also observe that Measure 15 is akin to a local content requirement analysed in 
Argentina – Import Measures , which included a requirem ent to incorporate a minimum level of 
local content into goods produced in Argentina. The Panel found that the "required increase of local 
content, either by purchasing from domestic producers or by developing local manufacture, [had] 
a direct limiting eff ect on importation , because the measure is designed to force the substitution of 
imports "1361 and also noted that these type of measures may result in costs unrelated to the 
business activity of the particular operator.  Likewise, Measure 15 also forces the su bstitution of 
imports.  
7.2.19.3   Conclu sion 
7.428.   For the reasons stated above, we find that Measure  15 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limitin g effect on importation .  
7.2.20   Whether Measure  16 (Beef reference price ) is inconsistent with Article  XI:1 of 
the GATT  1994  
7.2.20.1   Arguments of the Parties  
7.2.20.1.1   New Zealand  
7.429.   New Zealand claims that this measure has the effect of limiting imports by prohibiting the 
importati on of bovine animals and animal products when the domestic market price of these 
products falls below a stipulated reference price, thereby constituting a prohibition or restriction on 
imports in breach of Article XI:1. New Zealand claims that , through the  beef reference price, 
Indonesia prohibits importation of bovine animals and animal products when the Indonesian 
market price of beef secondary cuts falls below a specified "reference price " (76,000 Rp per 
kilogram).1362 For New Zealand, the beef reference pr ice is functionally similar to a traditional 
"minimum import price ", as both of these measures have the effect of establishing a minimum 
price below which imported beef cannot enter the market. New Zealand submits that this is 
consistent with the use of th e term "minimum import price " in Chile – Price Band System , which 
was said by the Appellate Body to "refer generally to the lowest price at which imports of a certain 
product may enter a Member's domestic market ".1363 For New Zealand, minimum import and 
expor t prices have been determined to be inconsistent with Article XI:1 of the GATT by a number 
                                                
1359 Indonesia's response to Panel question No. 107. We note that MOA 58/2015 is not within our terms 
of reference because it came into force after the establishment of the Panel.  
1360 New Zealand's first written submission, para. 187; United States ' first written submiss ion, 
para. 301. 
1361 Panel Report, Argentina – Import Measures , para. 6.258.  
1362 New Zealand 's first written submission, para. 191  (referring to Article 14 (1) and 14(2) , 
MOT 46/2013 , Exhibit  JE-18). 
1363 New Zealand 's first written submission , para. 19 3 (referring to Appellate Body Report, Chile – Price 
Band System , para. 236).  WT/DS477/R • WT/DS478/R  
 
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  of GATT and WTO panels.1364 New Zealand argues that the panel in China – Raw Materials  
confirmed the "inherent " restrictiveness of a minimum export price.  
7.430.   New Zealand also submits that the beef reference price also limits imports by creating 
uncertainty for importers since they are unable to predict if, or when, importation of bovine 
animals and animal products will be prohibited as a consequence of the market price of beef falling 
below the reference price. According to New Zealand, this affects the ability of importers to plan 
their imports in advance, and leaves importers constantly at risk that imports will be prohibited 
entirely due to price fluctuations that are ou tside of their control.1365 For New Zealand, measures 
such as this which "create uncertainty and affect investment plans " have the effect of limiting 
imports, and are therefore inconsistent with Article XI:1.1366  
7.431.   Responding to Indonesia's argument that "[t]o da te there has never been an import of 
secondary cuts of beef that has been restricted or limited due to the reference price system in 
effect during 2013 - 2015"1367, New Zealand contends that it is correct that no imports have been 
directly prohibited  due to t he beef reference price for the following two reasons:1368 first, 
Indonesia's import regime limits imports through a range of other measures which have the effect 
of limiting supply of beef in the Indonesian market and thus increasing prices – thereby keeping  
the price of beef above the reference price1369, and second, because since December 2014, 
imports of bovine secondary cuts have been prohibited by virtue of Measure 10 and accordingly, 
while it may be strictly correct that imports of beef have not been prohi bited by the reference 
price, this is because there is a prohibition on imports of these products at all times.1370 New 
Zealand also does not agree with Indonesia's contention that imports of secondary beef cuts have 
not been "restricted or limited " due to th e beef reference price since this measure creates 
uncertainty for importers as to whether or when imports will be permitted.1371 This uncertainty is 
enhanced by the fact that the reference price can be amended "at any time " by the beef price 
monitoring team. As a consequence, the beef reference price limits imports at all times , not only 
when the domestic price of secondary cuts is below the reference price.1372 
7.2.20.1.2   United States  
7.432.   The United States argues that under MOT 46/2013, as amended, Indonesia allows 
importatio n of all cattle and beef products only on the condition that the Indonesian market price 
of secondary cuts of beef is above the "reference price " set by the Ministry of Trade and prohibits 
importation of all cattle and beef products when the Indonesian mar ket price of secondary cuts of 
beef falls below the reference price . The United States claims that this requirement is a prohibition 
or restriction within the meaning of Article XI:1 and, there fore, is inconsistent with GATT  1994 
Article XI:1.1373 Additionall y, the United States claims that this requirement is not a duty, tax, or 
other charge, and, therefore, is within the scope of Article XI:1.1374 
7.433.   The United States submits that MOT 46/2013, as amended, provides that if the market 
price of secondary cuts of beef  falls below a reference price set by the Minister of Trade (Rp 
76,000.00/kg, as set by MOT 46/2013), all imports of Appendix I products are prohibited until the 
market price again rises to the reference price. According to the United States, this requirem ent 
places an explicit limitation on imports of Appendix I products.1375 For the United States, the 
reference price requirement is similar to a minimum import price requirement, which previous 
panels have considered in the context of Article XI:1. The United States submits that in China – 
Raw Materials , the panel recognized the "applicability of Article XI:1 to minimum price 
                                                
1364 New Zealand 's first written submission, para. 194 (referring to GATT Panel Report, EEC – Minimum 
Import Prices, paras. 4.9 and 4.14;  GATT Panel Report , Japan – Semi-conductors , para. 105; and  Panel Report  
China–Raw Materials , paras. 7.1081 -7.1082).  
1365 New Zealand 's first written submission, para. 195 . 
1366 New Zealand 's first written submission, para. 19 6 (referring to Panel Report, Colombia – Ports of 
Entry,  para.7.240).  
1367 New Zealand 's second written submission, para. 156 (referring to Indonesia 's additional  response to 
the Panel question  No. 55, para.  37). 
1368 New Zealand 's second written submission, para. 156.  
1369 New Zealand 's second written submission, para. 157.  
1370 New Ze aland 's second written submission, para. 158  
1371 New Zealand 's second written submission, para. 159 (referring to New Zealand 's first written 
submission, paras. 195 -196).  
1372 New Zealand 's second written submission, para. 159.  
1373 United States ' first written su bmission, para. 3 09; second written submission, para. 42.  
1374 United States ' first written submission, fn. 462.  
1375 United States ' first written submission, para. 311.  WT/DS477/R • WT/DS478/R  
 
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  requirements "1376, and that the panel found that an analogous minimum export price requirement 
was a "restriction " under Article XI:1.1377 The United States argues that the reference pr ice 
requirement is even more categorical than the minimum import or export prices found by previous 
panels to be "restrictions " because it prohibits any imports once the reference price has been 
reached, and prohib its imports of all beef products, not merely secondary cuts, if the price of 
secondary cuts falls below the reference price .1378  
7.434.   The United States further contends that the reference price also has a limiting effect on 
imports at other times because the thre at of such a broad restriction reduces the incentives for 
importation of these products overall since importers may refrain from contracting for these 
products given this risk that the price could fall below the reference price .1379 The United States 
also cla ims that the reference price requirement would tend to limit importation by discouraging 
price competition because imports of all products are prohibited if the market price of secondary 
cuts falls to or below the reference price, and consequently, importe rs would be discouraged from 
competing to introduce lower price imports.1380  
7.2.20.1.3   Indonesia  
7.435.   Indonesia has not presented substantial arguments in relation to this measure apart from 
a defense under Article XX(b) of the GATT 1994 and its reliance upon Article XI:2( c)(ii) of the 
GATT 1994 .1381 
7.2.20.2   Analysis by the Panel  
7.436.   The task before the Panel is to establish whether, as claimed by the co -complainants1382, 
Measure  16 which provides for reference prices for beef products has a limiting effect on 
importation  contrary to Article  XI:1 of the GATT 1994, in particular because the importation of 
beef products is prohibited when the domestic price of secondary cuts of beef falls b elow the 
reference price.  
7.437.   We begin by observing  that the co -complainants argue d that Measure 16 constitute s a 
restriction on importation1383, and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.1384 New Zealand argue d that the components of Indonesia's 
import licensing regime for animals, animal products and horticult ural products, which include 
Measure 16, constitute prohibitions or restrictions made effective through an "import licence " or, 
alternatively, an "other measure ".1385 The United States submit ted that Article XI:1 applies to any 
"restriction, " including those "made effective through quotas, import or export licenses or other 
measures ".1386 
7.438.   We note that Indonesia has not contested the co -complainants' characterisation of 
Measure  16.1387 Rather, it has responded that its measures a re outside the scope of Article  XI:1 
because they are automatic import licensing regimes.1388 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  16 in Section 2.3.3.7 
above , we concur with the co -complainants that Measure  16 is not a duty, tax, or other charge and 
it is therefore not excluded explicitly from the scope of Ar ticle XI:1 of the GATT  1994.  
                                                
1376 United States ' first written submission, para. 312 (referring to Panel Report,  China – Raw Materials , 
para. 7.1075 and GATT Panel EEC – Minimum Import Prices , para. 4.9).  
1377 United States ' first written submission, para. 312 (referring to Panel Report, China – Raw Materials , 
para. 7.1081 ). 
1378 United States ' first written submission, para. 313.  
1379 United States ' first written submission, para. 314 . 
1380 United States ' first written submission, para. 315.  
1381 Indonesia 's first written submission, para. 167; second written submission, para. 199.  
1382 New Zealand 's first written submission, para. 192; United States ' first written submission, 
para. 309; second written submission, para. 42.  
1383 New Zealand 's first written submission, para. 192; United States ' first written submission, 
para. 309; second written submission, para. 42.  
1384 New Zealand 's first written su bmission, para. 208; United States ' first written submission, fn. 462.  
1385 New Zealand 's first written submission, para. 203.  
1386 United States ' first written submission, para. 142.  
1387 Indonesia 's response to Panel question No.  10. 
1388 Indonesia 's second written submission, para. 165.  WT/DS477/R • WT/DS478/R  
 
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  7.439.   As with the previous measures1389, we proceed to examine whether the co -complainants 
have demonstrated that Measure  16 prohibits or restricts trade, rather than examining the means 
by which such prohibition or restriction would be  made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure  16 has a limiting effect on 
importation . To carry out this analysis, we recall that the Panel is to e xamine the design, 
architecture  and revealing st ructure of Measure  16, within its relevant context.   
7.440.   As described in Section 2.3.3.7 above , we observe that Measure 16 consists of the 
implementation of a reference price system on imports of Appendix  I animals and animal pr oducts 
and the ensuing suspension of imports when the domestic market price of secondary beef cuts 
falls below the pre -established reference price.1390 This Measure is implemented by means of 
Article 14 of MOT 46/2013 , as amended . Pursuant to these provisions , in the event that the 
market price of secondary cuts of beef is below the established r eference price, imports of animals 
and animal products, as included in Appendix I , are suspended . Imports are resumed when the 
market price reaches again the reference  price. The reference price is set at 76,000 Rupiah/kg.1391 
7.441.   We observe that, a s was the case with Measure  7, the co-complainants ' challenge against 
Measure  16 appear s to be two -fold; on the one hand, they con sider that the design, structure and 
operation of M easure  16 results in a straight import ban when the reference price system is 
triggered1392; and, on the other hand, that same design, structure and operation results in 
restrictions having a limiting effect on importation even when  the reference price system  has not 
actually been triggered.1393  
7.442.   With respect to  the consideration of Measure  16 as imposing an import ban when the 
reference price system is triggered, New Zealand argue d that this measure has the effect of 
limiting imports by prohibiting the importati on of bovine animals and animal products when the 
domestic market price of these products falls below a stipulated reference price, thereby 
constituting a prohibition or restriction on imports in breach of Article XI:1.1394 The United States 
agree d with this argument .1395  
7.443.   Regarding the limiting effects on importation even where the reference pric e system has 
not been triggered,  New Zealand  argued that  the reference price also limits imports by creating 
uncertainty for importers : importers  are unable to predict i f, or when, importation of bovine 
animals and animal products will be prohibited as a consequence of the market price of beef falling 
below the reference price. According to New Zealand, this affects the ir ability to plan their imports 
in advance, and leav es them constantly at risk that imports will be prohibited entirely due to price 
fluctuations that are outside of their control.1396 The United States agreed that this is the case 
because the threat of such a broad restriction reduces the incentives for impor tation of these 
products overall since importers may refrain from contracting for these products given this risk 
that the domestic price could fall below the reference price. The United States also argued  that this 
Measure would tend to limit importation b y discouraging price competition because if imports of all 
products are prohibited when  the market price of secondary cuts falls to , or below , the reference 
price, importers would be discouraged from competing to introduce lower price d imports.1397   
7.444.   Concerni ng the alleged import ban, we o bserve that  pursuant to this Measure, importation 
is "postponed ", which in practice means that imports are prohibited  when the market price falls 
below the pre -established reference price. Whenever the reference price system is activated, 
imports are temporarily suspended or banned . Our understanding of the functioning of the 
reference price system is that imports are not exactly "postponed " in the sense of deferred  or put 
on hold because, as we understand from the letter of t he regulation, the authorized import 
volumes are not carried over to the next validity period.  Imports are resumed when the market 
price reaches again the reference p rice. We observe that the ban extends to all animals and animal 
                                                
1389 See, for instance, paragraph  7.76 above.  
1390 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written submission, para. 62; United  States ' first written submission, para. 131. 
1391 Article 14 of MOT 46/2013, as amended , Exhibit JE -21. This price level has remained unchanged 
since it became effective on 2 September 2013.  Indonesia 's response to Panel question No.  35. 
1392 New Zealand's first writt en submission, para. 191. United States' first written submission, para. 311.  
1393 United States' first written submission, para. 314.  
1394 New Zealand 's first written submission, para s. 191 and 192 (referring to Article 14(1) of  
MOT 46/2013 , Exhibit  JE–18). 
1395 United States ' first written submission, para. 309; second written submission, para. 42.  
1396 New Zealand 's first written submission, para s. 195 -196. 
1397 United States' first written submission, para. 315.  WT/DS477/R • WT/DS478/R  
 
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  products listed in Appendi x I of MOT  46/2013, as amended, whatever their price. Therefore, the 
ban is absolute even if some of the secondary cuts of beef are above the reference price.   
7.445.   We thus observe that the operation of the reference price system is rather simple: once 
the dome stic price for  secondary cuts of  beef falls below the reference price established by the 
Ministry of Trade, imports of all bovine animals and animal products are suspended. Hence, once 
the reference price system is triggered, there is an absolute ban for t he importation of these 
products and no procedures exist to defer imports of previously approved quantities to the next 
validity period.  
7.446.   We concur with the co -complainants that Indonesia's reference price is similar to minimum 
import price mechanisms  that previous panels and GATT panels such as EEC – Minimum Import 
Prices, Japan – Semi-conductors  and China – Raw Materials , have found to be inconsistent with 
Article XI:1 of the GATT.1398 We recall that the panel in China – Raw Materials  confirmed the 
"inherent " restrictiveness of a minimum export price.1399 We further agree with the United States 
that Measure  16 is even more categorical than the minimum import or export prices found by 
previous panels to be "restrictions " because it prohibits any imports once the reference price 
system has been triggered, and prohibits imports of all beef products, not only secondary cuts, if 
the price of secondary cuts falls below the reference price.1400 
7.447.   We thus conclude that the design, architecture and re vealing structure of 
Measu re 16 results in a prohibition on importation each time the reference price system is 
triggered and it is therefore inconsistent with Article XI:1 of the GATT 1994.  
7.448.   Concerning the alleged restrictive effect of this measure in situations where the domestic 
price is above the reference price , we concur with the co -complainants that this Measure has 
limiting effect s even when  the reference price sy stem has not been actually triggered, by creating 
uncertainty and affecting investment plans. The evidence supplie d by Indonesia suggests that, in 
the course of 2013 -2015, the domestic market price of secondary cuts of beef never dipped below 
the reference price; however, during the same period, the domestic price of beef moderately 
increased.1401 Uncertainty arises from  the lack of transparency of the reference price system: the 
calculation methodology remains largely unclear since its constitutive elements are not known or 
published by the Beef Price Monitoring Team1402; and the timing of the introduction of a new 
referenc e price remains imprecise because it can be re -evaluated at any time.1403 Even if importers 
were able to predict price fluctuations in attempting to anticipate the activation of the system, the 
terms of importation are locked during three months and must be d ecided in the application 
window immediately preceding the import validity period, under Indonesia's import licensing 
regime.1404   
7.449.   The design and structure of Measure 16 also incentivises importers to be conservative in 
the volume of secondary cuts of beef t hey include in the ir applications for MOA R ecommendations 
and Import Approvals because, similar to our analysis in paragraph  7.218 above  regarding the 
reference price for chillies and shallots, an increase of the supply of s econdary cuts of beef might 
increase the likelihood of the system being triggered and importation being "postponed ". In this 
sense, t he mere possibility  that the importation  of animals and ani mal products listed in 
Appendix  I of MOT  46/2013, as amended, ma y be banned altogether creates incentives for  
importers to limit the requested volume of imports of secondary cuts of beef into Indonesia at any 
time and not just when the reference price is triggered .  
                                                
1398 New Zealand 's first written submission, para. 194 (ref erring to GATT Panel Report, EEC – Minimum 
Import Prices, para. 4.9 and 4.14, GATT Panel Report , Japan – Semi-conductors , para. 105; and Panel Report 
China–Raw Materials , paras. 7.1081 -7.1082). United States ' first written submission, para. 312 (referring to 
Panel Report,  China – Raw Materials , para. 7.1075 and GATT Panel EEC – Minimum Import Prices , para. 4.9).  
1399 Panel Report, China – Raw Materials , para. 7.1081 . 
1400 United States ' first written submission, para.  313. 
1401 Exhibit IDN –33, submitted by Indonesi a in support of its response to Panel question No. 56.  
1402 Indonesia's  response to Panel Questions no . 35. 
1403 Article 14(3) of MOT 46/2013, as amended, Exhibit JE -21. Furthermore, in response to Panel 
Questions nos. 35 and 87, Indonesia confirms that the curr ent reference price for beef is "effective from 
2 September 2013 to 28 January 2016" and that "there has not been a recalculation of the price from 
2 September 2013 to present."  
1404 United States' comments to Indonesia's responses to Panel question No. 87.  WT/DS477/R • WT/DS478/R  
 
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  7.450.   In this respect, as we explained with respect to Meas ure 7, the pa nel in Argentina – Import 
Measures confirmed the approach taken by earlier panels, including Colombia – Ports of Entry1405, 
that "uncertainty " created by a measure may constitute a restriction within the meaning of 
Article  XI:1.1406 In our view, as concluded with respect to Measure  7, there is inherent uncertainty 
in the reference price system for beef products.  
7.2.20.3   Conclu sion 
7.451.   For the reasons stated above, we find that Measure  16 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of i ts design, architecture and revealing structure,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.21   Whether Measur e 17 (Import licensing regime for animals and animal products 
as a whole ) is inconsistent with Article  XI:1 of the GATT 199 4 
7.2.21.1   Arguments of the Parties  
7.2.21.1.1   New Zealand  
7.452.   New Zealand claims that although each component of Indonesia's import licensing regime 
for animals and animal products constitutes an independent restriction on imports in violation of 
Article XI:1, these individual r estrictions and prohibitions do not exist in a vacuum, but rather 
operate in conjunction with each other element to form an overarching trade restrictive measure 
inconsistent with Article XI:1 of the GATT 1994.1407 New Zealand submits that in a decision uphel d 
by the Appellate Body, the panel in Argentina – Import Measures  considered the existence and 
content of the individual trade restrictive measures, the manner in which they operated in 
combination, and thereby determined the existence and content of a sin gle measure.1408 New 
Zealand claims that the measures in the present dispute are similar to those considered in 
Argentina – Import Measures  since the individual components of Indonesia's import licensing 
regime each contribute towards realizing Indonesia's po licy objective of reducing imports in order 
to achieve "self-sufficiency " in various food products, especially beef. According to New Zealand, 
this objective permeates each individual component of Indonesia's import licensing regime and it 
would therefore be artificial to consider each component of Indonesia's regime as independent and 
unrelated. New Zealand argues that, when viewed as a collective whole in light of its underlying 
objective, the true extent of the regime's restrictiveness becomes apparent.1409 
7.453.   New Zealand argues that Indonesia's import licensing regime, viewed as a whole, has a 
limiting effect on imports because the regime seeks to limit imports through three key 
mechanisms, reflected in the specific measures previously  identified by New Zealan d: 
(i) prohibition on the importation of certain beef products, (ii) market access limitations for 
animals and animal products and (iii) limitation on importation by creating uncertainty and 
imposing practical thresholds on importation.1410 New Zealand mainta ins that through these 
mechanisms, Indonesia undermines its key market access obligation under Article XI:1 of the 
GATT 1994 and that by creating an overall environment which is hostile to imports and importers, 
Indonesia's import licensing regime imposes strong disincentives for commercial operators to 
conduct importation and invest in developing import businesses. New Zealand argues that in this 
sense, the regime is more restrictive when viewed as a whole than simply the sum of its parts.1411  
7.454.   According to N ew Zealand, components of Indonesia's import licensing regime, both when 
viewed as individual measures and as a single overarching measure, constitute prohibitions or 
restrictions made effective through an "import licence " or, alternatively, an "other meas ure" within 
the meaning of Article XI:1 of the GATT 1994.1412 New Zealand submits that Indonesia's import 
licensing regime, and each of its components, is made effective though applications for MOA 
Recommendations, Import Approvals and Importer Designations, which constitute conditions for 
the importation of certain products and that such measures fall within the ordinary meaning of the 
                                                
1405 Panel Report, Colombia – Ports of Entry , para. 7.240.  
1406 Panel Report, Argentina – Import Measures , para. 6.260.  
1407 New Zealand 's first written submission, para. 198.  
1408 New Zealand 's first written submission, para. 199 (referring to Panel Report, Argentina – Import 
Measures , para s. 6.223 –6.225 ). 
1409 New Zealand 's first written submission, para. 200;  second written submission, para. 171.  
1410 New Zealand 's first written submission, para. 201.  
1411 New Zealand 's first written submission, para. 202; second written subm ission, para. 1 72. 
1412 New Zealand 's first written submission, para. 203.  WT/DS477/R • WT/DS478/R  
 
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  phrase "made effective through  … import  … licences ".1413 For New Zealand, Indonesia has not 
rebutted the case established by the  co-complainants that each of the measures at issue in this 
dispute are "restrictions " within the meaning of Article XI:1 of the GATT 1994 and that each 
element of Indonesia’s import licensing regime for animals and animal products operates in 
conjunction with each other element to form an overarching trade -restrictive measure.1414 
In addition, New Zealand contends that Indonesia has not addressed the co -complainants' 
submission that the combined operation of the individual components of Indonesia's import 
licensing regime for animals and animal products creates a regime which is even more restrictive 
than the sum of its individual components.1415   
7.455.   New Zealand alternatively submits that even if Indonesia's import licensing regime for 
animals and animal products, and its individual components, are not considered to be made 
effective through an "import licence ", it is clear that they are made effective through an "other 
measure " for the purposes of Article  XI:1.1416 New Zealand argues that the term "other measures " 
in Article XI:1 is a "broad residual category "1417, which includes laws and regulations as well as any 
other measures which prohibit or restrict imports, irrespective of their form or legal status.1418 New 
Zealand claims that the panel in Argentina – Import Measure s confirmed the wide scope of "other 
measures ", noting that the "only measures that are excluded from the scope of Article XI:1 of the 
GATT 1994 are those that take the form of duties, taxes or other charges ".1419 
7.2.21.1.2   United States  
7.456.   The United States claims that I ndonesia imposes numerous restrictions and prohibitions on 
the importation of animals and animal products through its import licensing regime. The United 
States argues that as set out in its arguments relating to the discrete elements of Indonesia's 
Import  Licensing System, it considers that the requirements that form part  of that regime are 
each, when considered individually, inconsistent with Article XI:1 of the GATT 1994. The United 
States further argues that when Indonesia's import licensing regime for animals and animal 
products is considered as a whole, including these overlapping and interdependent requirements, 
that regime constitutes a restriction inconsistent with Article XI:1.1420 
7.457.   The United States submits that Indonesia's import licensing regime mai ntained through 
MOT 46/2013, as amended, and MOA 139/2014, as amended, imposes numerous limitations and 
limiting conditions on importation and has various limiting effects on the importation of animals 
and animal products. The United States argues that by imposing numerous requirements that 
importers must meet as conditions for permission to import and on the act of importation, the 
import licensing regime is, by its design and structure, an instrument through which Indonesia 
controls and limits the importa tion of animals and animal products.1421 The United States contends 
that due to the way the requirements of the regime interact with and reinforce each other, the 
limitations or limiting effect of the regime as a whole on importation is greater than the sum o f its 
individual components and thus the Indonesian regime is a "restriction " within the meaning of 
Article XI:1, and Indonesia breaches Article XI:1 by instituting or maintaining it.1422 
7.2.21.1.3   Indonesia  
7.458.   Indonesia claims that , since the co -complainants have failed to establish that any of the 
component parts of Indonesia's import licensing regime for animals and animal products constitute 
restrictions on imports, it follows that its import licensing regime as a whole is not a "restriction " 
within the meaning of Arti cle XI:1.  
                                                
1413 New Zealand 's first written submission, para. 205.  
1414 New Zealand 's second written submission, para. 171.  
1415 New Zealand 's second written submission, para. 172.  
1416 New Zealand 's first w ritten submission, para. 206.  
1417 New Zealand 's first written submission, para. 207 (referring to Panel Report, Argentina – Hides and 
Leather , para. 11.17).  
1418 New Zealand 's first written submission, para. 207 (referring to GATT Panel Report, Japan – Semi-
conductors , paras. 106 and 117).  
1419 New Zealand 's first written submission, para. 207 (referring to Panel Reports, Argentina – Import 
Measures , para. 6.435, India – Quantitative Restrictions , para. 5.142).  
1420 United States ' first written submission, para. 317; s econd written submission, para. 47.  
1421 United States ' first written submission, para. 318.  
1422 United States ' first written submission, para. 326; second written submission, para. 48 . WT/DS477/R • WT/DS478/R  
 
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  7.459.   Indonesia also submits two arguments to justify why its import licensing regime for 
animals and animal products, as a whole, is not in violation of Art icle XI:1 of the GATT  1994: 
(i) because it is an automatic import licensing regime, and (ii) b ecause it is not a quantitative 
restriction.  
7.460.   Regarding its first argument, Indonesia claims that its import licensing regime for certain 
animals and animal products is automatic pursuant to Article 2 of the Import Licensing 
Agreement .1423 For Indonesia, an au tomatic import licensing regime is expressly permitted under 
Article 2.2(a) of the Import Licensing Agreement  and therefore it is excluded from the scope of 
Article XI:1 of GATT 1994.1424 Indonesia contends that it has repeatedly submitted that no 
application  for Import Approval has ever been rejected for certain anima ls and animal products 
provided that all legal requirements set fort h under MOT 46/2013 or MOT 5/2016 have been 
fulfilled by the importers in their application.1425 Indonesia argues that this shows that import 
licences for certain animals and animal products implemented through MOA Recommendations and 
Import Approvals have been granted in all cases pursuant to Article 2(1) of the Import Licensing 
Agreement and that the co -complainants have failed to submit any evidence indicating that an 
application of RIPH/MOA -Recommendation or Import Approval was rejected when all legal 
requirements are fulfilled.1426 
7.461.   Indonesia further contends that its import licensing system for certain animals and animal 
products im plemented through MOA  Recommendations  and Import Approvals  is not administered 
in such a manner as to have restricting effects on imports subject to automatic licensing pursuant 
to Article 2 (2)(a) of the Import Licensing Agreement because it complies with  the elements of this 
provision.1427 For Indonesia, t he co -complainants have not argued  that its import licensing for 
certain animals and animal products limits the eligibility of the person, firm, or institution to apply 
for, and obtain, an import licence because any person, firm or institution is equally eligible to apply 
for and to obtain import licences.1428 With respect to the timing of applications, Indonesia contends 
that, pursuant to Article 11(3) of MOT 46/2013, Import App rovals must be granted within 
2 working days and that , pursuant to Article 25 of MOA 139/2014 , MOA Recommendations  must 
be granted within 7 working days.1429 
7.462.   Responding to the co -complainants' argument that its import licensing regime for certain 
animals and animal products is not automatic  because the licence applications cannot be 
submitted on any working day prior to the customs clearance of the goods  and that this application 
window requirement has a restricting effect on imports1430, Indonesia contends that this narrow 
interpretation of Article 2 (2)(a)(ii) of the Import Licensing Agreement is incorrect for two 
reasons.1431 First, pursuant to MOT 46/2013, the Import Approvals application window opens one 
month prior to the start of the validity periods and is only relevant to products listed un der 
Appendix  I. There is no application window for products listed under Appendix II.1432 Second, 
Indonesia disagrees with the co -complainants' broad interpretation of Article 2(2)(a)(ii) of the 
Import Licensing Agreement, whereby an import licence applicatio n must be accepted on any 
working day prior to customs clearance, with indefinite time.1433 For Indonesia, A rticle 2 (2)(a)(ii) 
of the Import Licensing Agreement must be see n in conjunction with Article 1 (6) of the Import 
Licensing Agreement, which acknowledge s that an application window for import licensing 
application procedures is allowed. Indonesia contends that it allows a one -month application 
window to apply for MOA Recommendations  for animal products, and a one -month application 
window for Import Approv als. For Indonesia, this is  already in line with Article 1 (6) of the Import 
Licensing Agreement.1434 
                                                
1423 Indonesia's second written submission, paras. 44 and 66.  
1424 Indonesia's second written submission, para. 67.  
1425 Indonesia's second written submission, para. 47 (referring to Indonesia's first written submission, 
paras. 63 and 176; opening statement during the first substantive meeting, para. 18; responses to Panel 
questions Nos.  8 and 52 ). 
1426 Indonesia's second written submission, paras. 50 and 51.  
1427 Indonesia's second written submission, para. 52.  
1428 Indonesia's second written submission, para. 53.  
1429 Indonesia's second written submission, para. 54.  
1430 Indonesia 's second written sub mission, para. 55  (referrin g to United States ' first written submission , 
paras . 386-387 and New Zealand 's first written submission, paras . 423-426).  
1431 Indonesia 's second written submission, para. 55.  
1432 Indonesia's second written submission, para. 68.  
1433 Indonesia's second written submission, para. 59.  
1434 Indonesia's second written submission, paras. 64 -65. WT/DS477/R • WT/DS478/R  
 
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  7.463.   Regarding the second argument, Indonesia contends that even if its import licensing 
regime for animal and animal  products is considered to fall within the sco pe of Article 4.2 of the 
Agreement on Agriculture or Article XI:1 of GATT 1994, the design, architecture, and revealing 
structure of its import licensing regime as a whole is not a "quantitative restriction ".1435 Indonesia 
submits that not every condition or burden placed on importation or exportation will be 
inconsistent with Article XI but only those that are limiting, that is, those that limit the importation 
of products are inconsistent  with Article XI . Indonesia contends that this limitation need not be 
demonstrated by quantifying the effects of the measure at issue, but rather, such limiting effects 
can be demonstrated through the design, architecture, and revealing structure of the measure at 
issue considered in its relevant context.1436 For Indonesia, a co mplainant must show through clear 
and convincing evidence that the measure at issue has a "limiting effect on importation " and that 
just because Article XI:1 do es not require precise quantification of the trade effects of a challenged 
measure does not mean  that a complainant is excused from demonstrating that the measure has 
some effect on trade.1437 According to Indonesia, the co -complainants have failed to present 
sufficient pre - and post - implementation import data to support their assertion that its import  
licensing regime for animal and animal  products "as a whole " operates to restrict the quantity of 
imports. Indonesia asserts that there is no reason to believe  that there is a causal connection 
between the slowing of imports in the middle of the year, as presented by New Zealand1438, and 
the application windows and validity periods for Indonesia's import licenses. Indonesia argues that, 
on the contrary, it has shown that the complainants' market share increased for certain animal and 
animal  products, both fre sh and processed.1439 
7.464.   In the alternative, Indonesia claims that its import licensing regime for animals and animal 
products as a whole falls within the general exceptions included in subparagraphs (a), (b) and (d) 
of Article XX of the GATT 1994.1440 
7.2.21.2   Analysis by the Panel  
7.465.   The task before the Panel is to establish whether, as claimed by the co -complainants1441, 
Measure  17, i.e. Indonesia's import licensing regime for animals and animal products as a whole , 
is a restriction inconsistent with Article XI:1 of the GATT  1994. In particular, the Panel is to 
determine whether Measure  17 has a limiting effect on importation  as a result of the combined 
operation of the different requirements that compose Indonesia's import licensing regime for 
animals and animal products.  
7.466.   We co mmence by observing that the co -complainants argue d that Measure 17 constitutes 
a restriction on importation1442, and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.1443 New Zealand argue d that the components of Indonesia's 
import licensing regime for animals, animal products and horticultural products, which include 
Measure 17, constitute prohibitions or restrictions made effective through an "import licence " or, 
alternatively, an "other measure ".1444 The United Sta tes submit ted that Article XI:1 applies to any 
"restriction, " including those "made effective through quotas, import or export licenses or other 
measures ".1445 
7.467.   We observe that Indonesia has not contested the co -complainants' characterisation of 
Measure  17.1446 Rather, it has responded that its measures a re outside the scope of Article  XI:1 
because they are automatic import licensing regimes.1447 We recall our conclusion in 
                                                
1435 Indonesia's second written submission, para. 68.  
1436 Indonesia's second written submission, para. 70 (referring to Appellate Body Reports, Argentina – 
Import Measures , para. 5.217 ). 
1437 Indonesia's second written submission, para. 71.  
1438 Indonesia's second written submission, para. 73 (referring to  New Zealand 's first written submission, 
Annex 5 ). 
1439 Indonesia's second written submission, para. 74 (referring to  Indonesia 's first written submission, 
para. 1 78).  
1440 Indonesia's first written submission, para . 170.  
1441 New Zealand's first written submission, para. 198. United States ' first written submission, 
para. 317; second written submission, para. 47.  
1442 New Zealan d's first written submission, para. 198; second writte n submission, para. 171. 
United  States ' first written submission, para. 317; second written submission, para. 47.  
1443 New Zealand 's first written submission, para. 208; United States ' first written submis sion, fn. 467.  
1444 New Zealand 's first written submission, para. 203.  
1445 United States ' first written submission, para. 142.  
1446 Indonesia 's response to Panel question No.  10. 
1447 Indonesia 's second written submission, para. 165.  WT/DS477/R • WT/DS478/R  
 
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  Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the GATT 1994. Given the description of Measure  17 in Section  2.3.3.8 
above , we concur with the co -complainants that Measure  17 is not a duty, tax,  or other charge and 
it is therefore not excluded explicitly from the scope of Article  XI:1 of the GATT  1994.  
7.468.   As with the previous measures1448, we proceed to examine whether the co -complainants 
have demonstrated that Measure  17 prohibits or restricts trade, rather than examining the means 
by which such prohibition or restriction would be made effective. In doing so, we will determine 
whether the co -complainants have demonstrated that Measure  17 has a limiting effect on 
importation . We further understand that the co -complainants are challenging Indonesia's import 
licensing regime for animals and animal products as a whole on grounds that it is distinct from 
Measures 10 through 16, inasmuch as it relates to the combined effect and operation of those 
measures to achieve certain policy goals.1449 
7.469.   In this respect, New Zealand claim ed that although each component of Indonesia's import 
licensing regime for animals and animal products constitutes an independent restriction on imports 
in violation of Article XI:1,  these in dividual restrictions and prohibitions do not exist in a vacuum, 
but rather operate in conjunction with each other to form an overarching trade restrictive measure 
inconsistent with Article XI:1 of the GATT 1994.1450 New Zealand submit ted that in a decision 
upheld by the Appellate Body, the panel in Argentina – Import Measures  considered the existence 
and content of the individual trade restrictive measures, the manner in which they operated in 
combination, and thereby determined the existence and content of a  single measure.1451 
New Zealand claimed that the measures in the present dispute are similar to those considered in 
Argentina – Import Measures  since the individual components of Indonesia's import licensing 
regime each contribute towards realizing Indonesia 's policy objective of reducing imports in order 
to achieve "self-sufficiency " in various food products, especially beef. According to New Zealand, 
this objective permeates each individual component of Indonesia's import licensing regime and it 
would there fore be artificial to consider each component of Indonesia's regime as independent and 
unrelated. New Zealand argued that it is when viewed as a collective whole in light of its 
underlying objective that the true extent of the regime's restrictiveness beco mes apparent.1452  
7.470.   The United States s hared the same view and explained  that the various import 
requirements as maintained through MOT 46/2013, as amended, and MOA 139/2014, as 
amended, impose numerous limitations and limiting conditions on importation and ha ve various 
limiting effects on the importation of animals and animal products.1453 The United  States 
contended that due to the way the requirements of the regime interact with and reinforce each 
other, the limitations or limiting effect of the regime as a who le on importation is greater than the 
sum of its individual components.1454  
7.471.   Indonesia submit ted two sets of arguments to justify why its import licensing regime for 
animals and animal products, as a whole, is not in violat ion of Article XI:1 of the GATT  1994: 
(i) because it is an automatic im port licensing regime, and (ii)  because it is not a quantitative 
restriction.  Regarding its first argument, we recall our conclusion in Section 7.2.3.2.1  above 
whereby automati c import licensing procedures do not fall per se  outside the scope of Article XI:1 
of the GATT 1994.  Regarding the second argument, Indonesia contend ed that even if its import 
licensing regime for animals and animal products  is considered to fall within th e scope of Article 
4.2 of the Agreement on Agriculture or Article XI:1 of GATT 1994, the design, architecture, and 
revealing structure of Indonesia's import licensing regime as a whole is not a "quantitative 
restriction ".1455 For Indonesia, a complainant must  show through clear and convincing evidence 
that the measure at issue has a "limiting effect on importation " and that just because Article XI:1 
does not require precise quantification of the trade effects of a challenged measure does not mean 
a complainant  is excused from demonstrating that the measure has some effect on trade.1456 
According to Indonesia, the co -complainants have failed to present sufficient pre - and post - 
                                                
1448 See for instance, paragraph  7.76 above.  
1449 New Zealand 's first written submission, para. 200; second written submi ssion, para. 171. 
United  States ' first written submission, para. 325; Indonesia 's response to Panel question No.  82, para. 5.  
1450 New Zealand 's first written submission, para. 198.  
1451 New Zealand 's first written submission, para. 199 (referring to Panel Report, Argentina – Import 
Measures , para s. 6.223 -6.225 ). 
1452 New Zealand 's first written submission, para. 200; second written submi ssion, para s. 171 and 172 . 
1453 United States ' first written submission, para. 318.  
1454 United States ' first written submission, para. 326; second written submission, para. 48 . 
1455 Indonesia 's second written submission, para. 68.  
1456 Indonesia 's second written subm ission, para. 71.  WT/DS477/R • WT/DS478/R  
 
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  implementation import data to support their assertion that its import licensing regime f or animals 
and animal products "as a whole " operates to restrict the quantity of imports.  
7.472.   We therefore observe that central to the co -complainants ' contention that M easure  17 is 
inconsistent with Article XI:1 of the GATT 1994 is their argument relating to  the manner in which 
the different requirements operate in combination1457 and how the restrictive effect of each of the 
components of Indonesia's import licensing regime  for animals and animal products is exacerbated 
when combined.1458 Their view is that Measur es 10 to 16 are cumulatively more restrictive than 
the sum of each of the individual requirements due to the way in which the requirements interact 
with each other.1459 
7.473.   As was the case when we analysed Measure 9, we consider  that the co -complainants 
challenge  to Indonesia's import licensing system for animals and animal products as a whole, can 
be more easily understood from the standpoint of an importer wishing to import animals and 
animal products into Indonesia. As described in Section 2.2.2.2 above  and illustrated in Annex  E-2, 
this importer has to navigate through a number of requirements and procedures before it can 
effectively obtain all the necessary approvals and documents to import products into Indonesia. 
Among these r equirements and procedures, the importer will need to comply with those 
encompassed in Measures 10 through 16. The design, architecture and revealing structure of 
Indonesia's import licensing regime for animals and animal products as a whole is such that i t is 
not enough for the importer to comply with one of the requirements; it will need to comply with all 
of them in order to be able to import into Indonesia. We thus agree with the co -complainants that 
the various requirements and procedures constituting Indonesia's import licensing regime for 
animals and animal products are intrinsically related and intertwined.  
7.474.   As we have previously found, Measures 10 through 16 impose several restrictions and 
prohibitions on imports that not only limit the quantity of animals and animal products that can be 
imported into Indonesia, sometimes  imposing an absolute ban; but also affect the competitive 
opportunities of imported products, increase the costs associated with importation, affect the 
investment plans of importer s, cause uncertainty in the importation business, and create 
incentives among the importers to limit the amounts they effectively import. Although each of 
these measures is a prohibition or restriction under Article XI:1 of the GATT 1994, in its own right,  
we observe that the restrictive effects of each measure are co mpounded once they are seen as  
part of a system because they are interrelated and do not work in isolation.  
7.475.   For instance,  as explained in paragraph 7.348 above  and 7.372 above , the interaction of 
Measures 12 (Periodic fixed terms) and 13 (80% realization requirement) exacerbates the limiting 
effects of each measure. For instance, the limiting effect of the 80% realization  requireme nt is 
"magnified " when combined with Measure  12 because a number of import terms are locked in prior 
to the commencement of a quarter and the need to comply with these terms limits the flexibility 
available to importers to satisfy the 80% realization  requirement and therefore further induces 
importers to reduce the quantities they request in  their applications for  Import Approvals.1460. 
Also, as described in paragraph  7.372 above , Measure  13 and Measure 16 (beef reference price)  
mutually reinforce each other's limiting effects as importers may need to import large quantities of 
beef products during  short periods of time in order to comply with the 80%  realization 
requirement, but this may trigger the activation of the reference p rice because the market will 
have an increase in supply that may cause prices to drop.  
7.476.   This amplified or exacerbated limiting effect from the inherent interaction of Measures  10 
through 16 needs to be taken into account by importers when taking import rel ated decisions . This 
will logically lead to situations where due to the workings of these requirements, for instance, the 
prohibition of importa tion of unlisted products (Measure 10), or the activation of the reference 
price system (Measure 16), importers may be prohibited from importing certain products or may 
be subject to significant limitations as to the quantities or costs associated with imp ortation. We 
can reasonably understand how by the end of an importation process, and after having tried to 
compl y with the numerous trade -restrictive requirements imposed by Indonesia through 
Measures  10 through 16, an importer's ability to import can be severely impaired, if not impeded, 
                                                
1457 New Zealand 's first written submission, para.  200; United States ' first written submission, 
para. 317. 
1458 New Zealand 's first written submission, paras. 198 – 202; response to Panel question No.  82. 
1459 New Zealand 's first written submissi on, para. 202; second writte n submission, para. 172. 
United  States ' first written submission, para. 326; second written submission, para. 48; response to Panel 
question No.  82, paras. 15 -16. 
1460 New Zealand 's first written submission, para. 170.  WT/DS477/R • WT/DS478/R  
 
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  and the importer itself may be materially discouraged from undertaking any bus iness in Indonesia. 
In this sense, we agree with New Zealand that Indonesia' s import licensing regime for animals and 
animal products is characterize d by an overall environment which is unfavourable  to imports and 
importers, impos ing strong disincentives f or commercial operators to conduct importation and 
affect ing the investment plans  of importers.1461 Indonesia's argumentation either under the Import 
Licensing Agreement or that evidence of trade effects from the co -complainants  is required1462 
does not change t he above conclusion.   
7.477.   It thus seems to us that, as evidenced through its design, architecture and revealing 
structure, the limiting effect of each of the challenged components constituting Measure  17 is 
compounded or exacerbated as a result of their inher ent interaction as part of Indonesia's import 
licensing regime as a whole.  
7.2.21.3   Conclu sion 
7.478.   For the reasons stated above, we find that Measure  17 is inconsistent with Article XI:1 of 
the GATT  1994 because , by virtue of its design, architecture and revealing str ucture,  it constitutes 
a restriction hav ing a limiting effect on importation . 
7.2.22   Whether Measure  18 ( Sufficiency of domestic production to fulfil domestic 
demand ) is inconsistent with Article XI:1 of the GATT  1994  
7.2.22.1   Arguments of the Parties  
7.2.22.1.1   New Zealand  
7.479.   New Zeal and claims that the domestic insufficiency conditions are prohibitions or 
restrictions other than duties, taxes, or other charges "made effective through … other measures " 
within the scope of Article XI:1 of the GATT 1994. New Zealand argues that the panel  in US – 
Poultry (China)  considered that laws enacted by the legislature can constitute "other measures " for 
the purposes of Article XI:1.1463 New Zealand submits that Indonesia's legislative provisions 
restrict imports for animals and animal products and hor ticultural products when domestic 
production is deemed sufficient to meet domestic demand.1464 New Zealand argues that 
Indonesia's domestic insufficiency condition is set out in the Animal Law, Animal Law Amendment, 
Horticulture Law, Food Law and Farmers Law and that these laws, both separately and collectively, 
restrict imports of certain animals and animal products and horticultural products in a manner 
inconsistent with Article XI:1 of the GATT 1994 because they (i) prohibit and restrict imports, as 
such an d independent of the licensing regimes; and (ii) prohibit and restrict imports through 
import licensing regimes which are inconsistent with Article XI:1 as discrete restrictions and as a 
whole.1465 
7.480.   New Zealand argues that the domestic insufficiency condition prohibits and restricts 
imports, as such and independent of the licensing regimes, because (i) in circumstances when 
domestic production is deemed sufficient to meet domestic demand, the domestic insufficiency 
condition prohibits imports of certain product s; and (ii) the domestic insufficiency condition limits 
market access for imported products by creating uncertainty for importers.1466 New Zealand 
further submits that Indonesia's domestic insufficiency condition explicitly limits imports of 
animals, animal p roducts and horticultural products to circumstances when domestic production is 
deemed insufficient to meet domestic demand.1467  
7.481.   For New Zealand, this domestic insufficiency condition limits the competitive opportunities 
of imported products as they are only  given market access on the condition, and to the extent 
                                                
1461 New Zealan d's first written submission, para. 202 (referring to Meat Industry Association Statement, 
p. 8, Exhibit NZL -12); second written submission, para. 1 72 (referring to European Union 's first opening 
statement, paras. 4 -5; Australia 's third party written submi ssion, para. 60).  
1462 Indonesia 's second written submission, para. 71.  
1463 New Zealand 's first written submission, para. 296 (referring to Panel Report, US – Poultry (China) , 
para. 7.451).  
1464 New Zealand 's first written submission, para . 285 (referring to Artic le 36B of the  Animal Law 
Amendment ( Exhibit JE -5); Articles 14 and 36 of the  Food Law  (Exhibit JE -2); Articles 33 and 88 of the  
Horticulture Law  (Exhibit JE -1); and Article 30 of the  Farmers Law  (Exhibit JE -3). 
1465 New Zealand 's first written submission, pa ra. 286.  
1466 New Zealand 's first written submission, para. 287.  
1467 New Zealand 's first written submission, para. 28 8. WT/DS477/R • WT/DS478/R  
 
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  that, domestic supply is deemed insufficient to satisfy Indonesian needs.1468 New Zealand also 
argues that it is well established that the limiting effect of a measure can be demonstrated through 
its "design, architecture, and revealing structure "1469 and that in this case the legislative provisions 
based on sufficiency of domestic production are structured in such a way as to prohibit or restrict 
imports of certain products and their purpose is to protect domestic production by permitting 
imports only in circumstances where domestic production is deemed insufficient.1470 Regarding the 
uncertainties created by the domestic insufficiency condition, New Zealand argues that GATT and 
WTO panels have also found that  a limiting effect on imports contr ary to Article XI:1 of the 
GATT  1994 can occur through the "uncertainty " that the measures at issue create s for 
importers.1471 New Zealand argues that the domestic insufficiency conditions have these limiting 
effects since t he measures lack transparency and predictability and importers cannot predict when 
certain products will be prohibited from importation on the basis that domestic production is 
deemed sufficient by the government.1472  
7.482.   According to New Zealand, the domestic i nsufficiency conditions in the Animal Law, Animal 
Law Amendment, Horticulture Law, Food Law and Farmers Law also provide the basis for more 
specific measures that operate to restrict imports, including Indonesia's import licensing regime for 
animals and an imal products and for horticultural products.1473 According to New Zealand, the 
domestic insufficiency conditions in these laws thus prohibit and restrict imports, as applied 
through the import licensing regimes, since these licensing regime s are inconsistent  with 
Article  XI:1 of the GATT both as discrete elements and as a whole.1474 New Zealand argues that 
the relevant import licensing regimes are specifically designed to limit imports in order to 
incentivise domestic production with the objective of achieving d omestic self -sufficiency in the 
production of certain agriculture products. New Zealand submits that, just as the specific 
requirements in the import regime have a limiting effect on imports, the legislative provisions 
based on sufficiency of domestic prod uction that guide and enable the import licensing regimes, 
have a limiting effect on imports.1475 
7.483.   Responding to Indonesia's arguments that the sufficiency requirement s serve only as a 
general statement of Indonesia's commitment to food security and "are not ' measures' that have 
any impact on imports "1476, New Zealand contends that the provisions of Indonesia's laws that 
restrict importation based on this requirement are much more than "general statements of 
Indonesia's commitment to food security " since they crea te mandatory and enforceable obligations 
which directly prohibit certain products in certain circumstances and restrict imports by creating 
uncertainty for importers as to when imports will be permitted.1477 New Zealand also contends that 
irrespective of the examples it has provided to show how this requirement has been invoked in 
practice, WTO jurisprudence is also clear that measures may be challenged as such, irrespective of 
their application in a particular case. New Zealand finds support in the Appellate Body in 
US-Corrosion -Resistant Steel Sunset Review , which provided that challenges on an as such  basis 
to "acts setting forth rules or norms that are intended to have general and prospective application " 
are permitted in order to "protect not only existing  trade, but also the security and predictability 
needed to conduct future trade ".1478   
7.2.22.1.2   United States  
7.484.   The United States claims that Indonesia permits imports of horticultural products and 
animals and animal products only when, and to the extent that, domestic  supply of those products 
is deemed insufficient to meet Indonesians' basic needs and that such conditioning of imports is 
                                                
1468 New Zealand 's first written submission, para. 288.  
1469 New Zealand 's first written submission, para. 2 89 (referring to Appellate Body Report,  Argentina – 
Import Measures , para. 5.217).  
1470 New Zealand 's first written submission, para. 2 89. 
1471 New Zealand 's first written submission, para. 290  (referring to GATT Panel Report, Japan – Leather 
(US II), para. 55; Panel Reports, Colombia – Ports of Entr y, para. 7.240, Argentina – Import Measures , para. 
6.474); second written submission, para. 294.  
1472 New Zealand 's first written submission, para. 290.  
1473 New Zealand 's first written submission, para. 292.  
1474 New Zealand 's first written submission, para. 293.  
1475 New Zealand 's first written submission, para. 295 (referring to Appellate Body  Report , Argentina – 
Import Measures , para. 5.217).  
1476 New Zealand 's second written submission, para. 289 (referring to Indonesia 's first written 
submission, para. 161).  
1477 New Z ealand 's second written submission, para . 290.  
1478 New Zealand 's second written submission, para. 293 (referring to Appellate Body Report , US –
Corrosion -Resistant Steel Sunset Review , para. 82).  WT/DS477/R • WT/DS478/R  
 
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  inconsistent  with Article XI:1 of the GATT 1994 because it is a "restriction " on imports.1479 
Additionally, the United States claims tha t this requirement is not a duty, tax, or other charge, 
and, therefore, is within the scope of Article XI:1.1480 
7.485.   The United States argues that Indonesia's domestic insufficiency requirement explicitly 
places a limiting condition on imports by conditioning all  importation of horticultural products and 
animals and animal products on the insufficiency of domestic products to meet Indonesian 
consumers' needs , thereby severely limiting the opportunities for importation.1481 The United 
States argues that Indonesia's do mestic insufficiency condition is set out in four laws: the 
Horticulture Law, the Farmers' Law, the Animal Law, and the Food Law. The United States submits 
that individually and collectively, these laws provide that importation of horticultural products an d 
animals and animal products is permitted only if domestic production of those products is deemed 
by the government not sufficient to fulfil the needs of Indonesian consumers.  1482 The United 
States submits that it considers that, as applied through the impo rt licensing regimes, the 
domestic insufficiency condition set out in the Horticulture Law, the Farmers' Law, the Animal Law, 
and the Food Law is inconsistent with Article XI:1. However, the United States also considers that 
the domestic sufficiency condit ion, considered by itself, constitutes a restriction within the meaning 
of Article XI:1.1483 The United States also submits that the lack of transparency and predictability 
in the implementation of the domestic insufficiency requirement itself has a limiting effect on 
imports because the government does not announce how or when the sufficiency of domestic 
production to satisfy Indonesian consumers' needs will be determined or how the degree of the 
shortfall, if any, will be calculated.1484 The United States conte nds that contrary to Indonesia’s 
arguments1485, the co -complainants have submitted evidence demonstrating the domestic 
sufficiency requirement’s limiting effect on imports.1486    
7.486.   The United States maintains that previous panels have confirmed that measures that  limit 
the market access and competitive opportunities of imported products are "restrictions " under 
Article XI:1. The United States refers to the panel in Argentina – Import Measures and argues that 
it found that the "import reduction requirement involve[ d] per se  a limitation on imports "1487, and 
noted that companies did not know when a restriction would be imposed and that the 
"uncertainty " generated by Argentina's measure was "an additional and signific ant element in 
limiting imports ".1488  
7.2.22.1.3   Indonesia  
7.487.   Indonesi a claims that this measure does not have any im pact on imports and that the 
co-complainants have not presented any evidence that this measure has had any adverse impact 
on trade flows. Indonesia also argues that the language cited by the co -complainants se rves only 
as a general statement of Indonesia's commitment to food security.1489 Consequently, Indonesia 
argues that this measure is not a restriction on imports within the meaning of Article XI:1.1490 
7.2.22.2   Analysis by the Panel  
7.488.   The task before the Panel is to establ ish whether, as claimed by the co -complainants1491, 
Measure  18, which imposes a requirement whereby importation of horticultural products, animals 
                                                
1479 United States ' first written submission, para. 365; second wr itten submission, para. 51.  
1480 United States ' first written submission, fn. 514.  
1481 United States ' first written submission, para. 366.  
1482 United States' first written submission, para. 368. (referring to Article 33(1) -(2) of the Horticulture 
Law, Exhibit JE-1, Article 30 of the Farmers Law,  Exhibit JE-3, Animal Law, Exhibit JE-4, and Article 36 of the 
Food Law, Exhibit JE-2). 
1483 United States ' first written submission, para. 369.  
1484 United States ' first written submission, para. 372.  
1485 United States ' second wr itten submission, para. 52 (referring to Indonesia 's first written s ubmission, 
para. 161).  
1486 United States' second written submission, para. 52.  
1487 United States ' first written submission, para. 373 (referring to Panel Report, Argentina – Import 
Measures , para. 6.257).  
1488 United States ' first written submission, para. 368 (referring to Panel Report, Argentina – Import 
Measures , para. 6.260).  
1489 Indonesia 's first written submission, para. 161 (referring to  Article 36 of  Law 18/2009, Exhibit 
IDN-13). 
1490 Indonesia 's first written submission, para. 161.  
1491 New Zealand 's first written submission, paras. 15 -16 and 67; United States ' first written submission, 
paras. 13 and 82 -83. WT/DS477/R • WT/DS478/R  
 
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  and animal products depends upon the sufficiency of domestic supply  to fulfil domestic 
consumption , is inconsist ent with Article  XI:1 of the GATT  1994. In particular, the Panel is to 
determine whether Measure  18 as such  and in its application  through Indonesia's import licensing 
regimes , constitutes a restriction within the meaning of Article XI:1  of the GATT  1994.   
7.489.   We begin by noting that the co -complainants argue d that Measure 18 constitutes a 
restriction on importation1492 and that it is not a duty, tax, or other charge, and, therefore, is 
within the scope of Article XI:1.1493 We note that New Zealand considered  that M easure  18 
constitutes "other measures " for the purposes of Article  XI:1.1494  
7.490.   We observe that Indonesia has not contested the co -complainants' characterisation of 
Measure  18.1495 Rather, it has responded that its measures a re outside the scope of Article  XI:1 
because they are automatic import licensing regimes.1496 We recall our conclusion in 
Section  7.2.3.2.1  above whereby automatic import licensing procedures do not fall per se  outside 
the scope of Article XI:1 of the G ATT 1994.  Given the description of Measure  18 in Section  2.3.4 
above , we concur with the co -complainants that Measure  18 is not a duty, tax, or other charge and 
it is therefore not excluded explicitly from the scope of Artic le XI:1 of the GATT  1994.  
7.491.   As described in Section 2.3.4 above , we observe that Measure 18 consists of the 
requirement whereby importation of horticultural products, animals and animal products depend s 
upon Indonesia's determ ination of the sufficiency of domestic supply  to satisfy domestic 
demand .1497 This measure is implemented thro ugh Articles 36B of the Animal Law Amendment,  
Article 88 of the Horticulture Law,  Article s 14 and  36 of the Food Law and Article 30 of the Farmers 
Law. Pursuant to these provisions , importation of horticultural products  and animals and animal 
products is contingent upon the sufficiency of domestic supply for consumption and /or 
Government food reserves.  
7.492.   As we described in Section 2.2.1 above , Indonesia's legal framework for the importation of 
horticultural products and animals and animal products  consists of:  (i) the overarching legislative 
instruments encompassed by the Animal Law, Animal Law Amendment, Horticulture Law, Food 
Law and Farmers Law  and (ii)  the regulations specifically issued by the Ministry of Trade and the 
Ministry of Agriculture that regulate the two import licensing regimes at issue . In this respect, we 
note that the co -complainants' challenge to Measure 18 is twofold: they claim that the sufficiency 
requirement, as set out in the Animal Law, Animal Law Amendment, Horticulture Law, Food Law 
and Farmers Law, both separately and collectively, restrict s imports of certain horticultural 
products , animals and a nimal products (i)  as such and independent of the import licensing 
regimes , and (ii)  as applied through Indonesia's import licensing regimes  for horticultural products, 
animals and animal products .1498 
7.493.   Concerning the limiting effect of Measure  18 as such, New  Zealand argued  that the 
domestic insufficiency requirement prohibits and restricts imports, as such and independent of the 
licensing regimes, because (i) in circumstances when domestic production is deemed sufficient to 
meet domestic demand, Measure  18 pr ohibits imports of certain products; and (ii) Measure  18 
limits market access for imported products by creating uncertainty for importers1499, as they are 
only given market access on the condition, and to the extent that, domestic supply is deemed 
insufficien t to satisfy Indonesian needs.1500 The United States also consider ed that Measure  18, 
considered by itself, constitutes a restriction within the meaning of Article XI:1.1501  
7.494.   When observing the wording of the various legislative instruments encompassing 
Measure  18, we note that the Animal Law, Animal Law Amendment, Horticulture Law, Food Law 
                                                
1492 New Zealand 's first written submission, para. 286; United States ' first written submissio n, paras. 13 
and 82 -83. 
1493 New Zealand 's first written submission, para. 2 96; United States ' first written submission, fn. 514.  
1494 New Zealand 's first written submission, para. 296 (referring to Panel Report, US – Poultry (China) , 
para. 7.451).  
1495 Indonesia 's response to Panel question No.  10. 
1496 Indonesia 's second written submission, para. 165.  
1497 New Zealand's Panel Request , pp. 4-7; United States' Panel Request , pp. 4-7; New Zealand' s first 
written submission, paras. 15 -16 and 67; United  States'  first written  submission, paras. 13 and 82 -83. 
1498 New Zealand 's first written submission, para. 286.  United States ' first written submission, 
paras. 368 and 369. 
1499 New Zealand 's first written submission, para. 287.  
1500 New Zealand 's first written submission, para. 288.  
1501 United States ' first written submission, para. 369. WT/DS477/R • WT/DS478/R  
 
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  and Farmers Law  explicitly provide that imports are made contingent on the availability of 
sufficient domestic supply to satisfy domestic demand. At the general level, we not e that  Article  36 
of the Food Law establishes that imports of food "can only be done if the domestic [f]ood 
[p]roduction is insufficient and/or cannot be produced domestically ".1502 Similarly, Article 30 of the 
Farmers Law establishes a prohibition on importi ng agricultural commodities "when the availability 
of domestic Agricultural Commodities is sufficient for consumption and/or Government food 
reserves ".1503 On their face, both the Food  Law and the Farmers Law  clearly provide that 
importation of food and agric ultural commodities must be restricted when domestic production is 
sufficient to fulfil domestic consumption or government reserves.  
7.495.   At the specific level of the laws regarding horticultural products and animals and animal 
products, the principle of suffic iency is also present. For instance, Article 36B(1) of the Animal Law 
Amendment provides that the "[i]mportation of [l]ivestock and [a]nimal [p]roduct from overseas 
into the Territory of the Republic of Indonesia can be perform if domestic production and s upply of 
Livestock and Animal Product has not fulfill public consumption " (emphasis added). Similarly, 
Article  88 of the Horticultur e Law provides that  imports of horticultural prod ucts must observe 
several criteria, including the availability of domestic horticultural products and the established 
production and consumption targets for horticultural products .1504 
7.496.   We thus agree with the co -complainants  that, by conditioning the importation of food and 
agricultural commodities upon  a determination of  the suffici ency of domestic production to fulfil 
domestic demand, the above legislative instruments  encompassing Measure  18, as such, 
constitute a restriction on importation and are thus inconsistent with Article XI:1 of the 
GATT  1994.   
7.497.   We note that the co -complainan ts have also argued that Measure 18 affects the 
competitive opportunities of imported products. New Zeal and thus submitted that Measure  18 
limits the competitive opportunities of imported products because  they are only given market 
access on the condition,  and to the extent that, domestic supply is deemed insufficient to satisfy 
Indonesian needs.1505 For New Zealand, the domestic insufficiency conditions have these limiting 
effects since the measures lack transparency and predictability and importers cannot pr edict when 
certain products will be prohibited from importation on the basis that domestic production is 
deemed sufficient by the government.1506 Similarly, t he United States argued that the lack of 
transparency and predictability in the implementation of the  domestic insufficiency requirement 
itself has a limiting effect on imports because the government does not announce how or when the 
sufficiency of domestic production to satisfy Indonesian consumers' needs will be determined or 
how the degree of the short fall, if any, will be calculated.1507 
7.498.   As we found above, the legislative provisions constituting Measure 18 set out a general 
condition on imports whereby they are restricted depending on the sufficiency of domestic 
production to fulfil domestic demand. As st ated in paragraph  7.492 above , our understanding of 
Indonesia's import licensing regimes is that these overarching legislative instruments constitute 
the legal basis for the implementing regulations issued by the Ministry of  Trade and the Ministry of 
Agriculture that regulate the importation of horticultural products and animals and animal 
products. In this sense, we note Indonesia's contention  that the language cited by the co -
complainants serves only as a general statement of Indonesia's commitment to food security1508 
and agree that they do embody some of the principles that reflect the policy objectives pursued by 
Indonesia. Nonetheless, we disagree with Indonesia's statement that for this reason, Measure  18 
cannot be inconsi stent with Article  XI:1 of the GATT 1994. As New Zealand argued1509, the Animal 
Law, Animal Law Amendment, Horticulture Law, Food Law and Farmers Law , that explicitly  restrict 
importation and underpin Indonesia's import licensing regimes,  create mandatory and  enforceable 
obligations which directly prohibit certain products in certain circumstances.   
7.499.   Furthermore, we also concur with the co -complainants that the mandatory language 
employed in these instruments may also have the effect of limiting importation bec ause it may 
                                                
1502 Exhibit JE -2. 
1503 Exhibit JE -3. 
1504 Exhibit JE -1. 
1505 New Zealand 's first written submission, para. 288.  
1506 New Zealand 's first written submission, para. 290.  
1507 United States ' first written submission, para. 3 72. 
1508 Indonesia 's first written submission, para. 161 (referring to  Article 36 of Law 18/2009, 
Exhibit  IDN-13). 
1509 New Zealand 's second written submission, para . 290.  WT/DS477/R • WT/DS478/R  
 
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  create uncertainty for importers as to when imports will be permitted or banned. And this is so 
even in the absence of the implementing regulations that regulate Indonesia's import licensing 
regimes. Indeed, the lack of transparency and predict ability derived from the language of the 
legislative instruments encompassing Measure  18 results in importers not being able to anticipate 
when certain products will be prohibited from importation on the basis that domestic production is 
deemed, or not  deemed, sufficient by the government.1510  
7.500.   The Panel wishes to clarify that Members are free to pursue food and farm development 
objectives as they deem appropriate, provided they are not implemented through WTO -
inconsistent measures. Nonetheless, the sufficienc y of domestic production to fulfil domestic 
demand should not be achieved by restricting importation. In our view, the outright import 
prohibition stipulated in, for instance, Article  36 of the Food Law, Article 30 of the Farmers Law or 
Article  36B of the Animal Law Amendments  to promote self -sufficiency objectives is not in line with 
Indonesia's WTO obligations and undermines the basic principles and objective s underlying the 
multilateral trading system.  
7.2.22.3   Conclu sion 
7.501.   For the reasons stated above, we find th at Measure  18 is inconsistent as such with 
Article  XI:1 of the GATT  1994 because , by virtue of its design, architecture and revealing 
structure,  it constitutes a restriction hav ing a limiting effect on importation . Having concluded that 
Measure  18 is as su ch inconsistent with Article XI:1 of the GATT  1994, we consider that it is not 
necessary for us to continue our analysis and rule on whether Measure  18 is also inconsistent as 
applied  with Article XI:1 of the GATT  1994.  
7.3  Indonesia's defences  under Article X X of the GATT  1994  
7.3.1   Preliminary remarks  
7.502.   Indonesia raised several defences pursuant to Article XX(a), (b) and (d) of the GATT  1994 
in response to the claims made under Article 4.2 of the Agreement on Agriculture1511, Article XI of 
the GATT  19941512 and Article III  of the GATT 1994.1513 In this section of our Report, we examine 
Indonesia's defences under Article  XX with respect to our findings of inconsistency of all 
18 measures at issue with Article XI:1 of the GATT  1994.  
7.503.   We observe that when arguing the provisional j ustification under subparagraphs  (a), (b) or 
(d) of Article  XX of the GATT  1994, Indonesia chose to present some general arguments 
concerning its import licensing regimes for horticultural products and animals and animal products 
as a whole, but most of it s argumentation focused on the individual measures at issue. Indonesia 
chose a different approach to defend its measures under the chapeau  of Article  XX of the 
GATT  1994. For this aspect of its defence, Indonesia presented argumentation with respect to its  
import licensing regime for horticultural products and animals and animal products as a whole, 
with limited reference to individual measures at issue in this di spute. Not surprisingly, the 
co-complainants, in responding to Indonesia's arguments, followed the approach adopted by 
Indonesia.  
7.504.   Under these circumstances, the Panel decided to also follow Indonesia's approach in 
consider ing Indonesia's defences. We shall therefore examine the defences under the relevant 
subparagraphs of Article XX of the GATT  1994 on a measure by measure basis, while examining 
whether the relevant challenged measures have been applied in a manner consistent with the 
chapeau  of Article XX  of the GATT  1994, taking into account Indonesia's import licensing regime 
for horticultural pr oducts and animals and animal products as a whole.  
7.505.   Before proceeding to examine Indonesia's defences, we address the co -complainants' 
objections concerning the admissibility of some of those defences because of the  timing of their  
                                                
1510 New Zealand 's first written submission, para. 290.  
1511 Indonesia 's first written submissio n, paras. 61 -62. 
1512 Indonesia 's first written submission, paras. 121 and 133.  
1513 Indonesia 's first written submission, paras. 186 -188; Indonesia 's second written submission, 
para. 89. WT/DS477/R • WT/DS478/R  
 
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  introduction and the alleged absence of supporting argumentation.1514 We will then decide the 
order of our analysis of the various defences under Article  XX of the GATT  1994.  
7.3.2   Admissibility of Indonesia's defences due to late introduction and lack of 
argumentation  
7.506.   The co -complainants maintained  that Indonesia introduced seven  new Article  XX defence s 
in its response to a question from the Panel after the second substantive meeting. The 
co-complainants requested the Panel to dismiss them due to their late introduction and the 
absence of supporting argumentation.1515 
7.507.   Due to some apparent  inconsistencies between the Article  XX defence s included in 
Indonesia's first and second written submissions, the Panel had sought to clarify the scope of 
Indonesia's defences  with respect to each of the 18 m easures at issue .1516 Indonesia's response 
with respect to its defences regarding claims made by the co -complainants under Article  XI:1 of 
the GATT  1994 was as follows:  
MEASURE  
NO DESCRIPTION  ARTICLE XX DEFENCE                
subparagraph :  
(a) (b) (d) 
1 Limited application windows and validity periods   X X 
2 Periodic and fixed import terms   X X 
3 80% realization requirement   X X 
4 Harvest period requirement   X X 
5 Storage ownership and capacity requirements  X X X 
6 Use, sale and distribution requirem ents for horticultural 
products  X X X 
7 Reference prices for chillies  and fresh shallots for consumption   X  
8 Six-month harvest requirement   X  
9 Indonesia's import licensing regime for horticultural products 
as a whole . X X X 
10 Prohibition of import ation of certain beef and offal products, 
except in emergency circumstances   X X 
11 Limited application windows and validity periods   X X 
12 Periodic and fixed import terms   X X 
13 80% realization requirement   X X 
                                                
1514 New Zealand's comments on Indonesia's response to Panel question No. 115 ; United States' 
comments on Indonesia's response to Panel question No. 115.  
1515 New Zealand's comments on Indonesia's response to Panel question No. 115; United States' 
comments on Indonesia's response to Panel question No. 115.  
1516 Panel question no. 115 rea d as follows:  
We observe that, in paragraphs  148 and 149 of its first written submission, Indonesia submits 
that Measure  5 is justified under Articles  XX(b) and XX(d) of the GATT  1994. However, in 
paragraph 178 of its second written submission, Indonesia submits that Measure  5 is justified 
under Article XX(b) of the GATT for the maximum capacity requirement and Article XX(a) for the 
storage ownership requirement. This appears to also be the case with other measures. In order 
to clarify the scope of Indones ia's defence  under Article XX of the GATT  1994, please complete 
the table below indicating which subparagraph(s) of Article XX of the GATT 1994 Indonesia is 
invoking in respect of each individual measure.  WT/DS477/R • WT/DS478/R  
 
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  MEASURE  
NO DESCRIPTION  ARTICLE XX DEFE NCE                
subparagraph :  
(a) (b) (d) 
14 Use, sale and distribution of imported bovine meat and offal 
requirements  X X X 
15 Domestic purchase requirement for beef  X X  
16 Beef reference price   X  
17 Import licensing regime for animals and an imal products as a 
whole  X X X 
18 Sufficiency of domestic production to fulfil domestic demand   X  
 
7.508.   As previously indicated, the co -complainants submitted that the above enumeration 
included seven  new Article  XX defence s if compared with those in Indones ia's written submissions, 
namely: Article  XX(b) (for Measures  1, 2, 11, 12) and Article  XX(d) (for Measures  4, 10, 14).1517 
With reference to the principles of good faith and due process, New Zealand argued that it has had 
no meaningful opportunity to respond  to these new defences, both because of the lack of 
"elaboration " and because of the "extremely late stage in the proceedings " at which such defences 
were introduced, i.e. as a response to a question from the Panel after the second  substantive 
meeting .1518 The United States also observed that Indonesia raised several wholly new Article XX 
defences  in its response and that, in any event, the entirety of these defences consisted of a "bare 
reference to the relevant Article XX subparagraph in the chart presented " in response to the 
Panel's question or, at most, an "ambiguous word or two " in a previous submission .1519 
7.509.   We have carefully examined the various submissions filed by Indonesia and benchmarked 
them against the table above. The result of our examination coinci des with the diagnostic provided 
by the co -complainants: in this table, Indonesia introduces for the first time new defence s under 
Article  XX(b) with respect to Measures 1 and 11 (Limited application windows and validity periods) 
as well as Measures 2 and 12 (Periodic and fixed import terms). The same can be said of the 
defence s under Article  XX(d) with respect to Measures 4 (Harvest period requirement), 10  
(Prohibition of importation of certain beef and offal products, except in emergency circumstances  
and 14 (Use, sale and distribution of imported bovine meat and offal requirements). We also 
observe that, other than completing the table provided by the Panel, Indonesia did not offer any  
argumentation or evidence in support of the new defences raised in the  table.  
7.510.   As New Zealand points out, the Appellate Body in US – Gambling  emphasized that "the 
principles of good faith and due process oblige a responding party to articulate its defence  
promptly and clearly. This will enable the complaining party to unders tand that a specific defence  
has been made, 'be aware of its dimensions, and have an adequate opportunity to address and 
respond to it' ".1520 In the Appellate Body's view, "[w]hether a defence has been made at a 
sufficiently early stage of the panel proceedin gs to provide adequate notice to the opposing party 
will depend on the particular circumstances of a given dispute ".1521 In the present case, Indonesia 
did indeed introduce for the first time several new defences at a late stage of the proceedings, i.e. 
as a response to a question from the Panel after the second substantive meeting. According to the 
Panel's timetable, the sole opportunity for the co -complainants to respond to the new defences 
was within their comments on Indonesia's responses to the Panel's qu estions. These had to be 
filed wit hin one week from receiving Indonesia’s responses to the Panel's questions following the 
second substantive meeting. Although the co -complainants did provide comments, we do not 
consider that they  had adequate opportunity to address and respond to the several new defences 
presented. We recall that under the Panel’s timetable, Indonesia had seven weeks to file its first 
written submission following receipt of the co -complainants’ first written submissions and that both 
                                                
1517 New Zealand's comments on Indonesia's response to  Panel question No. 115; United States' 
comments on Indonesia's response to Panel question No. 115.  
1518 New Zealand 's comments on Indonesia 's response to Panel question No.  115 (referring to Appellate 
Body Report , US – Gambling , para. 272 ). 
1519 United States ' comments on Indonesia 's response to Panel question No.  115. 
1520 Appellate Body Report, US – Gambling , para. 272  (referring to Appellate Body Report, Chile – Price 
Band System , para. 164) . 
1521 Appellate Body Report, US – Gambling , para. 272 . WT/DS477/R • WT/DS478/R  
 
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  parties had four weeks to file rebuttal submissions following the first substantive meeting with the 
parties. In this light, we consider that one week is too short to prepare considered responses to 
the new defences, especially given the number of measures and defences concerned, one defence 
with respect to four measures and another with respect to three measures. Thus we are of the 
view that due process would not be served were we to consider these defences in our analysis.  
7.511.   In any event, even if we did not decl ine to consider these defences in our analysis, the 
practical result would be no different. We recall that, as explained by the Appellate Body in 
Korea  – Various Measures on Beef  and Thailand – Cigarettes  (Philippines) , in order to justify an 
otherwise WTO-inconsistent  measure, a  Member invoking a subparagraph of Article  XX as a 
defence bears the burden of establishing that the conditions prescribed therein are met.1522 In this 
instance, Indonesia failed to provide any argumentation or evidence in support of t he seven new 
defences. In our view, Indonesia failed to establish that the conditions prescribed by those 
defences were met and therefore failed to meet its burden of proof.  
7.512.   We therefore dismiss Indonesia's defences pursuant to Article  XX(b) with respect t o 
Measures  1, 2, 11 and 12 as well as Article  XX(d) with respect to Measures  4, 10 and 14 because 
considering them in our analysis would be inconsistent with due process requirements.  
7.3.3   Admissibility of Indonesia's unsubstantiated defences  
7.513.   In addition to th eir objections regarding the seven new defences, the co -complainants  also 
argued that, generally, Indonesia's argumentation concerning  all of its defences failed to meet the 
standard of Article XX of the GATT  1994 because it was  "patently undeveloped "1523 or 
unsubstantiated.1524 As for Indonesia's defences under Article  XX(b) with respect to Measures  3 
and 13 ( 80% realization requirement ) and Article  XX(a) with respect to Measure  15 (Domestic 
purchase requirement for beef ), the co -complainants decried the absence  of argumentation in 
support of these defences.  
7.514.   With respect to Measures  3 and 13, we observe that Indonesia did not explicitly invoke 
Article  XX(b) of the GATT  1994 as a defence.1525 Rather, it  indicated in its response to questions 
from the Panel after the  first substantive meeting that  it was  raising Article XX(d) as a defence, 
and that the realization requirements were also "necessary for the protection of human health ".1526 
This statement was not accompanied by any argumentation or attempt to establish the conditions 
prescribed by Article  XX(b)  of the GATT  1994. Nor did Indonesia offer any evidence in support  of 
this assertion. In fact, t he only mention of Article XX(b) in relation to these two measures appears 
within the table of defences provid ed by Indone sia in response to the question posed by  the Panel 
after the second substantive meeting.1527 As mentioned  in Section  7.3.2 above , the table was not 
accompanied by  supporting argumentation and/or evidence. As noted by the co -complainants, 
Indonesia’s defence under Article XX(b) merely consisted of a reference to the protection of human 
health and the enumeration of that subparagraph in a table.  
7.515.   As a preliminary matter, we are reluctant to allow Indon esia to seek to rely on 
Article XX(b) of the GATT  1994 to justify Measures 3 and 13. In our view, a respondent must 
assert its defences in a timely and clear manner so that the complainant can know what defences 
have been asserted and be in a position to develop its response to them. We also consider that, in 
order to justify an otherwise WTO-inconsistent  measure, a  Member invoking a subparagraph of 
Article  XX as a defence bears the burden of establishing that the conditions prescribed therein are 
met.1528 We do not consider that Indonesi a has done so with respect to its defences under 
Article  XX(b) for Measures  3 and 13. We therefore conclude that Indonesia failed to make a prima 
facie defence and, there by, failed to esta blish that Measures  3 and 13 are justified under 
Article  XX(b) of th e GATT  1994.  
                                                
1522 See Appellate Bod y Report s, Korea – Various Measures on Beef , para. 157; Thailand – Cigarettes  
(Philippines) , para. 179 . 
1523 New Zealand 's second  written submission, para. 286 ( referring to Appellate Body Report, Thailand – 
Cigarettes , para. 179 ). 
1524 United States ' comments o n Indonesia 's response to Panel question No.  115. 
1525 Indonesia's second written submission, paras. 217 -240 and 244, Indonesia's r esponse to Advance  
Panel question No. 16, para. 12 (horticultural products); first written submission, paras. 145 and 163; secon d 
written submission, paras. 207 and 244 (beef products).  
1526 Indonesia 's response to Panel questions Nos. 50 and  71. 
1527 Indonesia's response to Panel question No. 115.  
1528 See Appellate Body Report s, Korea – Various Measures on Beef , para. 157; Thailand – Cigarettes  
(Philippines) , para. 179 . WT/DS477/R • WT/DS478/R  
 
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  7.516.   Indonesia's defence under Article  XX(a) of the GATT  1994 with respect to Measure  15 is 
similarly flawed. As the United States points out1529, Indonesia’s defence of this measure under 
Article XX(a) of the GATT  1994 consists entirely of two "bare" references to  that subparagraph. 
Indonesia referred to Article XX(a) in its second written submission to seek to justify the domestic 
purchase requirement. This statement was not complemented  by any argumentation or attempt to 
establish the conditions pr escribed by Article  XX(a); nor  was any evidence offered supporting 
Indonesia's assertion . The second instance when Indonesia mentioned Article  XX(a) with respect to 
Measure  15 was in the table of defences provided by Indonesia set forth in Section  7.3.2 above  
which, as mentioned, was devoid of any supporting argumentation and/or evidence. As we said in 
connection with Indonesia’s purported defence under Article XX(b) with respect to Measures 3 and 
13, in order to justify an o therwise WTO -inconsistent measure, a  Member invoking a subparagraph 
of Article  XX as a defence bears the burden of establishing that the conditions prescribed therein 
are met.1530 We do not consider that Indonesia has done so with respect to its defence under  
Article  XX(a) for Measure  15. We therefore conclude that Indonesia failed to make a prima facie  
defence and, there by, failed to establish that Measure  15 is justified under Article XX(a) of the 
GATT  1994.  
7.517.   With respect to all other defences, we generally disagree with the co -complainants that 
they are "patently undeveloped "1531 or unsubstantiated1532 with the exception of Indonesia’s 
purported justification of Measure  18 (Sufficiency of domestic production to fulfil domestic 
demand)  under Article  XX(b) of the GA TT 1994. In our view, Indonesia failed to substantiate its 
defence under Article XX(b) with respect to Measure  18. In its first written submission1533, 
Indonesia referred to Article XX(b) in defence of Measure  18. Its statement was not complemented  
by any arg umentation or attempt to establish the conditions prescribed by Article  XX(b) or by 
evidence supporting Indonesia's assertion . The second instance when Indonesia mentioned 
Article  XX(b) with respect to Measure  18 was in the table of defences reproduced in 
Section  1.1.2.1534 As we observed above, the table was not accompanied by supporting 
argumentation and/or evidence. We recall once again that, in order to justify an otherwise WTO -
inconsistent measure, a  Member invoking a subparagraph of Article  XX as a defen ce bears the 
burden of establishing that the conditions prescribed therein are met.1535 We do not consider that 
Indonesia has done so with respect to its defence under Article  XX(b) for Measure  18. We 
therefore conclude that Indonesia failed to make a prima f acie defence and, there by, failed to 
establish that Measure  18 is justified under Article XX(b ) of the GATT  1994.  
7.518.   In the light of the foregoing, we proceed to examine the remaining defences presented by 
Indonesia pursuant to Article XX(a), (b) and (d) of t he GATT  1994.  
7.3.4   Order of analysis of Indonesia's defences under Article XX(a), (b) and (d) of the 
GATT  1994  
7.519.   In the light of the foregoing, the overview of defences raised by Indonesia under Article  XX 
of the GATT  1994 with respect to the claims pursuant to A rticle XI:I that we have not dismissed is  
as follows:  
MEASURE  
NO DESCRIPTION  ARTICLE XX DEFENCE                
subparagraph :  
(a) (b) (d) 
1 Limited application windows and validity periods    X 
2 Periodic and fixed import terms    X 
3 80% realization requirement    X 
                                                
1529 United States' comments on Indonesia's response to Panel question No. 115.  
1530See Appellate Body Reports, Korea – Various Measures on Beef , para. 157; Thailand – Cigarettes 
(Philippines) , para. 179.  
1531 New Zealand 's second w ritten submission, para. 286, referring to Appellate Body Report, Thailand – 
Cigarettes  (Philippines) , para. 179.  
1532 United States ' comments on Indonesia 's response to Panel question No.  115. 
1533 Indonesia's first written submission, para.  161. 
1534 Indonesia's response to Panel question No. 115.  
1535See Appellate Body Reports, Korea – Various Measures on Beef , para. 157; Thailand – Cigarettes 
(Philippines) , para. 179.  WT/DS477/R • WT/DS478/R  
 
- 179 - 
 
  MEASURE  
NO DESCRIPTION  ARTICLE XX DEFENCE                
subparagraph :  
(a) (b) (d) 
4 Harvest period requirement   X  
5 Storage ownership and capacity requirements  X X X 
6 Use, sale and distribution requirements for horticultural 
products X X X 
7 Reference prices for chillies  and fresh shallots for consumption   X  
8 Six-month harvest requirement   X  
9 Indonesia's import licensing regime for horticultural products 
as a whole . X X X 
10 Prohibition of importation of certain beef and o ffal products, 
except in emergency circumstances   X  
11 Limited application windows and validity periods    X 
12 Periodic and fixed import terms    X 
13 80% realization requirement    X 
14 Use, sale and distribution of imported bovine meat and offal 
requirements  X X  
15 Domestic purchase requirement for beef   X  
16 Beef reference price   X  
17 Import licensing regime for animals and animal products as a 
whole  X X X 
18 Sufficiency of domestic production to fulfil domestic demand     
 
7.520.   We will proceed to e xamine the defences raised by Indonesia following the order of our 
findings of inconsistency under Article XI:1 of the GATT  1994, starting with Measure  1.  
7.3.5   Whether Measure  1 (Application windows and validity periods) is justified under 
Article  XX(d) of the  GATT  1994  
7.3.5.1   Arguments of the Parties  
7.3.5.1.1   Whether Measure  1 is provisionally justified under subparagraph  (d) of 
Article  XX of the GATT  1994  
7.3.5.1.1.1   Indonesia  
7.521.   Indonesia contends that Members may derogate from the substantive obligations of the 
GATT 1 994 in order to purs ue certain legitimate public policy objectives, including customs 
enforcement.1536 Indonesia further argues that the Panel should consider its arguments, and the 
application of its import licensing regime, in the present case while taking account of its devel oping 
country status1537 and the unique circumstances under which the import licensing regime 
contributes to customs enforcement, including with regard to limited resources ( i.e. customs and 
                                                
1536 Indonesia 's secon d written submission, para. 127  (referring to Appellate Body Report, Thailand —
Cigarettes  (Philippines) , paras. 176 -177). 
1537 Indonesia 's second written submission, para. 127.   WT/DS477/R • WT/DS478/R  
 
- 180 - 
 
  quarantine officials who maintain continuous control over numerous p orts of entry) and 
geographical conditions.1538 
7.522.   Indonesia understands that the expression "laws and regulations " in subparagraph  (d) 
encompasses the rules adopted by a WTO Member's legislative or executive branches of 
government1539, particularly as they refer t o the rules that are part of the domestic legal 
system.1540 On this basis, Indonesia contends that its import licensing regime is designed to secure 
compliance with those laws and regulations.1541 Indonesia observes that its Customs Law defines 
"customs " as "everything related to monitoring over flow of goods in or out of customs area and 
collection of import duty and export duty "1542; and that the Consideration of the Customs Law also 
stipulates that its implementation is intended to guarantee greater legal certain ty, support the 
smooth flow of goods, and increase effective monitoring of the flow of goods into or out of 
Indonesian customs areas.1543 Hence, Indonesia asserts that the challenged measures are not 
stand -alone regulations: they are expressly part of Indones ia's broader customs regime and were 
implemented to enhance effective customs controls.1544 
7.523.   Indonesia submits that customs enforcement in itself is not WTO-inconsistent  and that it is 
well established that a responding Member's law must be presumed to be GATT /WTO -
consistent.1545 Since the complainants have not challenged its customs laws and regulations in a 
general manner, having only made claims in respect to certain specific aspects of such laws as 
they relate to horticultural and animal products, Indonesia co ncludes that its customs laws and 
procedures, including those intended to secure customs enforcement, are presumed to be 
consistent with Indonesia's WTO obligations.1546 Moreover, Indonesia argues that, in order to meet 
its burden of proof, it is not required  to demonstrate that each and every provision as well as the 
implementing regulations is WTO -consistent.1547 Consequently, Indonesia deems its laws and 
regulations on customs enforcement consistent with the provisions of the GATT 1994 .1548 
7.524.   Indonesia argues that the application windows and validity periods are a necessary 
component of its customs regime. Indonesia sustains that, as a developing country, it has limited 
resources to allocate to the processing of import licence applications. Such requirements 
contrib ute to Indonesia's ability to allocate resources effectively among its many ports, by 
                                                
1538 Indonesia 's second written submission, para. 133. Indonesia submits that it has hundreds of ports 
of entry, and it has outfitted 87 international ports, 248 l ocal river and sea ports, and 29 airports as ports of 
entry; Indonesia 's responses to Panel question No.  45. 
1539 Indonesia 's second written submission, paras. 129 -135 (referring to Appellate Body Report, Mexico– 
Taxes on Soft Drinks , para. 69 ). 
1540 Appellate B ody Report, Mexico – Taxes on Soft Drinks , para. 69.  
1541 Indonesia 's response to Panel question No. 71; oral statement at the second substantive meeting, 
para. 34 -35, referring to Law No. 10/1995 concerning Customs, which was later amended by Law No. 17/2006  
("Customs Law ", Exhibit IDN -66), and Ministry of Finance Regulation No. 139/2007 on the Customs Verification 
for Imported Products and its amendment  MOA 113/2013 concerning Animal Quarantine for Beef,  as well as 
other relevant regulations concerning quara ntine and food safety . These are explicitly defined by Indonesia's 
cross-reference to its response to Panel question No. 20. In this regard, Indonesia states: " Please also note 
that MOT 71/2015 refers to other laws and regulations concerning Food Safety, s uch as:  
a.Law 16/1992 concerning Animal, Fish and Plant Quarantine  
b.Government Regulation 69/1999 concerning Labeling and Food Advertising  
c.Government Regulation 14/2002 concerning Plant Quarantine  
d.Government Regulation 28/2004 concerning Food Safety, Quality and Nutrition  
e.MOA 88/2011 concerning Food Safety Control over the Import and Export of Fresh Food of Plant 
Origin  
f.MOT 48/2015 concerning General Provisions in Import Sector  
g.MOT 24/2010 concerning Inclusion of Food Grade Logo and Recycling Co de of Plastic Food Packaging  
h.MOA Regulation 42/2012 concerning Plant Quarantine Measures for Entry of Fresh Fruits and 
Vegetables into the Republic of Indonesia Territory  
i.MOT 46/2014 concerning General Provisions of Verification or Technical Surveillan ce in Trading Sector  
j.MOA 43/2012 concerning Plant Quarantine Measures for Importation of Fresh Bulbs Vegetables into 
the Republic of Indonesia Territory ." 
1542 Article 1(1) of Law 17/2006 , Exhibit IDN -66. 
1543 Indonesia 's oral statement at the second substanti ve meeting, para. 36, referring to Consideration 
(a) of Law 17/2006 , Exhibit IDN -66. 
1544 Indonesia 's oral statement at the second substantive meeting, para. 37.  
1545 Indonesia 's second written submission, paras. 136 -137; Panel Report, Colombia – Ports of Entry , 
para. 7.527;  Appellate Body Report, US – Carbon Steel , para. 157; Appellate Body Report, Dominican Republic 
– Import and Sale of Cigarettes , para. 111; and Appellate Body Report, US – Gambling , para. 138.  
1546 Indonesia 's second written submission, paras. 13 6. 
1547 Indonesia refers to the Panel Report, Colombia – Ports of Entry , para. 7.529.  
1548 Indonesia 's second written submission, paras. 136.  WT/DS477/R • WT/DS478/R  
 
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  providing advance notice of expected import volumes in a timely fashion. Indonesia further states 
that it cannot effectively manage unspecified import volumes on a rollin g basis.1549 In Indonesia's 
view, the administrative burden placed on importers by the application windows and validity 
periods was carefully balanced against the reality of Indonesia's capacity to administer and enforce 
its import licensing regime.1550 
7.525.   Indonesi a submits that measures that are "necessary " are understood not to be limited to 
those "indispensable " or "of absolute necessity " or "inevitable ".1551 In this light, Indonesia 
contends that its import licensing regime effectively contributes to the monitoring  of the trade 
flows through customs: it provides customs officials with information needed for the purpose of, 
inter alia , monitoring trade inflows; allocating the number of officials in accordance with 
anticipated import volumes; curbing tax evasion, smug gling and import data distortions1552; and 
easier and more reliable determination of product origin and quality through additional labelling 
requirements, including trademarks, Halal and food safety.1553 Indonesia thus asserts that 
establishing and upholding its  trade monitoring system by implementing an import licensing 
regime is necessary. Indonesia also observes that the relative importance of the common interests 
or values that may be addressed within the scope of Article XX does not adhere to any hierarchica l 
ranking or prioritization, and that an assessment of their importance must take into account the 
evidence presented as well as the prevailing circumstances faced by the respondent.1554 
7.526.   Elaborating on the necessity element with respect to the application win dows and validity 
periods, Indonesia contends that its import licensing regime serves the widely shared  purpose of 
obtaining data for statistical purposes. In this light, Indonesia submits that th is Measure was 
incorporated in the regime in order to improv e the accuracy of statistics on perishable products. 
According to Indonesia, data would be more accurate if collected closer to the import date.1555 
7.3.5.1.1.2   New Zealand  
7.527.   New Zealand contends that Indonesia's arguments do n ot meet the standard of 
Article  XX(d) of the G ATT 1994.1556 New Zealand submits that the continued lack of specificity in 
Indonesia's Article XX(d)  defence in its second written submission makes it challenging for the co -
complainants to respond.1557 According to New Zealand, Indonesia cannot simply "deem " its laws 
and regulations relating to customs enforcement consistent with the provisions of the 
GATT  1994.1558 Hence, a Member invoking Article XX(d) has the burden of demonstrating that its 
requirements are met, including that the "laws and regulations " invoke d are "not inconsistent " with 
the GATT 19941559, and precisely identifying the "laws or regulations " referred to in support of 
such defence.1560 In particular, New Zealand submits  that simply naming three general customs 
instruments and ten other regulations wit hout specifying what aspects of these legal instruments 
are relevant to the Panel's analysis does not satisfy Indonesia's burden to prove Article XX(d) 
elements.1561 In this respect, New Zealand argues that the legal instruments and specific 
provisions that a re relevant to the laws relating to customs, quarantine and food safety 
enumerated by Indonesia to justify its measures have not been identified or  provided to the Panel 
                                                
1549 Indonesia 's Response to Panel question No.  14. 
1550 Indonesia 's first written submission, para. 136; Indonesia 's second w ritten submission, para. 207.  
1551 Indonesia 's second written submission, paras. 138 -145. In support of this view, Indonesia refers to 
Appellate Body Report, Korea – Various Measures on Beef , para. 161.  
1552 Indonesia 's second written submission, paras. 138 and 142. In relation to the last example, 
Indonesia relies on Panel Report Colombia – Ports of Entry , para s. 7.553 -7.562.  
1553 Indonesia 's second written submission, para. 144.  
1554 Indonesia 's second written submission, para. 1 43. In support of this view, Indonesia  refers to Panel 
Report, Colombia – Ports of Entry , para. 7.563.  
1555 Indonesia 's second written submission, para. 242.  
1556 New Zealand 's second written submission, para. 184.  
1557 New Zealand 's opening statement at the second substantive meeting, paras. 41 -42 (referring to 
Indonesia 's second written submission, para. 130 ); New Zealand 's second written submission, para. 52 ). 
1558 New Zealand 's opening statement at the second substantive meeting, para. 47  (referring to 
Indonesia 's second written submission, para. 137 ). 
1559 New Zealand 's opening statement at the second substantive meeting, para. 47 (referring to  
Appellate Body Report, Korea – Various Measures on Beef , para. 157 ). 
1560 New Zealand 's opening statement at the second substantive meeting, para. 47.  
1561 New Zealand r efers to the Appellate Body Report, US – Wool Shirts and Blouses , p. 16 ; Indonesia 's 
second written submission, para.  130; additional responses to the Panel questions  No. 20, para. 1 2 and 71, 
para. 46.  New Zealand 's second written submission, para. 185.  WT/DS477/R • WT/DS478/R  
 
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  and the p arties as exhibits.1562 Hence, the fact that some of Indonesia's agriculture and  trade 
regulations refer to the Customs Law1563 is insufficient to demonstrate that each specific trade -
restrictive measure before the Panel is designed to secure compliance with the Customs Law, let 
alone that the measures are necessary to achieve that objec tive.1564 New Zealand  finds it 
problematic that Indonesia does not place such laws on record as Exhibits.1565 
7.528.   New Zealand contends that, even if the first element of Article XX(d) were satisfied, 
Indonesia has not explained why the measures are "necessary to sec ure compliance " with such 
laws or regulations. New Zealand considers that "it is difficult to make detailed arguments to 
demonstrate the 'necessity' of a measure under Article XX(d) in the absence of a clear 
identification of the laws or regulations with w hich that measure is purportedly necessary to secure 
compliance ".1566 Hence, it is difficult to see how the application windows and validity periods would 
permit Indonesia to allocate resources for customs enforcement, especially since the two regimes 
appear to be completely independent regimes operated by separate entities. Moreover, New 
Zealand is of the view that this regime will only provide an indication of trade volumes over the 
entire 6 -month period, without greater specificity relating to volumes in ea ch anticipated 
shipment. According to New Zealand, Indonesia should have shown what contribution the 
measures make to the objective of customs enforcement, and why they are necessary to secure 
compliance with those laws, weighed against their trade restric tiveness.1567 In New Zealand's view, 
Indonesia's assertion that its import licensing regime "would indeed serve to 'secure compliance' 
with the customs enforcement "1568 is vague and unclear: it does not explain what element of 
customs enforcement is involved, pa rticularly given the wide -ranging nature of the Customs 
Law1569 and Indonesia's wide definition of "customs ".1570 From New Zealand's standpoint1571, the 
measures at issue are unrelated to the collection of import and export duties and do not appear to 
have been ado pted to serve the "purpose of attaining data for statistical purposes "1572 or the 
"rightful oversight of " the flow of goods.1573 Even if the measures were aimed at such objectives, 
New Zealand argues that there are less trade -restrictive mechanisms by which impo rt data could 
be gathered for statistical purposes, many of which already exist independently.1574 
7.529.   New Zealand further submits that Indonesia has failed to demonstrate that customs 
enforcement is the objective of its limited application windows and validity p eriods for RIPHs and 
import approvals; to identify the provisions of its customs enforcement laws and regulations, not 
inconsistent with the GATT 1994, with which the measure is designed to secure compliance; and to 
demonstrate that such laws are "not inco nsistent with the provisions of [the GATT 1994] ", as 
required by Article XX(d) if the GATT 1994. In New Zealand's view, WTO jurisprudence confirms 
that a panel is not bound by Indonesia’s assertion of the objective of its measures, but should 
rather look a t all relevant evidence, including the text, structure, and legislative history of the 
measure at issue.1575 In that sense, mere assertions concerning the purpose of a challenged 
measure are not sufficient to establish that a measure is designed to promote an  objective 
protected by Article XX of the GATT 1994. In this instance, New Zealand holds that, nothing in the 
sources referred to by Indonesia suggests a connection between the measure and customs 
enforcement. New Zealand cites Indonesia's own notification s to the WTO Import Licensing 
                                                
1562 New Zealand 's opening statement at the second substantive meeting, para. 42 (referring to the list 
of laws relating to customs, quarantine and food safety mentioned in Indonesia 's additional responses to the 
Panel 's questions after the first substantive me eting, para. 46 ).  
1563 Law 10/1995 Concerning Customs, as amended by Law No 17/2006; Indonesia 's second written 
submission, para. 134; Exhibits IDN -65 and IDN -66. 
1564 New Zealand 's opening statement at the second substantive meeting, para. 43.  
1565 New Zealand 's second written submission, para. 185  (referring to Panel Report, Colombia – Ports of 
Entry , paras. 7.516 -7.525 ). 
1566 New Zealand 's second written submission, para. 188  (referring to Appellate Body Report, Thailand – 
Cigarettes , fn. 272 ). 
1567 New Zealand 's open ing statement at the second substantive meeting, para. 47.  
1568 Indonesia 's second written submission, para. 135  
1569 New Zealand 's second written submission, para. 56.  
1570 New Zealand 's opening statement at the second substantive meeting, paras. 43 -44 (referring to 
Indonesia 's second written submission, para. 131,  in turn,  referring to Article 1(1) of Law 17/2006 (Exhibit 
IDN-66), covering "everything related to monitoring over flow of goods in or out of customs area and collection 
of import duty and export duty "). 
1571 New Zealand 's opening statement at the second substantive meeting, para. 45.  
1572 Indonesia 's second written submission, para. 242.  
1573 Indonesia 's second written submission, para. 1 32. 
1574 New Zealand 's opening statement at the second substantive meeting, pa ra. 46; New Zealand 's 
second written submission, para. 105.  
1575 New Zealand 's second written submission, para. 186  (referring to Appellate Body Report, EC – Seal 
Products , para. 5.144 ). WT/DS477/R • WT/DS478/R  
 
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  Committee, as proof that Indonesia did not list "customs enforcement " as one of the objectives of 
the regime.1576 
7.530.   New Zealand notes that, in its second written submission, Indonesia claims for the first 
time that its measures are  "mandated because the products at issue are products that spoil easily. 
As such, data would be more accurate if it is closer to the import date ".1577 New Zealand 
maintains, however, that the measures at issue require importers to provide information up to si x 
months in advance of importation.1578 New Zealand suggests that the removal of limited 
application windows and validity periods would actually enhance data accuracy because 
information would be obtained closer to the time of importation. New Zealand also ob serves that, 
for the first time in its second written submission, Indonesia acknowledges that its limited 
application windows apply only to certain animal products (namely bovine meat, offal and carcass) 
and only certain fresh horticultural products.1579 According to New Zealand, Indonesia's 
inconsistent application of this measure shows that avoiding food spoilage or data collection is not 
its true objective.1580 
7.531.   New Zealand reiterates that the basis and rationale for the import licensing restrictions on 
horticu ltural products is found in the legislative provisions based on sufficiency of domestic 
production. According to New Zealand, the specific import licensing restrictions were promulgated 
in contemplation of these laws, and thus, their purpose is contrary to  that alleged by Indonesia.1581 
7.532.   Accordingly, weighing the lack of contribution to the stated objective against its significant 
trade -restrictiveness1582, New Zealand submits that Indonesia has failed to discharge its burden to 
establish that the measure at issue  is "necessary " to secure compliance, and to demonstrate the 
existence of "a genuine relationship of ends and means between the objective pursued and the 
measure at issue ".1583 Consequently, New Zealand does not consider that it is necessary to 
elaborate on a  less trade -restrictive alternative measure. New Zealand suggests, however, two 
reasonably available and less t rade-restrictive alternatives: (i) removing  the import licensing 
regime for horticultural products : New Zealand notes that a large number of hort icultural products 
are not subject to import licensing and Indonesia has given no reason why this approach could not 
be applied to all imported horticultu ral products1584; (ii) operating a truly automatic import 
licensing regime, in which applications could b e submitted on any working day prior to customs 
clearance .1585 
7.3.5.1.1.3   United States  
7.533.   According to the United States, Indonesia has not satisfied the elements of the test under 
paragraph  (d) of Article XX.1586 In analyzing whether the challenged measure was designed to 
secure compliance with a WTO -consistent law or regulation, the United States notes that, after  the 
first Panel heari ng1587, Indonesia presented a non -exhaust ive list of 13 legal instruments covering 
numerous distinct topics including customs generally, import quarantine, labelling, food safety, 
recycling, and verification or technical surveillance in the trading sector.1588 For the United  States, 
apart from the Customs Law,  Indonesia fails to provide for the record the text of the 12 other legal 
instruments. For t he United States, the mere listing of legal instruments and cursory references to 
                                                
1576 New Zealand 's second written submission, para. 186  (referring to G/LIC /N/2/IDN/14 , Exhibit US  54, 
stating no administrative purpose for MOT 16/2013) . 
1577 Indonesia 's second written submission, para. 242.  
1578 New Zealand 's opening statement at the second substantive meeting, para. 62.  
1579 Indonesia 's second written submission, para s. 57 and 58.  
1580 New Zealand 's opening statement at the second substantive meeting, para. 63.  
1581 New Zealand 's second written submission, para. 187  (referring to its f irst written submission, 
paras.  70-71). 
1582 As described in New Zealand 's first written submi ssion,paras. 214-217. 
1583 New Zealand 's second written submission, para. 190  (referring to  Appellate Body Report, EC – Seal 
Products , para. 5.180, in turn  referring to  Appellate Body Report, Brazil – Retreaded Tyres , paras 145 -157). 
1584 New Zealand 's second wri tten submission, para. 191  (referring to  its first written submission, para. 
73, referring to Attachment II, MOA 86/2013 (Exhibit JE -15) and Appendix I, MOT 16/2013  (Exhibit JE -8)). 
1585 New Zealand 's second written submission, para. 192.  
1586 United States seco nd written submission, para. 123  (referring to Appellate Body Report, Korea – 
Beef, para. 157 ); oral statement at the second substantive meeting, paras. 54 -66. 
1587 United States ' second written submission, paras. 125 -129 (referring to Indonesia 's first writt en 
submission, pa ras. 136, 140,142 -145, 149, 160 and  163). 
1588 United States ' second written submission, para. 126  (referring to Indonesia 's secon d written 
submission, para. 130; responses to Panel questions No.  20 and 71 ); oral statement at the second subst antive 
meeting, para.56 . WT/DS477/R • WT/DS478/R  
 
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  general provisions fall short of identifying the relevant law or regulation the measures at issue 
seek to enforce.1589 The United States holds that no panels or the Appellate Bo dy have found that 
a WTO -consistent law or regulation was identified based solely on the type of general references 
that Indonesia has made.1590 The United States thus considers that Indonesia has not articulated 
any explanation of how its import licensing re gimes and measures contribute to securing 
compliance with any requirement of a customs or food safety law or regulation.1591 Merely 
asserting that the import licensing r egimes "effectively contributed to the monitoring of the flow of 
goods through Indonesian customs " is not sufficient.1592 
7.534.   For the United  States, the only evidence put forward is the Customs Law1593, referenced in 
three import licensing regulations enacted after the Panel was established.1594 Recalling that 
previous panels have looked to evidence surroun ding the enactment and operation of a challenged 
measure, the United States considers that Indonesia has tabled almost no evidence showing that 
the challenged measures were taken "to secure compliance " with the Customs Law.1595 Indonesia 
does not explain how these measures would establish that the import licensing regimes as of the 
date of panel establishment were taken to secure compliance with the Customs Law.1596 Also, 
among the instruments cited by Indonesia, MOA 58/2015 does not actually include even this ba re 
reference among the 20 laws that it "notes ", and does not contain the word "customs " at all.1597 
No other laws were submitted for the record, and Indonesia did not specify what aspects of its 
laws were relevant to the Panel’s analysis, or how the challenge d measures were necessary to 
secure compliance with these laws.1598  
7.535.   As Indonesia points to nothing else in the text of any of the instruments suggesting any 
connection with customs enforcement1599, the United States observes that  previous panels have 
confirmed that general references to "customs enforcement ", "health laws, " and entire pieces of 
legislation do not satisfy the requirements of Article XX(d).1600 Arguing that the term "to secure 
                                                
1589 United States ' oral statement at the second substantive meeting, paras. 56 -58 (referring to 
Appellate Body Report,  Thailand – Cigarettes (Philippines) , para. 179, fn. 271; Panel Report,  Colombia – Ports 
of Entry , paras. 7.516 -517, 7.521, where it was found that general references to entire pieces of complex 
legislation are not sufficient to identify a "law or regulation " for purposes of Article XX(d) ). 
1590 United States ' oral statement at the second substantive meeting, para. 60  (referring to Panel 
Report, Colombia – Textiles , paras. 7.505 -508; Appellate Body Report , Thailand – Cigarettes (Philippines) , 
para. 179,fn 271; Panel Reports,  Colombia – Ports of Entry , para. 7.523; US – Shrimp  (Thailand), paras. 
7.175 -179; Dominican Republi c – Import and Sale of Cigarettes , para. 7.210;  US – Gambling , para. 6.550;  
Canada – Wheat Exports and Grain Imports , para. 6.221;  Argentina – Hides and Leather , para. 11.292;  Korea 
– Various Measures on Beef , para. 655.   
1591 United States ' oral statement at  the second substantive meeting, para. 65.  
1592 United States ' oral statement at the second substantive meeting, para. 65  (referring to Indonesia 's 
second written submission, paras. 142 ). 
1593 Exhibits IDN -65 and IDN -66. 
1594 United States ' oral statement at the se cond substantive meeting, para. 62  (referring to Indonesia 's 
second written submission, para. 134 ). 
1595 United States ' oral statement at the second substantive meeting, para. 61  (referring to Panel 
Report s, Korea – Various Measures on Beef , paras. 657 -658; Colombia – Ports of Entry , paras.  7.539 -7.542);  
China – Auto Parts , paras. 7.299, 7.310, 7.312, 7.306 .7.308, 7.345 ). 
1596 United States ' oral statement at the second substantive meeting, para. 62  (referring to Appellate 
Body Report,  EC – Selected Customs  Matte rs, paras. 188 -189, the United States points out that these 
instruments were enacted after the Panel was established and thus are not part of the measures within the 
Panel 's terms of reference. They would only be relevant to the extent they bear on the leg al situation as it 
existed as of the date of panel establishment.  
1597 United States ' oral statement at the second substantive meeting, paras. 63 -64 (referring to Exhibit 
IDN-40). 
1598 United States ' second written submission, paras. 127 -128 (referring to Appell ate Body Report, 
Mexico – Taxes on Soft Drinks , para. 69, where the term "laws and regulations",  as used in Article XX(d), was 
found to refer to "rules that form part of the domestic legal system of a WTO Member "; Appellate Body Report , 
Thailand – Cigarett es (Philippines) , para. 179 ). 
1599 United States ' oral statement at the second substantive meeting, para. 63.  
1600 United State s' second written submission, para. 129  (referring to Panel Report,  Colombia – Ports of 
Entry , paras. 7.516 -517 and 7.521 ), where Colom bia's general references to "laws and regulations relating to 
customs enforcement " were found insufficient for purposes of the first element Article XX(d); and where only 
after Colombia cited relevant legal provisions and submitted the text into evidence d id the panel consider that 
it had adequately identified the relevant laws and regulations; Panel Report , Colombia – Textiles , paras. 7.505. 
and 7.507, where Colombia referred generally to "legislation against money laundering, " and named two 
articles of it s Criminal Code as "laws or regulations " under Article XX(d), and where the panel found that 
Colombia had not identified sufficiently one of the articles, explai ning: "Colombia has not reproduced its text in 
any of its submissions or statements, nor has it  presented any exhibit containing the text. In other words, the 
content of [the article] is not on the record. " The United States n otes that t hese findings are on appeal and 
have not been adopted.  WT/DS477/R • WT/DS478/R  
 
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  compliance " also informs the interpretation of "laws and regulations ", which must be "rules" with 
which compliance can be "secure[d] ", the United States contends that the two provisions of the 
Customs Law ( i.e. the definition of "customs " and a statement in the Preamble) that are 
specifically identified by Indonesia, do not set out any rule or obligation with which compliance can 
be secured.1601 The United States asserts that it is not sufficient for a challenged measure merely 
to secure compliance with the objectives of WTO -consistent laws and regulations. "To secure 
compliance " "means ‘to enforce obligations under laws and obligations’ and not ‘to ensure the 
attainment of the objectives of the laws and regulations.’ "1602 Hence, the United States considers 
that a definition or a preamble that does not contain a relevant obligation is n ot sufficient, because 
it is not a "rule" with which compliance is capable of being secured.1603 Also, submitting the entire 
text of the Customs Law is insufficient to meet the identification element given the variety of 
topics addressed therein.1604  
7.536.   The United  States observes that the lack of connection to customs enforcement is 
confirmed in a number of other ways. First, none of the regulations establishing the various 
restrictions mentions customs enforcement as one of its purposes.1605 Second, the import licens ing 
regimes are administered by the Ministries of Trade and Agriculture and are distinct from 
Indonesia’s customs regime, which is administered by t he Finance Ministry. The United  States 
notes that the relevant regulation states explicitly that the pre -shipment verification of 
horticultural products "does not reduce the authority of the Directorate General of Customs and 
Excise of the Finance Ministry for conducting customs inspections. "1606 Third, when notifying its 
import regulations for horticultural produc ts and animals and animal products to the WTO Import 
Licensing Committee, Indonesia did not list customs enforcement as a purpose of either 
regime.1607 Hence, while Indonesia asserts that the application windows and validity periods are 
related to customs enf orcement, it points to no evidence that this is, in fact, the case.1608 Mere 
assertions concerning the purpose of the challenged measure are insufficient to establish that a 
measure is maintained under an Article XX subparagraph .1609 Finally, Indonesia has made no 
assertions concerning the WTO -consistency of the relevant laws and regulations.1610 In this light, 
the United States contends that  the Panel should rather look to the text, structure, and history of 
the challenged measure to determine whether the stated ob jective is, in fact, the objective of the 
                                                
1601 United States ' oral statement at the second substantive m eeting, paras. 56 and 59 (referring to 
Appellate Body Report,  Mexico – Taxes on Soft Drinks  , paras. 69 and 72 ).  
1602 United States ' oral statement at the second substantive meeting, para. 59  (referring to GATT Panel 
Report, EEC –Parts and Components , para. 5.17; Panel Reports, Korea – Various Measures on Beef , para. 658;  
Colombia – Ports of Entry , para. 5.17;  Canada – Wheat Exports and Grain Imports , para. 6.248; EC – 
Trademarks and Geographical Indications , para. 7.447; Canada – Periodicals , para. 5.9; Colombia – Textiles , 
para. 7.482 ). 
1603 United States ' oral statement at the second substantive meeting, para. 59.  
1604 United States ' oral statement at the second substantive meeting, paras. 57 -58. According to the 
United States, the Customs Law contains many obli gations and addresses topics as wide -ranging as export 
declarations (art. 10), transportation of goods within Indonesia (art. 11), tariffs and import duties (arts. 12 -
17), anti –dumping and countervailing duties (arts. 18 -23), storage of products under cust oms supervision 
(arts. 42 -48), IPR infringement (arts. 54 -64), and the customs appeal process (arts. 93 -101).  
1605 United States ' second  written submission, para. 132 ( referring to MOT 16/2013, as amended by 
MOT 47/2013, pp. 1 ( Exhibit JE-10) (stating the pur pose as "to protect consumers, promote business certainty 
and transparency, and simplify the licensing process and the administration of imports "); MOA  86/2013, pp. 1 
(Exhibit JE-15) (stating the purpose as "to simplify the import process . . . and provid[ e] certainty in servicing 
Import Recommendation[s] "); MOT 46/2013, as amended, pp. 1, Exhibit JE-21) (stating the purpose as "to 
improve consumer protection, preserve natural resources, provide business certainty, transparency, and 
simplify the licensing p rocess and the administration of imports "); MOA 139/2014, as amended, pp. 1, Exhibit 
JE-28) (stating the purpose as "to optimize the importation services of carcasses, meat, and/or their processed 
products "). 
1606 United States ' second wri tten submission, par a. 130 -134 ( referring to Article 23 MOT 16/2013, as 
amended by MOT 47/2013, Exhibit JE -10). 
1607 United States second written submission, para. 132; G/LIC/N/2/IDN/14, Exhibit US A-54 (specifying 
no administrative purpose for MOT 16/2013); and G/LIC/N/2/IDN/19,  Exhibit US A-55 (specifying the 
administrative purpose of MOT 46/2013 as "to establish healthy trade, conducive business environment and 
orderly import and administration "). 
1608 United States second written submissio n, para. 131 ( referring to Indonesia 's first written 
submissio n, paras. 136, 140,142 -145, 149 and 163). 
1609 United States ' second written communication, para. 131, referring to Appellate Body Report,  EC – 
Seal Products , para. 5.144 (stating that panels "should take into account the Member 's articula tion of the 
objective or the objectives it pursues through its measures, but it is not bound by that Member 's 
characterization of such objective(s) ")). 
1610 United States second written submission, para. 129.  WT/DS477/R • WT/DS478/R  
 
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  measure.1611 According to the United States, it is clear from the text, structure, and history of the 
import licensing regulations and the framework legislation pursuant to which both import licensing 
regimes were est ablished that their actual purpose is to protect domestic producers from 
competition from imports:1612 (i) The Horticulture Law states that the Indonesian government 
must maintain the balance of horticultural supply and demand by "controlling import and expor t" 
of horticultural products, and must "give priority to the selling of local horticultural products "1613; 
(ii) The Animal Law states that importation of animals and animal products should be done only "if 
local production and supply of animals or cattle and animal products is not sufficient to fulfill 
consumption needs of the society "1614; (iii) The import licensing regulations were promulgated 
pursuant to these statutes1615, and Indonesian officials have confirmed that the purpose of the 
regimes is to restrict foo d imports in order to achieve self -sufficiency in food production.1616 
7.537.   The United States argues that, even if the Panel found that any of the challenged 
measures were designed to secure compliance with some WTO -consistent law or regulation, 
Indonesia would ha ve to show that the measure was "necessary " to the achievement of that 
objective.1617 The United States argues that it is unclear that the application windows and validity 
periods would make any contribution to Indonesia’s ability to allocate customs resource s among its 
ports. According to Indonesia’s own argument, importers do not in practice limit their imports to 
the particular ports specified on their import approvals.1618 Therefore, due to the operation of the 
application windows and validity periods, Indone sian officials would only know at the beginning of 
the period the maximum permitted imports for that period and the ports where such imports could 
possibly be brought in. The United States contends that, based on this information, it is unclear 
how resourc es could be allocated among ports. In its view, a less trade -restrictive way to achieve 
the objective of providing timely advance notice of expected import volumes would be a truly 
automatic import licensing regime, where importers could apply on any day p rior to the customs 
clearance of goods and could receive permission to import goods of the type and quantity 
requested through the port of entry specified. According to the United States, such a regime could 
be administered in the same way as the current r egime, would be "reasonably available "1619 to 
Indonesia, and would provide more accurate and timely notice of the products importers plan to 
bring in, and, therefore, would better assist Indonesia in allocating its resources.  
7.538.   The United States fails to see how Indonesia’s argument, i.e. that it has limited resources 
to devote to processing import licensing applications, is related to customs enforcement.1620 The 
United States notes that import licensing applications are processed by the Ministry of Agriculture 
and the Ministry of Trade, not the Directorate General of Customs and Excise in the Finance 
Ministry.1621 Thus, even if the application windows and validity periods conserve resources for 
officials processing the import licensing applications (and Indonesia ha s not explained how that 
would be the case), that would make no contribution to customs enforcement. Moreover, the 
United States argues that application windows and validity period requirements are very trade -
restrictive, effectively halting US products’ a ccess to the Indonesian market for several weeks out 
of each import period and several months out of the year. According to the United States, a 
measure would have to make a significant contribution to its covered objective to justify this level 
of trade -restrictiveness.1622 Thus, the United States contends that, even putting aside Indonesia’s 
failure to identify a relevant law or regulation or demonstrate that the application windows and 
validity periods relate to customs enforcement in any way, the applicati on window and validity 
                                                
1611 United States ' second  written submission, para. 131 (referring to Appellate Body Report,  EC – Seal 
Products , para. 5.144 ). 
1612 United States ' second written submission, para. 133.  
1613 Articles 90 and 92(1), Horticulture Law, Exhibit JE –1. 
1614 Article 36(4), Animal Law ( Exhibit JE –4). 
1615 Preamble (4) of M OA 86/ 2013, Exhibit JE -15, and Preamble (5) of MOT 16/2013, as amended by 
MOT 47/2013 (referring to the Horticulture Law); Preamble (b), (5) of MOA 139/2014, Exhibit JE -28, and 
Preamble (9) of MOT 46/2013, as amended, Exhibit JE -21 (referring to the Animal Law).  
1616 United States'  second written submission, para. 1 33 (referring to paras.  16, 84 -85 of its first written 
submission and Exhibits US A-7, US A-11, US A-13, and USA-14). 
1617 United States ' second written submission, para. 135.  
1618 United States ' second written su bmission, para. 137  (referring to Indonesia 's first written 
submission, para. 139 ). 
1619 United States ' second written submission, para. 138, referring to  Appellate Body Reports,  Brazil – 
Retreaded Tyres , para. 156; US – Gambling , para. 308.  
1620 United States ' second written submission, para. 139.  
1621 United States ' first written submission, paras. 37 -44, 100 -103. 
1622 United States ' second written submission, para. 140.  WT/DS477/R • WT/DS478/R  
 
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  period requirements could not be justified as meeting the "necessary " standard with respect to this 
objective.1623 
7.3.5.1.2   Whether Measure  1 is applied in a manner consistent with the chapeau  of 
Article XX  
7.3.5.1.2.1   Indonesia  
7.539.   Indonesia asserts that its m easures are applied in a manner consistent with the chapeau of 
Article XX of the GATT  1994. In this regard, Indonesia argues that the chapeau of Article XX of the 
GATT 1994 expressly addresses the manner in which a particular measure is applied1624; and that 
it reflects the need to maintain a balance between a Member's right to invoke an exception of 
Article XX and the substantive rights of other Members under the GATT 1994.1625 In this light, 
Indonesia submits first that its import licensing regime for horticult ural products and animals and 
animal products complies with the requirements of the chapeau of Article XX because it is not 
applied in a manner that constitutes arbitrary or unjustifiable discrimination or amounts to a 
disguised restriction o n internationa l trade.1626 Recalling the benchmarks used to assess arbitrary 
or unjustifiable discrimination between countries where the same conditions prevail1627, Indonesia 
argues that with regards to1628 subparagraph  (a), there is no discrimination between imported or 
domest ic products  because,  pursuant to Law No 33/2014, domestic products are also required to 
have a Halal label .1629 Regarding  subparagraph  (b), Indonesia argues that the distinctions existing 
between imported and domestic products are not in any way more onerous than necessary. In this 
respect, Indonesia points out that the regulation concerning quarantine of animal and plant 
products applies to all imports, exports, as well as domestic transportation .1630 Concerning 
subparagraph  (d), Indonesia submits that no discri mination exists between importing countries  
because  the import licensing regime is applied invariably between all importing countries. In its 
view, i t would logically follow that customs enforcement, by virtue of its definition, refers to the 
import or exp ort of goods.1631 
7.540.   In arguing that the application of its import licensing regime does not result in 
discrimination,  Indonesia considers that it is unnecessary to further determine if the discrimination 
is unjustifiable or arbitrary, or if it takes place betwe en countries in which like conditions 
prevail.1632 Should the Panel find otherwise, then Indonesia considers that the resulting 
discrimination would not be arbitrary or unjustifiable because the chapeau of Article XX does not 
prohibit discrimination per se , but rathe r arbitrary  or unjustifiable  discrimination.1633 Indonesia 
further contends that, in contrast to the US – Shrimp  case, information on its import licensing 
regime, the application procedures, as well as the rationale underpinning the granting of import  
licences, are readily accessible to all.1634 For this reason, the Panel should find that its measures 
do not constitute an "arbitrary discrimination ". Furthermore, Indonesia contends that it should not 
be obliged to engage in negotiations with the complainan ts regarding a domestic law over which it 
has full autonomy.1635 
                                                
1623 United States ' second written submission, para. 141.  
1624 Indonesia 's second  written submission, p ara. 146 (referring to  Appellate Body Report, US – 
Gasoline , p. 22 ). 
1625 Indonesia 's second  written submission, para. 146 (referring to  Appellate Body Report, US – Shrimp , 
para. 156 ). 
1626 Indonesia 's second written submission , paras. 146 -148 (referring to  Appellate Body Report, EC – 
Seal Products , para. 5.299 ). 
1627 Indonesia 's second  written submission, para. 149 (referring to  Appellate Body Reports on US – 
Shrimp , para. 1 50; Panel Report, EC – Tariff Preferences , paras. 7.225 -7.235; and Panel Report , Brazil – 
Retreaded Tyres , paras. 7.226 -7.251 ). Indonesia submits that the benchmarks are: (i) the application of the 
measure at issue must result in discrimination; (ii) this discrimination must be arbitrary or unjustifiable in 
character; and (iii) this discriminatio n must occur between countries where the same conditions prevail.  
1628 Indonesia 's second written submission, para. 150.  
1629 Indonesia cites Article 4 of Law No. 33/2014 concerning Halal Product Assurance states: "products 
that enter, circulate, and traded in t he territory of Indonesia must be certified halal ", Exhibit IDN -47. 
1630 Indonesia cites Consideration (d) of Law 16/1992 concerning Animal, Fish and Plant Quarantine , 
Exhibit IDN -67. 
1631 Indonesia refers to Article 1(1) of Law No. 17/2006 concerning Customs, Exhibit IDN -66. 
1632 Indonesia 's second written submission, para. 151.  
1633 Indonesia 's second  written submission, para. 152 (referring to  Appellate Body Report, US – 
Gasoline , p. 23 ). 
1634 Indonesia 's second written submission, paras. 153 -154 (referring to  Appellat e Body in US – 
Shrimp ).  
1635 Indonesia 's second written submission, paras. 153 -154. WT/DS477/R • WT/DS478/R  
 
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  7.541.   In assessing whether measures constitute a disguised  restriction on international trade , 
Indonesia contends that the focus should lie on the word "disguised " rather than on the word 
"restriction ", given that only trade -restrictive measures are to be examined under the chapeau.1636 
Recalling specific legal guidance1637, Indonesia submits that the purpose of prohibiting a "disguised 
restriction " is not only to ensure transparency but also to supplement t he prohibition of 
"unjustifiable discrimination " among GATT contracting parties. Indonesia argues that nothing in its 
import licensing regime (for horticultural and animal products) qualifies as a "disguised " restriction 
on trade. Indonesia reiterates that  the reasons for rejecting applications, as well as all legal or 
administrative requirements, are duly publicized before their application1638, respectively on the 
website as well as in domestic laws. Moreover, Indonesia sustains that the measure has been 
applied in good faith, and in a transparent manner, among all trading partners.  
7.542.   With regards to the individual elements of its import licensing regime, and citing a specific 
Appellate Body ruling1639, Indonesia submits that the measures that comprise its import licensing 
regime do not result in discrimination, because the same legal, technical and administrative 
requirements are applied on all trading partners. Indonesia holds that custom s enforcement 
measures understandably do not apply to domestic products as t hey are border measures. 
However, Indonesia clarifies that for Halal assurance as well as for food safety concerns, Indonesia 
applies these requirements on a non -discriminatory basis. On whether a measure constitutes a 
disguised restriction of internationa l trade, Indonesia asserts that the question is whether a 
Member applies its regulations in a transparent manner.1640 In this regard, Indonesia argues that 
in the present case, its measures are fully transparent because each requirement and each 
response to i mport licence applications is published. Indonesia considers that it has established 
that its import licensing regime does not result in arbitrary or unjustifiable discrimination, nor does 
it constitute a disguised restriction on international trade. Indon esia thus asserts that it has 
fulfilled the cumulative elements of the chapeau of Article XX, and that its import licensing regime 
can be justified under Article XX(a), (b) and (d) of GATT 1994.1641 
7.3.5.1.2.2   New Zealand  
7.543.   New Zealand observes that, in Indonesia's first written submission, the chapeau  was 
barely mentioned.1642 Thus Indonesia has not only failed to establish that its measures are 
necessary to protect or secure compliance with the objectives in paragraphs (a), (b) or (d) of 
Article XX, but has also failed to d ischarge its burden of demonstrating that its measures meet the 
requirements of the chapeau to Article XX of the GATT 1994. 1643 Given the function of the 
chapeau to prevent abuse or misuse of a Member's right to invoke the exceptions contained in 
Article XX’ s paragraphs, New Zealand contends that the party invoking Article XX has the burden 
of showing that a measure is applied consistently with the chapeau. 1644 Indonesia would thus have 
to demonstrate that: any measure justified under an Article XX paragraph is  not a disguised 
restriction on trade; that the measure does not discriminate "between countries where the same 
                                                
1636 Indonesia 's second written submission, para. 155; Panel Report, EC – Asbestos , para. 8.236;  
Exhibit  IDN-68 at p. 27. 
1637 Indonesia 's second written submission, para. 155. App ellate Body Report, Japan – Alcoholic 
Beverages , p. 29, suggesting that, as the aim of a measure may not be easily ascertained, the protective 
application of a measure can most often be discerned from its design, architecture and revealing structure.  
1638 Indonesia 's second written submission, paras. 156 -157, referring to  GATT Panel Report, US – Taxes 
on Automobiles,  para. 56, where the Panel held that, since the measure was duly publicized and not applied 
before publication, it could not be considered as "disguised ". Indonesia emphasizes that it publicly announced 
its measure by enacting MOT or MOA Regulations, and that MOA 58/2015  was n otified to the SPS Committee 
(G/SPS/N/IDN/105) , Exhibit IDN -69. 
1639 Indonesia 's second written submissio n, paras. 248 -249, referring to  Appellate Body  Report  in US – 
Shrimp , para. 150 , stating that "The precise language of the chapeau requires that a measure not be applied in 
a manner which would constitute a means of 'arbitrary or unjustifiable discrimination between countries wh ere 
the same conditions prevail ' or a 'disguised restriction on international trade. '" 
1640 Indonesia 's second written submission, para. 250, referring to  GATT Panel Report, US – Taxes on 
Automobiles , para. 56.  
1641 Indonesia 's second written submission, para. 2 51; Indonesia 's oral statement at the second 
substantive meeting, para. 38.  
1642 New Zealand 's second written submission, para. 300, where New Zealand observes that the sole 
reference to the chapeau is at para. 124 of Indonesia 's first written submission. In Thailand – Cigarettes , the 
Appellate Body noted the fact that Thailand had only referred to the chapeau once, concluding that "[t]his 
cannot suffice to establish that the additional administrative requirements fulfil the requirements of the 
chapeau of Arti cle XX " (para. 1 79). 
1643 New Zealand 's second written submission, para. 309.  
1644 New Zealand 's second written submission, para. 301, referring to  Appellate Body Report, EC – Seal 
Products , para. 5.297.  WT/DS477/R • WT/DS478/R  
 
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  conditions prevail ", including between Indonesia and other Members; and that such discrimination 
is not "arbitrary or unjustifiable ".1645 New Zeala nd recalls that the standard to examine whether a 
measure is applied consistently with the chapeau requires an objective determination based, most 
often, on the "design, the architecture, and the revealing structure of a measure "1646; and that the 
burden to d emonstrate that a measure provisionally jus tified under one of the Article  XX 
exceptions does not constitute an abuse of such an exception under the chapeau is a "heavier task 
than that involved in showing that an exception … encompasses the measure at iss ue".1647 
7.544.   New Zealand submits that the text, structure and history of the import licensing 
regulations and the framework legislation pursuant to which Indonesia’s import licensing regimes 
were established, show that the actual purpose of the challenged measure s is to restrict imports of 
agricultural products when domestic production is deemed sufficient as part of Indonesia's policy 
to achieve self -sufficiency in food.1648 Thus, according to New Zealand, the import licensing 
regimes at issue are implemented throug h regulations made under these overarching laws1649, 
which carry into effect, through the challenged measures, the self -trade -restricting objectives.  
7.545.   Considering whether the challenged measures are applied in a manner which constitutes a 
disguised restriction  on international trade, New Zealand submits that Indonesia has failed to 
discharge its burden of proof.1650 Rather, New Zealand has identified that the real purpose of each 
of Indonesia’s measures is as part of a regime designed to restrict imports of agricu ltural products 
where domestic production is deemed sufficient to fulfil domestic demand.1651 New Zealand also 
sustains that Indonesia's measures are "disguised " restrictions in the sense that Indonesia has 
invoked Article XX to justify them; and that the mea sures are "taken under the guise of " measures 
formally within the terms of an exception listed in Article XX.1652 New Zealand considers that it has 
demonstrated, in its measure -by-measure responses, that in each case Indonesia has failed to 
make a prima facie  case that Article XX applies.  
7.546.   With respect to arbitrary or unjustifiable discrimination between countries where the same 
conditions prevail, New Zealand contends that the relevant legal standards are:1653 (i) the 
application of the measure must result in dis crimination; (ii) the discrimination must be arbitrary 
or unjustifiable in character; and (iii) the discrimination must occur between countries where the 
same conditions prevail. New Zealand submits that Indonesia has the burden of proving that 
Article XX provides a justification for each of its measures, demonstrating that each of these 
elements does not apply. In New Zealand's view, Indonesia has not done so, nor has Indonesia 
demonstrated that any of the challenged measures apply to domestic products or explained the 
basis for discriminating between domestic and local products. For example, Indonesia has not 
explained why it restricts the use, sale and distribution of imported products alone.  In relation to 
the third element, New Zealand observes that In donesia makes frequent reference to its equatorial 
climate. According to New Zealand, this does not justify, for example, the Indonesian harvest 
period measure, as the same climatic conditions prevail for domestic as well as imported products, 
once they ar e in Indonesia.1654 
                                                
1645 New Zealand 's second  written submission, para. 301 (refe rring to  Appellate Body Report in US – 
Gasoline , pp. 23, which held that the concepts of "disguised restriction on international trade " and "arbitrary or 
unjustifiable discrimination " are related concepts which "impart meaning to one another "). 
1646 New Zeala nd's second  written submission, para. 302 (referring to  Appellate Body Report, EC – Seal 
Products , para. 5.302 ). 
1647 New Zealand 's second written s ubmission, para. 302 (referring to  Appellate Body, US – Gasoline , 
p. 23). 
1648 New Zealand 's second  written submis sion, para. 303 ( referring to its first written submission, paras. 
2, 15-18, 67 -71). 
1649 For example, New  Zealand cites: Article 36B(1) of the Animal Law Amendment  (Exhibit JE -5), 
stating that importation of animals and animal products should only be done "if domestic production and 
supply of Livestock and Animal Product has not fulfill public consumption "; Articles 14 and 36 of the  Food Law 
(Exhibit JE -2), providing that imports of food are only allowed to the extent of any domestic shortfall; Article 
30(1),  Farmers Law  (Exhibit JE -3), prohibiting importation of agricultural commodities when the availability of 
domestic agricultural commodities is sufficient for consumption and/or government food reserves.  
1650 New Zealand 's second written submission, paras. 304 -306. 
1651 New Zealand 's second written submission, para. 305, and footnote 428, where New Zealand recalls 
the sections of its first written submission that relate to each challenged measure.  
1652 New Zealand 's second written submission, para. 30 6 (referring to  Appellate Body Report, US – 
Gasoline , p. 23 ). 
1653 New Zealand 's second  written submission, para. 307 (referring to  Appellate Body Report, US – 
Shrimp , para. 150 ). 
1654 New Zealand 's second written submission, para. 308.  WT/DS477/R • WT/DS478/R  
 
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  7.547.   New Zealand considers that, in its second written submission, Indonesia fails to 
provisionally justify its import licensing regimes as a whole in terms of the subparagraph s of 
Article XX, so the Article XX chapeau is not even reached.1655 In any event, New Zealand claims 
that Indonesia also fails to show that its measures are applied consistently with the chapeau.1656  
7.548.   Noting  that Indonesia affirms, based on the first element of the chapeau, that its import 
licensing regime is not applied in a ma nner which would constitute a means of arbitrary or 
unjustifiable discrimination between countries where the same conditions prevail1657, New Zealand 
argues that this assertion should be rejected because the Appellate Body has confirmed that one 
of the most i mportant factors in such assessment is whether the discrimination can be reconciled 
with, or is rationally related to, the policy objective with which the measure has been provisionally 
justified under the subparagraphs of Article XX of the GATT 1994.1658 New Zealand contends that it 
has demonstrating that Indonesia has failed to show that any of its measures can be reconciled 
with or is rationally connected to the policy objectives in Article XX.1659 
7.549.   On the second element of the chapeau , New Zealand takes issue with Indonesia's 
argument that because its measures are "publicly announced each time through the enforcement 
of a MOT or MOA Regulation ", they are not disguised restrictions on trade .1660 New Zealand recalls 
that a "concealed  or unannounced  restriction or di scrimination in international trade does not 
exhaust the meaning of 'disguised restriction' " under the chapeau.1661 In this regard, New Zealand 
advocates a broader reading of "disguised restriction ", which it views as consistent with the 
purpose of "avoiding abuse or illegitimate use of the exceptions to substantive rules available in 
Article  XX".1662 Accordingly, New Zealand asserts that it has demonstrated that Indonesia's 
measures are "disguised restrictions ".1663   
7.3.5.1.2.3   United  States  
7.550.   The United States submits that, a s the party invoking an Article XX exception, Indonesia 
has the burden to demonstrate that it has met the requirements of the chapeau of Article XX of 
the GATT 1994. This means that Indonesia must demonstrate that the measures at issue are not 
(i) applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination 
between countries where the same conditions prevail, or (ii) disguised restrictions on international 
trade.1664 The United States also notes that Indonesia has not made an y attempt to meet its 
burden under the chapeau in its first written submission, and its limited arguments in its second 
submission are insufficient to sustain its claim.1665 Recalling the legal standards for assessing the 
elements of arbitrary or unjustifiabl e discrimination1666 and disguised restriction on trade1667, the 
                                                
1655 New Zealand 's opening statement at the second substantive meeting, para. 48.  
1656 New Zealand 's opening statement at the second substantive meeting, para. 48; New Zealand 's 
second written submission, para. 300.  
1657 Indonesia 's second written submission, para. 148.  
1658 New Zealand 's opening statement a t the second sub stantive meeting, paras. 49 -50 (referring to  
Appellate Body Report, EC – Seal Products , para. 5.306 ). 
1659 New Zealand 's opening statement at the second substantive meeting, para. 50; second written 
submission, paras. 307 -309. 
1660 Indonesia 's second written submission, paras. 157 and 250.  
1661 New Zealand 's opening statement at the second sub stantive meeting, paras. 51 -52 (referring to  
Appellate Body Report, US – Gasoline, p. 25 (where the Appellate Body confirmed that "'disguised restriction ', 
whatever else it covers, may properly be read as embracing restrictions… taken under the guise of a measure 
formally within the terms of an exception listed in Article XX. ") 
1662 Appellate Body Report, US – Gasoline, p. 25.  
1663 New Zealand 's opening statement at th e second substantive meeting, paras. 51 -52; New Zealand 's 
second written submission, paras. 300 -306. 
1664 United States ' second written submission, para. 231.  
1665 United States ' oral statement at the second substantive meeting, para. 67.  
1666 United States ' second  written submission, para. 232 -234, referring to Appellate Body Report , EC – 
Seals , para. 5.306, where the Appellate Body found that "[o]ne of the most important factors…is the question 
of whether the discrimination can be reconciled with, or is rationally  related to, the policy objective with 
respect to which the measure has been provisionally justified under one of the subparagraphs of Article XX. "; 
and the Appellate Body Report , Thailand – Cigarettes (Philippines) , para. 1791 (stating: "In its entirety, this 
reference consisted of Thailand 's argument that, '[g]iven that these measures are applied to all products, 
imported or domestic, subject to VAT, they are not applied in a manner that constitutes an arbitrary or 
unjustifiable discrimination or a disgui sed restriction on international trade. ' This cannot suffice to establish 
that the additional administrative requirements fulfil the requirements of the chapeau of Article XX. ") 
1667 United States ' second  written submission, para. 233 (referring to Appellate Body Report , US – 
Gasoline , p. 25, where the Appellate Body found that this phrase "may properly be read as embracing 
restrictions amounting to arbitrary or unjustifiable discrimination in international trade taken under the guise of WT/DS477/R • WT/DS478/R  
 
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  United States argues that, in the present dispute, Indonesia has yet to offer any explanation or 
evidence with respect to whether the measures at issue meet the requirements of the chapeau. 
Thus, a ccording to the United States, all of Indonesia’s claims fail to establish the requisite 
elements of an Article XX defence.1668 
7.551.   The United States considers that, to the extent that Indonesia subsequently offers 
arguments or evidence on the chapeau, it remains  difficult to see how it can meet its burden, 
given the facts on the record. The United States argues that the measures at issue arbitrarily or 
unjustifiably discriminate against imports because they impose significant restrictions on trade and 
bear little  or no relationship to the policy objectives with respect to which Indonesia seeks to 
justify them under the Article XX subparagraph s.1669 
7.552.   Regarding the public morals exception under Article XX(a), the United States argues that 
the end -use and use, sale and t ransfer restrictions, which prohibit or restrict imported products’ 
access to retailers and consumers, result in arbitrary and unjustifiable discrimination. Such 
restrictions serve only to impose burdens on importation that do not exist for domestic 
produc ts.1670 In fact, domestic horticultural products are not required to be sold through 
distributors, and domestic animal products are not barred from traditional and other markets. 
Responding to Indonesia's assertion that domestic products are also required to have a halal 
label1671, the United States clarifies that compliance with halal labelling or other requirements is 
not at issue in this dispute: the challenged measures are restrictions on the sale, use, and transfer 
of imported horticultural products; prohibi tion on the sale of imported beef and other animal 
products in traditional or modern markets; and limitation on the total quantities of imported 
horticultural products based the importer’s ownership of storage capacity.1672 Indonesia has 
offered no arguments under the chapeau to address the arbitrary and unjustifiable nature of these 
restrictions.  
7.553.   Regarding the protection of human health under Article XX(b),  the United States submits 
that restrictions based on the domestic harvest period, importers’ storage ca pacity, the use, sale 
and transfer of imported products, and the six -month harvest requirement, the reference price and 
domestic purchase requirements, constitute arbitrary and unjustifiable discrimination. Each of 
these restrictions bears little, if any, relationship to the objective of protecting human, animal  or 
plant life or health. Because the restrictions are not rationally connected to the objective, they 
result in burdensome costs and limitations on the importation of horticultural and animal 
produc ts.1673 Countering Indonesia's assertion that "[t]he distinctions which exist between 
imported and domestic products are not in any way more onerous than necessary ", citing a 
provision of its quarantine law as an example1674, the United States asserts that Indon esia 
provides no evidence or explanation of what distinctions exist between imported and domestic 
products under this and other laws, or how these distinctions apply to the measures Indonesia 
seeks to justify under Article XX(b).1675 Moreover, Indonesia's pur pose for citing the quarantine 
law remains unclear, as none of the measures at issue relates to quarantine of imports.1676 
7.554.   With respect to Article XX(d), the United States contends that Indonesia has shown no 
rational connection between the application window s and validity periods, fixed licence terms, 
realization requirements, storage capacity requirements, and use, sale, and transfer restrictions , 
on the one hand, and the stated objective of securing compliance with customs laws , on the other . 
Because these restrictions do not relate to the objective of securing compliance with Indonesia’s 
customs laws, they exist solely to restrict imports and protect the domestic industry and, 
therefore, result in arbitrary and unjustifiable discrimination. 1677  
                                                                                                                                                  
a measure formally wit hin the terms of an exception listed in Article XX. "; Panel Report, EC – Asbestos , para. 
8.236, finding that "to disguise " means "to deceive " and "to misrepresent, " the panel in EC – Asbestos 
considered that a restriction "which formally meets the requireme nts of Article XX[] will constitute an abuse if 
such compliance is in fact only a disguise to conceal the pursuit of trade -restrictive objectives "). 
1668 United States ' second written submission, para. 234.  
1669 United States ' second written submission, para. 23 5. 
1670 United States ' second written submission, para. 236.  
1671 United States ' oral statement at the second subs tantive meeting, para. 68 (referring to  Indonesia 's 
second written submission, para. 150 ). 
1672 United States ' oral statement at the second substantive  meeting, para. 68.  
1673 United States ' second written submission, para. 237.  
1674 Indonesia 's second written submission, para. 150.  
1675 United States ' oral statement at the second substantive meeting, para. 69.  
1676 United States ' oral statement at the second substa ntive meeting, para. 69.  
1677 United States ' second written submission, para. 238.  WT/DS477/R • WT/DS478/R  
 
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  7.555.   Turning to In donesia's argument that no discrimination arises from any of its measures 
because its import licensing regimes apply equally to all importing countries, the United States 
considers that it does not address the fact that Indonesia’s regimes do result in dis crimination 
against imported products vis -à-vis domestic products.1678 In any event, the United States 
observes that Indonesia has not submitted all the relevant customs or food safety laws or 
regulations related to its Article XX(d) defences, or specified wh at aspects of these laws are 
relevant to the analysis under the chapeau.1679 Therefore, the United States contends that the 
Panel (and the co -complainants) have no basis upon which to evaluate Indonesia's assertion.  
7.556.   Responding to Indonesia's contention that discrimination, if it exists, is not arbitrary 
because the import licensing requirements and the rationale of the Indonesian decision -makers 
regarding certifications are "available to all applicants "1680, the United States recalls that, in 
assessing the arbit rary or unjustifiable discrimination element of the chapeau, one of the most 
important factors is whether the discrimination can be reconciled with, or is rationally related to, 
the policy objective with respect to which the measure has been provisionally justified under one 
of the subparagraphs of Article XX.1681 The United States believes that Indonesia’s arguments do 
not explain how the discrimination arising from the measures it  seeks to justify under Article  XX is 
rationally related to protecting halal, e nsuring food safety, or securing compliance with customs 
enforcement. Thus, Indonesia has failed to show that its measures do not constitute arbitrary and 
unjustifiable discrimination.1682 
7.557.   Finally, as to Indonesia's assertion that none of its measures constit utes a disguised 
restriction on international trade because Indonesia makes public the relevant import licensing 
laws and regulations as well as its reasons for rejecting an application1683, and recalling previous 
Appellate Body findings1684, the United States c onsiders that Indonesia’s mere assertion that 
"there is no lack of transparency " falls short of meeting this element. The United States points out 
that the official government policies, the texts of the measures, and statements from government 
officials co nfirm that the true objective behind Indonesia’s import restrictions is the protection of 
its own domestic producers and Indonesia’s post hoc justifications cannot  conceal this fact.1685  
7.558.   Accordingly, for the reasons described above, the United States holds t hat the challenged 
measures constitute disguised restrictions on trade.1686 Evidence from official government policies, 
the texts of the measures, and statements from government officials confirms that the true 
objective behind Indonesia’s measures is protect ing domestic producers. The United States recalls 
its description of Indonesia pursu it of a "self-sufficiency " policy with respect to food, aiming at 
gradually reducing and ultimately ending the importation of all agricultural products.1687 The 
United States considers that the most revealing evidence of Indonesia’s trade restrictive objectives 
is an intra -ministry communication concerning the imposition of seasonal restrictions on 
horticultural products.1688 The United States believes that it is difficult to see how Indonesia could 
                                                
1678 United States ' oral statement at the second substantive meeting, para. 70.  
1679 United States ' oral statement at the second substantive meeting, para. 70.  
1680 Indonesia 's second w ritten s ubmission, paras. 153 -154. 
1681 United States ' oral statement at the second  substantive meeting, para. 71 (referring to Appellate 
Body Report, EC – Seals , para. 5.306 ). 
1682 United States ' oral statement at the second substantive meeting, para. 71.  
1683 Indonesia 's second written s ubmission, paras. 156, 250.  
1684 United States ' oral statement at the second  substantive meeting, para. 72 ( referring to Appellate 
Body Report, US – Gasoline , p. 25, where the Appellate Body stated "[i]t is . . . clear that concealed or 
unannounced restrictions or discrimination on international trade does not exhaust the meaning of 'disguised 
restriction. '"; the United States holds that, instead, this element of the chapeau may be read to encompass 
restrictions taken under "the guise of a measure formally within the terms of an exception listed in Article 
XX."). 
1685 United States ' oral statement at the second  substantive meeting, para. 72 ( referring to its second 
written submission, paras. 239 -240).  
1686 United States ' second written submis sion, para. 239.  
1687 United States ' second  written submission, para. 239 ( referring to its first written submission, para s. 
10, 13-16, 82 -83 (the United States contends that the "self-sufficiency " objective underpins the measures at 
issue, with the Horticult ure Law, the Animal Law, the Food Law, and the Farmers ' Law all containing 
imperatives to allow importation only if local production or supply is insufficient to meet demand.); and paras. 
16, 85 (the United States cites statements from Indonesian Governmen t officials, from cabinet ministers to 
civil servants, who have expressed the government 's goal of reducing imports of beef, horticu ltural products 
and other foods )). 
1688 United States ' second  written submission, para. 240 ( referring to its first written sub mission, paras. 
62, 63; and Exhibit US -25 (In this letter, government officials charged with administering these restrictions 
openly discuss how and why they restrict imported products.  Specifically, the Ministry of Agriculture Director of WT/DS477/R • WT/DS478/R  
 
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  meet its burden to show that the measures do not constitute arbitrary or unjustifiable 
discrimination or disguised restrictions on trade, given the significant amount of evidence on the 
record to the contrary.1689 
7.3.5.2   Analysis by the Panel  
7.3.5.2.1   Introduction  
7.559.   The task before the Panel is to determine whether Measure  1 (Limited application windows 
and validity periods) is justified under Article XX(d) of the GATT  1994. We commence with the text 
of the relevant provision and the ensuing legal standard.  
7.3.5.2.2   The relevant legal provision  
7.560.   Article XX of the GATT 1994 reads, in relevant part, as follows:  
Article XX  
General Exceptions  
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiab le discrimination between countries 
where the same conditions prevail, or a disguised restriction on international trade, 
nothing in this Agreement shall be construed to prevent the adoption or enforcement 
by any Member of measures:  
 (a) … 
 … 
 (d) necessar y to secure compliance with laws or regulations which are not 
inconsistent with the provisions of this Agreement, including those relating to customs 
enforcement, the enforcement of monopolies operated under paragraph 4 of Article II 
and Article XVII, the protection of patents, trade marks and copyrights, and the 
prevention of deceptive practices; …  
7.561.   As we explained in Section  7.3.5.2.2 above , the assessment of a claim of justification 
under Article  XX involves a two -tiered an alysis in which a measure must (i) be provisionally 
justified under one of the subparagraphs of Article XX, in this case subparagraph  (d), and then (ii) 
analysed under the chapeau  of Article XX.1690 Hence, in or der to justify an otherwise 
WTO-inconsistent mea sure, the Member invoking a subparagraph of Article  XX as a defence bears 
the burden of establishing that the conditions prescribed therein are met.1691 Therefore, it is 
incumbent upon Indonesia to demonstrate that the relevant measure is provisionally justif ied 
under subparagraph (d) and that the measure is applied in a manner consistent with the chapeau  
of Article XX.  
7.562.   Concerning the first tier of the test , in Korea – Various Measures on Beef , the Appellate 
Body explained that, for a respondent to provisiona lly justify a measure under Article  XX(d) of the 
GATT  1994, the following two elements must be shown: (i)  the measure must be one "designed " 
to secure compliance with laws or regulations that are not themselves inconsistent with some 
provision of the GATT 1994; and (ii)  the measure must be "necessary " to secure such 
compliance.1692 In Argentina – Financial Services , the Appellate Body, in the context of a similar 
exception set out in Article XIV(c) of the General Agreement on Trade in Services (GATS) , found 
that, with respect to the first element that the phrase "to secure compliance " circumscribes the 
scope of Article  XIV(c) of the GATS, as it speaks to the function of the measures that a Member 
                                                                                                                                                  
Horticulture exp lains that he imposes these restrictions to ensure that imported horticultural products do not 
compete with local produ cts during their harvest season )) 
1689 United States ' second written submission, para. 241.  
1690 Appellate Body Report, EC – Seal Products , para. 5.169 (referring to Appellate Body Reports, US – 
Gasoline , p. 22, DSR 1996:I, p. 20; US – Shrimp , paras.  119 and  120; US – Gambling , para. 292 ). 
1691 Appellate Body Reports, Korea – Various Measures on Beef , para. 157; Thailand – Cigarettes , 
para. 179. 
1692 Appellate Body Report, Korea – Various Measures on Beef , para.  157. WT/DS477/R • WT/DS478/R  
 
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  can seek to justify under this provision. This phrase calls for a n initial examination of the 
relationship between the inconsistent measure and the relevant laws or regulations and, for this 
purpose, directs panels to scrutinize the design of the measures sought to be justified. According 
to the Appellate Body, a measur e can be said "to secure compliance " with laws or regulations 
when its design reveals that it secures compliance with specific rules, obligations, or requirements 
under such laws or regulations, even if the measure cannot be guaranteed to achieve such resu lt 
with absolute certainty.1693 Since it is incumbent upon the respondent to identify specific rules, 
obligations, or requirements contained in the WTO -consistent laws or regulations, the more 
precisely a respondent is able to do so, the more likely it will b e able to elucidate how and why the 
inconsistent measure secures compliance with such laws or regulations. Yet, where the 
assessment of the design of the measure, including its content and expected operation, reveals 
that the measure is incapable of securi ng compliance with specific rules, obligations, or 
requirements under the relevant law or regulation, as identified by a respondent, there is not a 
relationship that meets the requirements of this step.1694 Further analysis with regard to whether 
this measure  is "necessary " to secure such compliance may not be required. The Appellate Body is 
of the view that this is because there is no justification under Article  XIV(c) for a measure that is 
not designed to "secure compliance " with a Member's laws or regulatio ns. The Appellate Body 
further insists that a panel must not, however, structure its analysis of the first element in such a 
way as to lead it to truncate its analysis prematurely and thereby foreclose consideration of crucial 
aspects of the respondent's d efence relating to the "necessity " analysis.1695 
7.563.   Concerning the second element, the Appellate Body  in Argentina – Financial Services  also 
explained that it entails a more in -depth, holistic analysis of the relationship between the 
inconsistent measure and the  relevant laws or regulations. In particular, this element entails an 
assessment of whether, in the light of all relevant factors in the "necessity " analysis, this 
relationship is sufficiently proximate, such that the measure can be deemed to be "necessary " to 
secure compliance with such laws or regulations.1696 In this respect, th e "necessity test " involves a 
process of "weighing and balancing " a series of factors, including the importance of the objective, 
the contribution of the measure to that objective, a nd the trade -restrictiveness of the measure.1697 
The weighing and balancing exercise can be understood as "a holistic operation that involves 
putting all the variables of the equation together and evaluating them in relation to each other 
after having examine d them individually, in order to reach an overall judgement. "1698 The 
Appellate Body has further explained that, in most cases, a comparison between the challenged 
measure and possible alternatives should subsequently be undertaken.1699 
7.564.   Regarding the specific fa ctors of the "necessity " analysis, the Appellate Body has indicated 
that it entails "an assessment of the 'relative importance' of the interests or values furthered by 
the challenged measure ".1700 The more vital or important the interests or values that are r eflected 
in the objective of the measure, the easier it would be to accept a measure as "necessary ".1701 In 
Korea – Various Measures on Beef , the Appellate Body explained that one factor to also be 
considered in the weighing and bal ancing of the relevant fact ors when evaluating whether a 
measure is "necessary " under Article  XX(d) of the GATT  1994 is "the extent to which the measure 
contributes to the realization of the end pursued, the securing of compliance with the law or 
regulation at issue ".1702 In assessing this factor, "a panel's duty is to assess, in a qualitative or 
quantitative manner, the extent of the measure 's contribution to the end pursued, rather than 
                                                
1693 Appellate Body Report, Argentina – Financial Services , para. 6.203. (fns omitted)  
1694 Appellate  Body Report, Colombia – Textiles , para.  5.126.  
1695 Appellate Body Report, Argentina – Financia l Services , para. 6.203. (fns omitted)  
1696 Appellate Body Report, Argentina – Financial Services , para. 6.204. (fns omitted)  
1697 Appellate Body Report, EC – Seal Products , para. 5.169 (referring to Appellate Body Reports, Korea 
– Various Measures on Beef , para. 164; US – Gambling , para. 306; and Brazil – Retreaded Tyres , para. 182).  
1698 Appellate  Body Report, Brazil – Retreaded Tyres , para. 182. See also , Appellate  Body Report, 
Colombia – Textiles , para.  5.75. The Appellate Body explains that, w hether a particu lar degree of contribution 
is sufficient for a measure to be considered "necessary " cannot be answered in isolation from an assessment of 
the degree of the measure 's trade –restrictiveness and of the relative importance of the interest or value at 
stake.  Appellate  Body Report, Colombia – Textiles , para.  5.77. 
1699 Appellate  Body Reports, EC – Seal Products , para. 5.169 (referring to Appellate  Body Reports,   
US – Gambling , para. 307; and Korea – Various Measures on Beef , para. 166). See also , Appellate  Body 
Report, Colombia – Textiles , para.  5.70. 
1700 Appellate  Body Report,  US – Gambling , para. 306 (referring to Appellate Body Reports,  
Korea – Various Measures on Beef , para. 162; and EC – Asbestos , para. 172). See also , Appellate  Body Report, 
Colombia – Textiles , para. 5.71. 
1701 Appellate  Body Report, Korea – Various Measures on Beef , para. 162. See also , Appellate  Body 
Report, Colombia – Textiles , para.  5.71. 
1702 Appellate Body Report, Korea – Various Measures on Beef , para.  163. WT/DS477/R • WT/DS478/R  
 
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  merely ascertaining whether or not the measure makes any contribution. "1703 This is because 
"[t]he gre ater the contribution, the more easily a measure might be considered to be 
'necessary' ".1704 The Appellate Body has counselled that there is no "generally applicable standard 
requiring the use of a pre -determined threshold of contri bution in analysing the nec essity of a 
measure under Article XX of the GATT 1994 ".1705 Since a  measure's contribution is only one 
component of the necessity calculus under Article  XX, the assessment of whether a measure is 
"necessary " cannot be determined by the degree of contribution alone, but will depend on the 
manner in which the other factors of the "necessity " standard inform the analysis.1706 Another 
relevant factor that we must take into account in conducting a "necessity " analysis is the 
restrictiveness of the measure in respect o f international commerce. In assessing this factor, we 
"must seek to assess the degree of a measure's trade -restrictiveness, rather than merely 
ascertaining whether or not the measure involves some restriction on trade ".1707 In most cases, a 
panel must also c ompare the challenged measure and possible alternative measures that achieve 
the same level of protection while being less trade restrictive.1708 The Appellate  Body has 
explained that an alternative measure may be found not to be "reasonably available " where "it is 
merely theoretical in nature, for instance, where the responding Member is not capable of taking 
it, or where the measure imposes an undue burden on that Member, such as prohibitive costs or 
substantial technical difficulties ".1709 The complaining part y bears the burden of identifying any 
alternative measures that, in its view, the responding party should have taken.1710 
7.565.   Regarding the second tier of the test, the chapeau  requires that the measure not be 
applied in a manner that would constitute a means of  "arbitrary or unjustifiable discrimination 
between countries where the same conditions prevail ", or "a disguised restriction on international 
trade ". The Appellate Body has stated that the function of the chapeau of Article XX of the 
GATT  1994 "is to prev ent the abuse or misuse of a Member's right to invoke the exceptions 
contained in the subparagraphs of that Article ".1711 According to the Appellate Body, the chapeau  
"imposes additional disciplines on measures that have been found to violate an obligation un der 
the GATT 1994, but that have also been found to be provisionally justified under one of the 
exceptions set forth in the subparagraphs of Article  XX."1712 The chapeau  does so by requiring that 
measures are not "applied in a manner which would constitute a m eans of arbitrary or unjustifiable 
discrimination between countries where the same conditions prevail, or a  disguised restriction on 
international trade ".1713 The burden of demonstrating that a measure that is provisionally justified 
under one of the exceptio ns of Article  XX does not constitute an abuse of such an exception under 
the chapeau  rests with the party invoking the exception .1714 This is "a heavier task than that 
                                                
1703 Appellate  Body Report, Argentina – Financial Services , para. 6.234. See also , Appellate  Body Report, 
Colombia – Textiles , para.  5.72. 
1704 Appellate  Body Report, Korea – Various Measures on Beef , para. 163.  
1705 Appellate  Body Reports, EC – Seal Products , para. 5.213.  
1706 Appellate  Body Reports, EC – Seal Products , para.  5.215.  
1707 Appellate  Body Report, Argentina – Financial Services , para. 6.234. See also , Appellate  Body Report, 
Colombia – Textiles , para.  5.73. As with the assessment of a measure 's contribution to its objective, the 
examination of a measure 's trade –restrictivenes s may be done in a qualitative or quantitative manner. In this 
vein, the Appellate  Body has stated that "[a] measure with a relatively slight impact upon imported products 
might more easily be considered as 'necessary ' than a measure with intense or broader restrictive effects. " 
Appellate  Body Report, Korea – Various Measures on Beef , para. 163. See also , Appellate  Body Report, 
Colombia – Textiles , para.  5.73. 
1708 Appellate  Body Reports, EC – Seal Products , para.  5.169. In EC – Seal Products , the Appellate Body 
recalled that, in US – Tuna II (Mexico) , it had identified in the context of Article 2.2 of the Agreement on 
Technical Barriers to Trade (TBT  Agreement) circumstances in which a comparison with possible alternative 
measures  may not be required, for instance, when the challenged measure is not trade restrictive, or when it 
makes no contribution to the objective (Appellate  Body Reports, EC – Seal Products , fn 1181 to para.  5.169 
(referring to Appellate Body Report, US – Tuna I I (Mexico) , fn 647 to para. 322)).  
1709 Appellate  Body Report,  US – Gambling , para. 308. See also , Appellate  Body Report, Colombia – 
Textiles , para.  5.74. 
1710 Appellate Body Report, EC – Seal Products , para. 5.169 (referring to Appellate Body Report,  US – 
Gambl ing, paras. 309 -311). The Appellate  Body has observed that "the very utility of examining the interaction 
between the various factors of the necessity analysis, and conducting a comparison with potential alternative 
measures, is that it provides a means of  testing these factors as part of a holistic weighing and balancing 
exercise".  Appellate  Body Reports, EC – Seal Products , para. 5.215. (fn omitted) See also , Appellate  Body 
Report, Colombia – Textiles , para.  5.75. 
1711 Appellate Body Report, EC – Seal Produc ts, para. 5.296 (referring to Appellate Body Report, US – 
Gasoline , p. 22, DSR 1996:I, pp. 20 -21).  
1712 Appellate Body Report, EC – Seal Products , para. 5.296.  
1713 Appellate Body Report, EC – Seal Products , para. 5.169.  
1714 Appellate Body Report, EC – Seal Produ cts, para. 5.297 (referring to Appellate Body Report, US – 
Gasoline , pp. 22 -23, DSR 1996:I, p. 21).  WT/DS477/R • WT/DS478/R  
 
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  involved in showing that an exception … encompasses the measure at issue. "1715 The Appellate 
Body has explained that the chapeau  of Article  XIV of the GATS, which shares similar language 
with Article  XX, refers to "the application of a measure already found by the Panel to be 
inconsistent with one of the obligations under the GATS but fall ing withi n one of the paragraphs of 
Article XIV ".1716 The Appellate Body has clarified that "[a]lthough this suggests that the focus of 
the inquiry is on the manner in which the measure is applied , the Appellate Body has noted that 
whether a measure is applied  in a pa rticular manner 'can most often be discerned from the design, 
the architecture, and the revealing structure of a measure ' ".1717 It is thus relevant to consider the 
design, architecture, and revealing structure of a measure in order to establish whether the 
measure, in its actual or expected application, constitutes a means of arbitrary or unjustifiable 
discrimination between countries where the same conditions prevail. This involves a consideration 
of "both substantive and procedural requirements " under the m easure at issue.1718  
7.566.   We recall that the chapeau  provides that measures must not be applied in a manner which 
would constitute a means of "arbitrary or unjustifiable discrimination between countries where the 
same conditions prevail, or a disguised rest riction on international trade ". The first two situations 
(i.e. arbitrary discrimination or unjustifiable discrimination) have often been addressed 
together.1719 The existence of one of these situations suffices to conclude that a measure cannot 
be justified under Article  XX of the GATT  1994.1720 The Appellate Body has indicated that in order 
for a measure to be applied in a manner which constitutes "arbitrary or unjustifiable discrimination 
between countries where the same conditions prevail ", three elements must exis t: (i) the 
application of the measure must result in  discrimination; (ii) the discrimination must be arbitrary 
or unjustifiable in character; and (iii) this discrimination must occur between countries where the 
same conditions prevail.1721 As the Appellate Bo dy indicated, "t]he assessment of these factors … 
was part of an analysis that was directed at the cause, or the rationale, of the discrimination ".1722 
The Appellate Body has explained that the analysis of whether discrimination is arbitrary or 
unjustifiable within the meaning of the chapeau "should focus on the cause of the discrimination, 
or the rationale put forward to explain its existence ".1723 Furthermore, according to the Appellate 
Body, one of the most important factors in an assessment of arbitrary or un justifiable 
discrimination is the question of whether the discrimination can be reconciled with, or is rationally 
related to, the policy objective with respect to which the measure has been provisionally justified 
under one of the subparagraphs of Article XX.1724 For the Appellate Body, in determining which 
"conditions " prevailing in different countries are relevant in the context of the chapeau , the 
subparagraphs of Article XX, and in particular the subparagraph under which a measure has been 
provisionally ju stified, provide pertinent context in the sense that the "conditions " relating to the 
particular policy objective under the applicable subparagraph are relevant for the analysis under 
the chapeau.1725 Subject to the particular nature of the measure and the sp ecific circumstances of 
the case, the provisions of the GATT 1994 with which a measure has been found to be inconsistent 
may also provide useful guidance on the question of which "conditions " prevailing in different 
countries are relevant in the context of  the chapeau. In particular, the type or cause of the 
violation that has been found to exist may inform the determination of which countries should be 
compared with respect to the conditions that prevail in them.1726 
                                                
1715 Appellate Body Report, EC – Seal Products , para. 5.297 (referring to Appellate Body Report, US – 
Gasoline , p. 23, DSR 1996:I, p. 21).  
1716 Appellate Body Re port, US – Gambling , para. 339 (referring to Appellate Body Report, US – 
Gasoline ) (emphasis original). We recall that the text of the chapeau of Article  XIV of the GATS is drafted in 
terms virtually identical to the chapeau of Article  XX of the GATT  1994.  Accordingly, the case law developed 
under Article  XX of the GATT  1994 is relevant for our analysis.  
1717 Appellate Body Report, EC – Seal Products , para. 5.302 (referring to Appellate Body Report, Japan – 
Alcoholic Beverages II , p. 29).  
1718 Appellate Body Repo rt, EC – Seal Products , para. 5.302 (referring to Appellate Body Report, US – 
Shrimp , para. 160).  
1719 See, for example, Appellate Body Reports, US – Gasoline , US – Shrimp (Article  21.5 – Malaysia), 
US – Gambling , and Brazil – Retreaded Tyres; and Panel Repor ts, US – Gambling , EC – Tariff Preferences , EC – 
Asbestos  and Brazil – Retreaded Tyres . 
1720 Appellate Body Report, US – Shrimp , para.  184. 
1721 Appellate Body Report, US – Shrimp , para.  150. 
1722 Appellate Body Report, Brazil – Retreaded Tyres , para.  225. (fn. omi tted) 
1723 Appellate Body Report, Brazil – Retreaded Tyres , para. 226 (referring to Appellate Body Reports, 
US – Gasoline ; US – Shrimp ; and US – Shrimp (Article  21.5 – Malaysia) ).  
1724 See Appellate Body Reports, US – Shrimp , para. 165; and Brazil – Retreaded T yres, paras. 227, 
228, and 232; EC – Seal Products , para. 5.306.  
1725 Appellate Body Report, EC – Seal Products , para. 5.300.  
1726 See Appellate Body Report, US – Gasoline , p. 23 -24, DSR 1996:I, pp. 21 -22; and Appellate Body 
Report s, US – Shrimp , para. 150 ; EC – Seal Products , para.  5.300 . WT/DS477/R • WT/DS478/R  
 
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  7.567.   In US – Gasoline , the Appellate Body held that the concepts of "arbitrary or unjustifiable 
discrimination " and "disguised restriction on international trade " were related concepts which 
"imparted meaning to one another ".1727 For the Appellate Body, i t is clear that "disguised 
restriction " includes di sguised discrimination in international trade and that concealed or 
unannounced restriction or discrimination in international trade does not exhaust the meaning of 
"disguised restriction ". The Appellate Body further clarified that the kinds of considerati ons 
pertinent in deciding whether the application of a particular measure amounts to "arbitrary or 
unjustifiable discrimination " may also be taken into account in determining the presence of a 
"disguised restriction " on international trade. "The fundamenta l theme is to be found in the 
purpose and object of avoiding abuse or illegitimate use of the exceptions to substantive rules 
available in Article  XX".1728 
7.568.   In conducting our analysis, we bear in mind that Article  XX of the GATT  1994 applies to 
"measures " that are to be analysed under the subparagraphs and the chapeau , not to any 
inconsistency with the GATT  1994 that might arise from such measures. In this respect, the 
aspects of a measure to be justified under the subparagraphs of Article  XX are those that giv e rise 
to the finding of inconsistency under the GATT 1994.1729 Our analysis of Measure  1 under 
Article  XX(d) of the GATT  1994 will therefore focu s on the aspects of the measure  that have given 
rise to the findings of inconsistency with Article  XI:1 of the GA TT 1994, particularly those aspects 
concerning the design and operation of measure .  
7.569.   We shall therefore proceed to examine whether Indonesia has demonstrated that 
Measure  1 is justified under Article XX(d) of the GATT  1994. As we indicated in Section  7.3.1 
above , Indonesia has only provided arguments on a measure by measure basis with respect to the 
first tier of the analysis for each of the relevant subparagraphs of Article XX. The second tier, i.e. 
whether the measures at i ssue are applied in a manner consistent with the chapeau  of Article  XX, 
has been argued by Indonesia for its import licensing regime  as a whole, thus making no 
distinctions between measures  or defences . Under these circumstances, we are driven to follow 
the same approach in our analysis.  
7.3.5.2.3   Whether Measure  1 (Limited application windows and validity periods ) is 
provisionally justified under subparagraph  (d) of Article  XX of the GATT  1994  
7.570.   The task before the Panel is to determine whether Measure  1 is provisiona lly justified 
under subparagraph  (d) of Article XX of the GATT  1994. As explained before, we shall examine 
whether Indonesia has demonstrated that Measure  1 is designed to secure compliance with 
Indonesia's WTO -consistent laws and regulations and, if so, w hether it is necessary to secure such 
compliance.  
7.571.   We commence with the first element of this tier. We recall that this entails an initial 
examination of the relationship between Measure  1 and the WTO -consistent laws or regulations 
identified by Indonesia w ith which compliance is to be secured. In order to do so, we are to 
scrutinize the design of Measure  1, including its content and expected operation. We recall that a 
measure can be said "to secure compliance " with laws or regulations when its design revea ls that 
it secures compliance with specific rules, obligations, or requirements under such laws or 
regulations, even if the measure cannot be guaranteed to achieve such result with absolute 
certainty.1730  
7.572.   A key step in this analysis is to establish whether a nd, if so, how precisely Indonesia has 
identified the WTO-consistent  laws and regulations. We recall that recourse to Article  XX(d) 
requires the identification of "specific " rules, obligations or requirements of laws or regulations that 
are not themselves WTO-inconsistent1731 and that it is incumbent upon Indonesia to do so. In this 
respect, the more precisely Indonesia is able to identify specific rules, obligations or require ments 
contained in the WTO -consistent laws or regulations, the more likely we will b e able to elucidate 
how and why Measure  1 secures compliance with such laws or regulations.  
                                                
1727 Appellate Body Report, US – Gasoline , p. 25.  
1728 Appellate Body Report, US – Gasoline , p. 25.  
1729 Appellate Body Report, EC – Seal Products , para.  5.185 (referring to Appellate Body Report, US – 
Gasoline , pp. 12 and 13); see also , Appellate Body Report, Argentina – Financial Services , para. 6.169.  
1730 Appellate Body Report, Argentina – Financial Services , para. 6.203. (fns omitted)  
1731 Appellate Body Report, Argentina – Financial Services , para. 6.203.  See also , Appellate Body Repor t, 
Colombia – Textiles, para. 5.126 . WT/DS477/R • WT/DS478/R  
 
- 198 - 
 
  7.573.   Concerning the identification of the WTO -consistent laws and regulations, Indonesia, in  its 
response to a question from the Panel after the first substantive meeti ng, submitted the following:  
The WTO -consistent laws and regulations which the realization requirement is 
designed to secure compliance with include Law 10/1995 on Customs and its 
amendment, Ministry of Finance Regulation 139 /2007 on the Customs Verificat ion for 
Imported Products  and its amendment , MoA 113/2013 concerning Animal Quarantine 
for Beef  and other relevant regulations concerning quarantine and food safety as 
mentioned in our answer in paragraph 12 above. Compliance with these laws and 
regulation s also provides the justification for several other measures challenged by 
Complainants, including application windows and validity periods, the terms of import 
licenses, and storage capacity requirements.1732 
7.574.   In the cited paragraph  12 of its responses to que stions, Indonesia provided a list of  ten 
legal instruments dealing with issues such as quarantine, labelling, food safety, quality, nutrition, 
packaging recycling etc . as follows : 
Please  also note that MOT 71/2015 refers to other laws and regulations conce rning 
Food Safety, such as:  
a. Law 16/1992 concerning Animal, Fish and Plant Quarantine  
b. Government Regulation 69/1999 concerning Labeling and Food 
Advertising  
c. Government Regulation 14/2002 concerning Plant Quarantine  
d. Government Regulation 28/2004 concerning Food Safety, Quality 
and Nutrition  
e. MOA 88/2011 concerning Food Safety Control over the Import and 
Export of Fresh Food of Plant Origin  
f. MOT 48/2015 concerning General Provisions in Import Sector  
g. MOT 24/2010 concerning Inclusion of Food Grade Logo and 
Recycling Code of Plastic Food Packaging  
h. MOA Regulation 42/2012 concerning Plant Quarantine Measures for 
Entry of Fresh Fruits and Vegetables into the Republic of Indonesia 
Territory  
i. MOT 46/2014 concerning General Provisions of Verific ation or 
Technical  Surveillance in Trading Sector  
j. MOA 43/2012 concerning Plant Quarantine Measures for 
Importation of Fresh Bulbs Vegetables  into the Republic of Indonesia 
Territory .1733 
7.575.   Subsequently, in its second written submission1734, Indonesia refers to the same legal 
instruments as above, adding this time in a footnote1735 a new regulation, MOA 113/2013, 
concerning Animal Quarantine for Beef, as follows : 
Indonesia argues that its import licensing regime is designed to  secure compliance 
with those laws and r egulations, namely Law No. 10/1995 concerning Customs, which 
is later amended by Law No. 17/2006 ( "Customs Law "),1736 Ministry of Finance 
Regulation No. 139/2007 on the Customs Verification for Imported Products  and its 
                                                
1732 Indonesia's Additional response to Panel question No. 71 (footnotes omitted).  
1733 Indonesia's Additional response to Panel question No. 20.  
1734 Indonesia's second written submission, para. 130.  
1735 Indonesia's second writte n submission, para. 130, fn. 175.  
1736 (footnote original) See Exhibit IDN -65 and Exhibit IDN -66 for English translation of Indonesia 
Customs Law.  WT/DS477/R • WT/DS478/R  
 
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  amendment , as well as other relevant re gulations concerning quarantine and food 
safety.1737 
7.576.   In its oral statement at the second substantive meeting1738, Indonesia further indicated as 
follows:  
… Indonesia's import licensing regime is designed to secure compliance with those 
laws and regulations, name ly Law No. 10/1995 concerning Customs, which was later 
amended by Law No. 17/2006 ( "Customs Law "), and Ministry of Finance Regulation 
No. 139/2007 on the Customs Verification for Imported Products  and its amendment , 
as well as other relevant regulations co ncerning quarantine and food safety.  
According to Indonesia's Customs Law, customs means "everything related to 
monitoring over flow of goods in or out of customs area and collection of import duty 
and export duty ".1739 Moreover, the consideration of the Cust oms Law also stipulates 
that its implementation is intended to guarantee gr eater legal certainty, support the 
smooth flow of goods, and increase effective monitoring of the flow of goods into or 
out of Indonesian customs areas.1740  
7.577.   The account included in pa ragraphs  7.573  through 7.576 above  totalizes the laws and 
regulations that Indonesia has put  forward in order to meet the identification standard of 
subparagraph  (d). We recall that the concept o f "laws and regulations " was examined by the 
Appellate Body in Mexico – Taxes on Soft Drinks , which concluded that those terms "cover rules 
that form part of the domestic legal system of a WTO Member ".1741 We agree with Indonesia in 
that all the instruments i t has mentioned form part of its domestic legal system.  We observe that 
leaving aside a passing reference to Measure  1, Indonesia refers to the above laws and regulations 
generally with respect to all the challenged measures. Notably, MOT 71/2015, which, a ccording to 
Indonesia  (see paragraph  7.574 above ), is the instrument referring to the list of ten regulations 
concerning quarantine and food safety , is not a measure at issue in this dispute. Indeed, 
MOT 71/2015  was enacted after the establishment of this Panel and is therefore not within our 
terms of reference.  
7.578.   Indonesia has argued that customs enforcement in itself is not WTO-inconsistent  and that 
it is well established that a responding Member's law must be presumed to be WTO-consistent.1742 
In Indonesia's view, since the complainants have not challenged its customs laws and regulations 
in a general manner, having only made claims in respect to certain specific aspects of such laws as 
they relate to horticultural and anim al products, Indonesia concluded  that its customs laws and 
                                                
1737 (footnote original)  As stated in Indonesia 's additional response to the first set of questions from the 
panel submitted on 25 February 2016, the other relevant regulations concerning quarantine and food safety 
includes:  
a. Law 16/1992 concerning Animal, Fish and Plant Quarantine;  
b. Government Regulation 69/1999 concerning Labeling and Food Advertising;  
c. Governm ent Regulation 14/2002 concerning Plant Quarantine;  
d. Government Regulation 28/2004 concerning Food Safety, Quality and Nutrition;  
e. MOA 88/2011 concerning Food Safety Control over the Import and Export of Fresh Food of 
Plant Origin;  
f. MOT 48/2015 conce rning General Provisions in Import Sector;  
g. MOT 24/2010 concerning Inclusion of Food Grade Logo and Recycling Code of Plastic Food 
Packaging;  
h. MOA Regulation 42/2012 concerning Plant Quarantine Measures for Entry of Fresh Fruits 
and Vegetables into the  Republic of Indonesia Territory;  
i. MOT 46/2014 concerning General Provisions of Verification or Technical Surveillance in 
Trading Sector;  
j. MOA 43/2012 concerning Plant Quarantine Measures for Importation of Fresh Bulbs 
Vegetables  into the Republic of I ndonesia Territory.  
h.  MOA 113/2013 concerning Animal Quarantine for Beef  
1738 Indonesia's second oral statement, paras.  35-36. 
1739 (footnote original) Law 17/2006 Article 1(1) , see Exhibit IDN -66. 
1740 (footnote original) Consideration (a) of Law 17/2006 , see Ex hibit IDN -66. 
1741 The Appellate Body added that "laws and regulations" also include "rules deriving from international 
agreements that have been incorporated into the domestic legal system of a WTO Member or have direct effect 
according to that WTO Member's legal system". See Appellate Body Report, Mexico – Taxes on Soft Drinks , 
para. 79. 
1742 Indonesia 's second wri tten submission, paras. 136 -137 (referring to  Panel Report, Colombia – Ports 
of Entry , para. 7.527;  Appellate Body Report, US – Carbon Steel , para. 1 57; Dominican Republic – Import and 
Sale of Cigarettes , para. 111; US – Gambling , para. 138 ). WT/DS477/R • WT/DS478/R  
 
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  procedures, including those intended to secure customs enforcement, are presumed to be 
consistent with Indonesia's WTO obligations.1743 We note that none of the measures at issue, 
including Measure  1, is a  provision of Indonesia's Customs Laws or the other regulations 
mentioned by Indonesia. We also note that we have not been provided with any evidence that 
would contradict Indonesia's statement about the WTO -consistency of the listed laws and 
regulations. In this respect, w e recall that the Appellate Body has emphasized that the legislation 
of a defending  Member shall be considered WTO -consistent until proven otherwise.1744 We 
therefore accept Indonesia's contention that the listed laws and regulations are not  
WTO-inconsistent for the purpose of our analysis under Article XX(d) of the GATT  1994.  
7.579.   We note that the co -complainants1745 have argued that Indonesia has failed to properly 
identify the WTO -consistent laws and regulations for the purpose of Article XX(d). T heir main 
contention is that Indonesia has listed the above laws and regulations and referred to them in a 
general manner without identifying relevant provisions as well as failed to provide the text of the 
majority of those laws and regulations.  
7.580.   We obser ve that, as remarked by the co -complainants1746, out of the legal instruments 
enumerated by Indonesia, only the following instruments are within our record : 
a. Indonesia's Customs Law ( Exhibit IDN -65 and Exhibit IDN -66) 
b. Law 16/1992 concerning Animal, Fish and Pl ant Quarantine (Exhibit IDN -67); 
c. Government Regulation 69/1999 concerning Labelling and Food Advertising 
(Exhibit  USA-104);  
d. MOA Regulation 42/2012 concerning Plant Quarantine Measures for Entry of Fresh Fruits 
and Vegetables into the Republic of Indonesia Territory (Exhibit IDN -89); 
e. MOT 46/2014 concerning General Provisions of Verification or Technical Surveillance in 
Trading Sector (Exhibit IDN -88); 
7.581.   We agree with the co -complainants in that merely listing a number of legal instruments 
falls short of the id entification standard of laws or regulations for the purpose of Article XX(d). As 
considered by the panel in Argentina – Financial Services1747, in order to meet such standard,  it is 
not enough to refer to the laws and regulations or to their provisions; rath er, the respondent must 
provide their texts, either by way of an exhibit (unless it is already in the panel's record) or by 
quoting their wording in its submissions. On these grounds, we are unable to take into account for 
the purpose of our analysis the r emaining laws and regulations listed by Indonesia for which it has 
failed to provide the texts, either by way of an exhibit or by quoting their wording in its 
submissions.1748 
7.582.   We are thus left with Indonesia's reference to the laws and regulations that we do have on 
the record , namely  Indonesia's Customs Law;  Law 16/1992 concerning Animal, Fish and Plant 
Quarantine;  Government Regulation 69/1999 concerning Labelling and Food Advertising;  
MOA Regulation 42/2012 concerning Plant Quarantine Measures for Entry of Fresh Fruits and 
                                                
1743 Indonesia 's second written submission, paras. 136.  
1744 Appellate Body Report, US – Carbon Steel , para.  157. See also  Appellate Body Reports, 
Dominican  Republic – Import and Sale of Cigarettes , para.  111, and US – Gambling , para.  138. 
1745 New Zealand's second written submission, para. 185; United States' second written submission, 
para. 141.  
1746 New Zealand's second written submission, para. 185 (referring to Panel Repo rt, Colombia – Ports of 
Entry , paras. 7.516 -7.525). United States ' oral statement at the second substantive meeting, paras. 56 -58 ( 
referring to Appellate  Body Report, Thailand – Cigarettes (Philippines) , para. 179, fn.271; Panel Report, 
Colombia – Ports o f Entry , paras. 7.516 -517 and 7.521 ). 
1747 Panel Report, Argentina – Financial Services , para.  7.609. See also  Panel Report, Colombia – 
Textiles , paras. 7.505. and 7.507.  
1748 These regulations are: Ministry of Finance Regulation No. 139/2007 on the Customs Veri fication for 
Imported Products and its amendment, as well as other relevant regulations concerning quarantine and food 
safety; Government Regulation 14/2002 concerning Plant Quarantine; Government Regulation 28/2004 
concerning Food Safety, Quality and Nutr ition; MOA 88/2011 concerning Food Safety Control over the Import 
and Export of Fresh Food of Plant Origin; MOT 48/2015 concerning General Provisions in Import Sector; MOT 
24/2010 concerning Inclusion of Food Grade Logo and Recycling Code of Plastic Food P ackaging; MOA 43/2012 
concerning Plant Quarantine Measures for Importation of Fresh Bulbs Vegetables into the Republic of Indonesia 
Territory; and MOA 113/2013 concerning Animal Quarantine for Beef.  WT/DS477/R • WT/DS478/R  
 
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  Vegetables into the Republic of Indonesia Territory;  and MOT 46/2014 concerning General 
Provisions of Verification or Technical Surveillance in Trading Sector . 
7.583.   We observe that, as the co -complainants contended, Indonesia has simply listed those 
laws and regulations without identifying the specific rules, obligations or requirements with which 
the measures at issue, in this case Measure  1, are to secure compliance. The sole provisions 
pinpointed by Indonesia in its argumentation pertained to  its Customs Law and consist ed of 
Article  1(1), which includes a definition of the term "customs " as "everything related to monitoring 
over flow of goods in or out of customs area and collection of import duty and export duty "; and 
Consideration  (c) in its  Preamble which, according to Indonesia, stipulates that its implementation 
is intended to guarantee greater legal certainty, support the smooth flow of goods, and increase 
effective monitoring of the flow of goods into or out of Indonesian customs areas.1749 In our view, 
both provisions do not include specific rules, obligations or requirements. For all the other four 
legal instruments listed by Indonesia and present in our records, Indonesia has not specified any 
relevant rules, obligations, or requirements.   
7.584.   We observe that all these l aws and regulations deal with a vast  array of issues, some being 
very extensive  with numerous articles , as is the case of the Customs Law1750 or Law 16/1992 .1751 
We recall that it is incumbent upon the respondent, and not the Panel, to identify "specific " rules, 
obligations or re quirements contained in the WTO-consistent  laws or regulations .1752 This is of 
crucial importance to allow the Panel to elucidate how and why the measure at issue secures 
compliance with such laws or regulations.  Indeed, a measure can be said to secure comp liance 
with laws or regulations when its design reveals that it secures compliance with specific rules, 
obligations, or requirements under such laws or regulations.1753 Without the respondent identifying 
such speci fic rules, obligations or requirements in WTO -consistent laws or regulations, the Panel 
cannot perform the relevant analysis.  
7.585.   We therefore conclude that Indonesia has failed to identify specific rules, obligations, or 
requirements contained in WTO-consist ent laws or regulations  and has therefore not demonstrated 
that Measure  1 is provisionally justified under subparagraph  (d) of Article  XX of the GATT  1994. 
We therefore refrain from continuing our analysis under this provision.  
7.3.5.2.4   Conclusion  
7.586.   In the light of t he foregoing, we find that Indonesia has failed to demonstrate that 
Measure  1 is justified under Article  XX(d) of the GATT  1994. 
                                                
1749 We note that Indonesia referred to Consideration (a) in  its oral statement. However, Consideration 
(a) reads that "the Unitary State of the Republic of Indonesia is a country based on Pancasila and Constitution 
of 1945 with the purpose to create a safe, orderly, and national welfare based on justice". We thus think that 
Indonesia meant to refer to Consideration (c) that reads: "that, in an effort to guarantee more legal certainty, 
justice, transparency and accountability of public services, to support efforts of improvement and enhancement 
of national economy i n relation to global trade, to support smooth flow of goods, and to increase effective 
monitoring over flow of goods into or out from Indonesian customs area, and to maximize prevention of and 
action taking against smuggling, better regulations are heeded for customs operations".  
1750 Indonesia's Customs Law include over a 100 articles and deals with very different matters such as 
export declarations (art. 10), transportation of goods within Indonesia (art. 11), tariffs and import duties (arts. 
12-17), anti -dumping and countervailing duties (arts. 18 -23), storage of products under customs supervision 
(arts. 42 -48), IPR infringement (arts. 54 -64), and the customs appeal process (arts. 93 -101).  United States ' 
oral statement at the second substantive meeting, para s. 57-58. 
1751 This regulation includes over 60 provisions.  
1752 Appellate Body Report, Argentina – Financial Services , para. 6.203. (fns omitted)  
1753 Appellate Body Report, Argentina – Financial Services , para. 6.203. (fns omitted)  WT/DS477/R • WT/DS478/R  
 
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  7.3.6   Whether Measure  2 (Periodic and fixed import terms ) is justified under 
Article  XX(d) of the GATT  1994  
7.3.6.1   Arguments of the parties  
7.3.6.1.1   Whether Measure 2 is provisionally justified under subparagraph  (d) of 
Article  XX of the GATT  19941754 
7.3.6.1.1.1   Indonesia  
7.587.   Indonesia  considers that specifying import licence terms in advance is necessary for the 
purposes of national customs enforcement. As such, Indone sia maintains that, as a developing 
country, Indonesia has limited resources to devote to customs enforcement. Importantly, the 
measure gives national customs authorities an opportunity to allocate limited resources 
accordingly in a situation where coordin ation of government effort across the vast archipelago 
requires a significant amount of advance planning.1755 In addition, Indonesia also argues that the 
measure allows it to "partner  with importers to ensure safe and efficient customs 
administration ".1756 Elabo rating on the necessity element, Indonesia contends that the fixed 
licence terms requirement facilitates the work of customs officials in assessing customs 
classification, import eligibility, and collecting information for statistical purposes. In this con text, 
Indonesia submits that fixed licence terms serve customs enforcement. Indonesia's Central Bureau 
of Statistics receives information from the applications mandated by the fixed licence terms 
requirement. The importance of information gathering is refl ected in Article 1(1) of Law 
No. 17/2006 which states that customs is "everything related to monitoring over flow of 
goods ".1757 
7.3.6.1.1.2   New Zealand  
7.588.   New Zealand contends that Indonesia's defence  does n ot meet the standard of 
Article  XX(d) of the GATT 1994. As outline d above in relation to Measure 1, New Zealand finds that 
Indonesia has not demonstrated that customs enforcement is in fact the objective being pursued 
by fixed licence terms. New Zealand thus reiterates its arguments as they relate to: Indonesia's 
listing  of a few titles of laws and regulations relating to customs, quarantine and food safety that it 
says are included among "[t]he WTO -consistent laws and regulations " with which the measure is 
designed to secure compliance; its failure to identify the specif ic provisions in the customs 
enforcement laws and regulations it claims the fixed licence terms are designed to secure 
compliance with; and its failure to establish that the measure was adopted to secure compliance 
with laws and regulations relating to cus toms enforcement.  Likewise, New Zealand holds that, 
even if the first element of Article XX(d) were satisfied, the "necessary " standard would not be met 
due to Indonesia's failure to demonstrate how the measure contributes to the objective of securing 
comp liance with those laws and regulations.1758 
7.589.   Responding to Indonesia's claims that the measure is intended to give customs authorities 
an opportunity to allocate resources, New Zealand counters that the measure requires that certain 
terms, such as the country of origin, are fixed and cannot be amended for the length of the 
validity period. In New Zealand's view, fixing  the country of origin of projected imports over six 
months does not meet the need claimed by Indonesia to allocate customs resources. Furthermor e, 
the customs regime and horticultural import licensing regime appear to be completely independent 
and operated by separate entities. Thus, it is not clear to New Zealand how the operation of the 
import licensing regime could contribute to enforcement of a separate customs regime.1759 
Weighing the lack of contribution of the measure to the objective in Article XX(d) against the 
trade -restrictiveness of this measure , New Zealand submits that Indonesia has failed to discharge 
its burden of establishing that the  measure is necessary to secure compliance with customs 
laws.1760  
                                                
1754 For the general arguments c oncerning this step in Indonesia's defence under Article XX(d) of the 
GATT  1994, see Section  7.3.5.1.1  above.  
1755 Indonesia 's first written submission, para. 140; Indonesia 's first opening statement, para. 31; 
Indonesia 's second written submission, para. 207.  
1756 Indonesia 's first opening statement, para. 8.  
1757 Indonesia 's second written submission, paras. 241 and 243.  
1758 New Zealand 's second written submission, paras. 203 -205. 
1759 New Zealand 's second written submission, para. 205.  
1760 New Zealand 's first written submission, paras. 224 -226; second written submission, para. 206.  WT/DS477/R • WT/DS478/R  
 
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  7.590.   Consequently, New Zealand does not consider that it needs to elaborate on a less trade -
restrictive alternative measure. However, for the sake of argument, New Zealand suggests that a 
fully aut omatic import licensing regime would allow importers to apply on any day to import 
products of any type, quantity, and country of origin, providing Indonesia with more information 
about the products to be imported, and be  simpler to administer and be less trade -restrictive than 
the current import licensing regime.1761 New Zealand takes note of Indonesia's expanded 
argumentation in its second written submission, stating that the purpose of the fixed licence terms 
is to "oblige importers to include information s uch as port of entry, volume, etc. in order for the 
customs officials to assess customs classification and import eligibility " and to "gather information 
for statistical purposes ".1762 In New Zealand's view, however, Indonesia could readily obtain better 
information from existing data collection processes.1763 
7.3.6.1.1.3   United States  
7.591.   The United States argues that Indonesia's explanations of the relationship between the 
challenged measures and customs enforcement do not meet the necessary standard.1764  The 
United States fails  to see how the fixed licence terms make any contribut ion to securing 
compliance with customs enforcement, let alone one rising to the level of "necessary. "1765 In the 
United States' view, the measure is not a schedule of what products will be imported when a nd 
where, such that Indonesia could use the fixed licence terms to allocate its customs resources. 
Rather, it is a restriction on all the products that could possibly be imported during a given period: 
importers are required to predict in advance precisely  the type, quantity, and country of origin of 
all the products that they want to import for the coming import period of six or three months, and 
are then prohibited from importing products any different from those they applied to import, or 
from applying f or additional import permits. According to the United States, such high level of 
trade -restrictiveness is not in proportion to any minimal contribution the measure could 
theoretically make to customs enforcement.1766  
7.592.   The United States suggests that a reasona bly available and less trade -restrictive 
alternative would consist in allowing importers to apply for truly automatic licences to import 
products of the chosen type, quantity, or country of origin. Furthermore, allowing importers to 
adjust this information  based on market considerations would ensure its accuracy and timeliness. 
The United States considers that this would give Indonesia better information about the products 
to be imported; require fewer resources to manage; and eliminate the trade -restrictiv eness of the 
measure by allowing importers to take timely import decisions based on commercial considerations 
and current market conditions.1767 As the United States explained with respect to Measure 1 above, 
the Indonesian offices responsible for processing import licence applications are not the same as 
those responsible for customs enforcement. In its view, even if the fixed licence terms 
requirements did make processing import permit applications easier , it is unclear how that would 
make any contribution t o the objective of customs enforcement.1768 The United States thus 
submits that, even if Indonesia had identified a WTO -consistent law or regulation relating to 
customs enforcement with which the fixed licence terms are supposedly "necessary to secure 
complia nce", and even if the Panel found that the measure was designed to secure compliance 
with that law or regulation, the measure still could not be justified as meeting the "necessary " 
standard with respect to this objective. 1769 
7.3.6.1.2   Whether Measure  2 is applied in  a manner consistent with the chapeau  of 
Article XX  
7.593.   Concerning the parties' arguments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
                                                
1761 New Zealand 's second written submission, paras. 206 -207. 
1762 Indonesia 's second written submission, para. 243.  
1763 New Zealand 's opening statement at the second  substantive meeting, para. 64 ( referring to its 
second written submission, para. 105 ). 
1764 United States ' second written submission, paras. 142 -146. 
1765 United States ' second written submission, para. 143.  
1766 United States ' second written submission, para. 143.  
1767 United States ' second written submission, para. 144.  
1768 United States 's second written submission, para. 145.  
1769 United States ' second written submission, para. 146.  WT/DS477/R • WT/DS478/R  
 
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  7.3.6.2   Analysis by the Panel  
7.594.   We have found in Section  7.3.5.2.3 above  that Indonesia has failed to identify specific 
rules, obligations, or requirements contained in WTO -consistent laws or regulations for the 
purpose of its defence under Article  XX(d) of the GATT  1994. Given that Indonesia 's arguments 
concerning the identification of WTO -consistent laws or regulations for the purpose of its defence 
under Article  XX(d) of the GATT  1994 were submitted with respect to all the relevant measures at 
issue, including Measure  2, we find that Indone sia has not demonstrated that Measure  2 is 
provisionally justified under subparagraph  (d) of Article  XX of the GATT  1994.  
7.595.   We therefore find that Indonesia has failed to demonstrate that Measure  2 is justified 
under Article  XX(d) of the GATT  1994. 
7.3.7   Whether Measure  3 (80% realization requirement) is justified under Article  XX(d) 
of the GATT  1994 
7.3.7.1   Arguments of the parties  
7.3.7.1.1   Whether Measure 3 is provisionally justified under subparagraph  (d) of 
Article  XX of the GATT  19941770 
7.3.7.1.1.1   Indonesia  
7.596.   Indonesia claims that the 80% r ealization requirement is necessary to its customs 
enforcement.1771 Indonesia sustains that the measure is fair, balanced, and narrowly constructed 
to fulfill Indonesia's legitimate objective of administrative efficiency through import licensing. 
According to  Indonesia, the measure is a safeguard against importers grossly overstating 
anticipated imports. Notably, the measure helps address Indonesia's concerns over the impacts 
that overstatement of imports might have on its ability to guarantee proper quarantin e and food 
safety inspection procedures as a first -level defence against the transmission of diseases through 
the food supply. Indonesia observes that the realization requi rement, which existed under 
MOT 16/2013 for perishable horticultural products, did n ot apply "across the board " to other 
products because the same risks to the domestic food supply were not present. 1772  
7.597.   Elaborating on the link between the 80% realization requirement and Indonesia's ability to 
guarantee proper quarantine procedures, Indones ia confirms that the measure was designed to 
ensure that importers adhere to the terms specified in their import licence applications.  This in 
turn guarantees that the Indonesian government has reliable information upon which to base its 
resource allocatio n decisions, including those related to provision of resources to ensure proper 
quarantine procedures (e.g. staffing and training at various ports of entry).1773 As a developing 
country with limited resources to assign to import administration, Indonesia reli es on estimates of 
expected trade volumes corresponding to each validity period. Indonesia argues that the measure 
balances the need to induce importers to submit realistic estimates of anticipated import 
quantities, and the need for a reasonable margin of  error before penalties are applied.1774 Hence, 
Indonesia argues that the 80% realization requirement supplements Measures 1 and 2 above: as 
the precise terms of importation have been established, this measure is implemented to ensure 
that importers do not de viate from the information submitted in response to the fixed licence 
terms requirement.1775 Explaining how the mentioned food safety risks are currently managed, i.e. 
after the measure was terminated under MOT 71/2015, Indonesia notes that the Indonesian 
government has not yet adopted alternative measures, although it is monitoring the impact of the 
repeal of the 80% realization requirement on importer behaviour.1776 
                                                
1770 For the general arguments concerning this step in Indonesia's defence under Article XX( d) of the 
GATT  1994, see Section  7.3.5.1.1  above.  
1771 Indonesia 's first written submission, para. 145; response to Panel question No.  32(b).  
1772 Indonesia 's response to Panel question No.  32. 
1773 Indonesia 's response to Panel que stion No.  95. 
1774 Indonesia 's first written submission, para. 142.  
1775 Indonesia 's second written submission, paras. 241 and 244.  
1776 Indonesia 's response to Panel question No.  96. WT/DS477/R • WT/DS478/R  
 
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  7.3.7.1.1.2   New Zealand  
7.598.   New Zealand argues that Indonesia's argumentation does not met the standard of  
Article XX(d) of the GATT 1994. First, Indonesia has not demonstrated that customs enforcement 
is the objective of the 80% realization requirement; and has not identified the specific "laws or 
regulations " with which the measure is "necessary to secure complian ce"; and has not pointed to 
any specific provisions of the relevant legal instruments, or to any other official documents, 
showing that the measure was adopted to promote the objective of customs enforcement. Thus, 
New Zealand contends that the design and structure of the measure does not lend any support to 
Indonesia’s Article XX(d) argument.1777 
7.599.   Rather, in New Zealand's view, the design of the 80% realization requirement measure 
suggests an import -limiting objective: combined with the fixed licence terms, th e measure creates 
an environment which induces importers to limit the quantities they import, particularly because of 
the sanctions that can be imposed for non -compliance.1778 Furthermore, Indonesia's incomplete 
responses to Panel Questions1779 confirm that the 80% realization requirement only applies in 
respect of 22 fresh and 17 processed horticultural products.1780 Indonesia does not explain why 
the same requirement does not apply to the non -listed horticultural products which might cause 
similar quarantine conce rns. According to New Zealand, such inconsistent application of the 
measure also suggests that its real purpose is to protect local producers in furtherance of 
Indonesia's self -sufficiency laws, rather than to secure compliance with customs or quarantine 
laws. 
7.600.   New Zealand maintains that, even if the first element of Article XX(d) were established, 
Indonesia has not explained why the measure is "necessary to secure compliance " with such laws 
or regulations. In New  Zealand’s view, the relationship between the  80% realization requirement 
and the interests Indonesia claims to protect is insufficient. Even assuming, arguendo , that 
importers did overstate the quantity requested on the import approval, if the overstated quantity 
were not imported, this would not im pose an additional burden on customs enforcement according 
to New Zealand.1781 As Indonesia has not shown how the measure contributes to, or is necessary 
to meet, the objective in Article XX(d), New Zealand submits that little weight can be given to 
these fac tors in analyzing whether the measure is "necessary ". In New  Zealand’s view, the trade -
restrictiveness of the measure outweighs any minimal contribution it may make towards the 
objectives in Article XX(d).1782 Further, in view of Indonesia's failure to establ ish that the 80% 
realization requirement was adopted for the cited objective, New Zealand does not consider it 
necessary to elaborate on a less trade -restrictive alternative measure. However, New  Zealand 
observes that a less restrictive and readily availab le measure would be, for example, using 
information already supplied on customs forms to obtain data on anticipated import quantities. 
Such information would be more precise because it would relate to the actual quantity in a specific 
shipment, rather than  the estimated quantity over an entire validity period.1783 
7.3.7.1.1.3   United States  
7.601.   The United States argues that  Indonesia refers to general objectives, such as proper 
quarantine procedures and "other administrative concerns, " without identifying the 
WTO-consistent la w or regulation with which the realization requirement is allegedly securing 
compliance.1784 Indonesia has not provided any evidence that a problem with importers grossly 
overstating their anticipated imports exists, or explained how, if such a problem did ex ist, this 
would impose a burden on customs officials. Even assuming that an importer overstated the 
requested quantity on its import approval application, Indonesia’s argument presumes that he 
would not be importing a large volume of horticultural products . Thus, to the United States, 
                                                
1777 New Zealand 's second written submission, para. 213.  
1778 New Zealand 's second writ ten submission, para. 214. New Zealand 's first written submission, 
paras.  228–236. 
1779 New Zealand 's response to Panel question No. 97 ( commenting on Indonesia 's response to Panel 
question N o. 32, paras. 11 -12). 
1780 Horticultural products listed in Attachment II, MOA 86/2013 (Exh ibit JE -15) and Appendix I, 
MOT 16/2013 (Exhibit JE -8). 
1781 New Zealand 's second written submission, para. 215.  
1782 New Zealand 's second written submission, para. 216.  
1783 New Zealand 's second written submission, para. 220.  
1784 United States ' response to Panel question No. 97, para. 71 ( referring to United States ' oral 
statement at the second substantive meeting, paras. 55 -58; Indonesia 's first written submission, paras. 1 36, 
140,142 -145, 149, 160, 163; second written submission, para. 244 ). WT/DS477/R • WT/DS478/R  
 
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  overstatement would not necessarily mean any increased burden on the customs officials 
processing imports.1785  
7.602.   Concerning the alleged misallocation of limited resources as a result of overstatement, the 
United States considers t hat this argument is based on the assumption that the import licensing 
requirements operate to provide customs officials with appropriate information about planned 
imports.1786 However, as highlighted above in relation to Measures 1 and 2, this is not the cas e: 
importers are not required to provide details on precisely when and where products will be 
imported; rather, like the fixed licence terms requirement, the realization requirement is simply a 
quantitative restriction, forcing importers to reduced their p lanned imports. According to the 
United States, no evidence has been presented showing that customs officials obtain any 
information at all from the realization requirement, on when and where imports will occur such 
that they could make appropriate resourc e allocation decisions.  Second, no evidence is presented 
to substantiate Indonesia's claim that overstatements in relation to proper quarantine procedures 
and other administrative issues  were a factor driving the establishment of the realization 
requiremen t.1787 No evidence is advanced from the text, structure, or history of Indonesia' s import 
licensing regulations suggesting that they were introduced to address any quarantine or inspection 
problems. Moreover, Indonesia did not refute the evidence submitted by  the co -complainants 
showing that the actual purpose of the import licensing regime is to protect domestic producers 
from competition from imports.1788 Third, in the light of WTO jurisprudence1789, Indonesia’s 
articulation of the relationship between the measure  and its purported objectives does not meet 
the "necessary to secure compliance " standard.1790Indonesia’s statements about the operation of 
the realization requirement and how it could contribute to resource allocation for food safety 
inspections, made in the  context of Indonesia’s Article XX(d) defence, lack any evidentiary basis 
and are premised on an incorrect understanding of how the requirements operate.1791 These 
defects in evidence and reasoning would apply equally to an Article XX(b) defence relating to f ood 
safety.  Even if substantiated, the United States argues that Indonesia’s assertion that "concern " 
about the impact of overstatement would not m eet this "necessary " standard. For the United 
States, Indonesia's argument1792 must fail even if Indonesia were able to satisfy the first element 
of Article  XX(d).1793   
7.603.   Further, the United States holds that any overestimation problem (and noting that 
Indonesia has not presented evidence that one exists) would not exist without the application 
windows and validity peri ods and the fixed licence term requirements imposed by the import 
licensing regimes. That is, if importers were not prohibited from applying for additional permits 
once a period started, or from importing products other than those specified on their permit s, 
there would be no incentive for over -estimation, and in fact, no need for estimation at all, as 
importers could seek permits based on their actual imports. The United States thus considers that 
a less trade -restrictive and more accurate way to collect i nformation on import volumes would be 
to allow importers to apply for permits at any time prior to customs clearance, and on a rolling 
basis. The United States argues that, if Indonesia removed the challenged measures at issue in 
this dispute, all of which  restrict importation, such would almost certainly provide more accurate 
                                                
1785 United States ' second written submission, para. 148.  
1786 United States ' second wr itten submission, para. 149 ( referring to Indonesia 's response to Panel 
question No.  50). 
1787 United States ' response to Panel question No.  97, paras. 72 -73. 
1788 United States ' respo nse to Panel question No. 97, para. 72 ( referring to its second written 
submission, para. 133 ). 
1789 The United States referred to the Appellate Body Report s, Brazil – Retreaded Tyres , para. 210;  EC – 
Seal Products , para. 5.180 (referring to Panel Report,  EC – Seal Products , para. 7.633, ruling that, for a 
measure to be "necessary " to its covered objective, it must make a contribution to that objective - i.e. there 
must be a "genuine relationship of ends and means " between the measure and the objective ); Korea  – Various 
Measures on Beef , para. 161; Brazil – Retreaded Tyres , para. 141 ( clarifying that the contribution must be 
"significantly closer to the pole of 'indispensable ' than to the opposite pole of simply 'making a contribution 
to.'"); Korea – Various Me asures on Beef , paras. 161 -163; Brazil – Retreaded Tyres , para. 141;  EC – Seal 
Products , para. 5.169 ( clarifying that the contribution must be assessed in light of the measure 's trade -
restrictiveness ). 
1790 United States ' response to Panel question No.  97, pa ra. 73, referring to United States ' oral 
statement at the second substantive meeting, paras. 65 -66; United States ' second wri tten submission, 
paras.  147-151. 
1791 United States ' comments on Indonesia 's response to Panel question No. 115,  referring to its seco nd 
written submission, paras. 147 -151; and United States ' response to Panel question No.  97, paras. 69 -74. 
1792 See Indonesia 's first written submission, paras. 142, 145, 163; Indonesia 's oral statement at the 
first substantive meeting, paras. 22, 31; Indones ia's response to Panel question No.  50, para. 32.  
1793 United States ' second written submission, paras. 147 –152. WT/DS477/R • WT/DS478/R  
 
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  and timely information regarding importation.1794 The United States contends that any marginal 
contribution the realization requirement could make to saving customs resources must be wei ghed 
against the highly trade restrictive nature of the measure, which induces importers to reduc e the 
quantity sought on their I mport Approval, thereby restricting overall import volumes for every 
import period.1795 The United States recalls that the measure  also makes importers who do not 
meet the requirement ineligible  to import in future periods. Such a trade-restrictive measure would 
be outweighed only by a significant contribution to the covered objective.1796 
7.3.7.1.2   Whether Measure  3 is applied in a manner consis tent with the chapeau  of 
Article XX  
7.604.   Concerning the parties' arguments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
7.3.7.2   Analysis by the Panel  
7.605.   We have found in Section  7.3.5.2.3 above  that Indonesia has failed to identify specific 
rules, obligations, or requirements contained in WTO -consistent laws or regulations for the 
purpose of its defence under Article  XX(d) of the GATT  1994. Given that Indonesia's arguments 
concerning the identification of WTO -consistent laws or regulations for the purpose of its defence 
under Article  XX(d) of the GATT  1994 were submitted with respect to all the relevant measures at 
issue, including Measure  3, we find that Indonesia has not demo nstrated that Measure  3 is 
provisionally justified under subparagraph  (d) of Article  XX of the GATT  1994.  
7.606.   We therefore find that Indonesia has failed to demonstrate that Measure  3 is justified 
under Article  XX(d) of the GATT  1994. 
7.3.8   Whether Measure  4 (Indon esia's harvest period requirements) is justified under 
Article  XX(b) of the GATT  1994  
7.3.8.1   Arguments of the parties  
7.3.8.1.1   Whether Measure  4 is provisionally justified under subparagraph  (b) of 
Article  XX of the GATT  19941797 
7.3.8.1.1.1   Indonesia  
7.607.   Indonesia argues that its import li censing regime is necessary to protect public health as 
contemplated by subparagraph (b) of Article XX of the GATT 1994 .1798 According to Indonesia, its 
import licensing regulations clearly state that one of the objectives is to fulfill food safety 
requiremen ts and to establish quality and nutrition requirements for food for consumption.1799 
Indonesia submits that MOT 71/2015 and MOA 86/2013 for horticultural products and MOT 5/2016 
and MOA 58/2015 for animals and animal products as a whole were enacted to protec t food safety 
for human consumption.1800 In Indonesia's view, the WTO jurisprudence has clearly established the 
importance that Members assign to national autonomy in protecting health, as well as their right to 
determine the level of health protection they d eem appropriate, as confirmed by the public health 
exception in subparagraph (b).1801  
7.608.   Specifically with respect to Measure  4, Indonesia submits that it  is justified by  Article  XX(b) 
of the GATT  1994 and contends that, given the prevailing equatorial climate,  the oversupply of 
fresh horticultural produce in a particular region of its vast archipelago could have disastrous 
                                                
1794 United States ' second written submission, para. 150.  
1795 United States ' secon d written submission, para. 151 (referring to  United States ' first wr itten 
submission, paras. 171 -174, 284 -287; Exh ibits USA-21 and USA -28).  
1796 United States ' second written submission, para. 151.  
1797 For the general arguments concerning this step in Indonesia's defence under Article XX(d) of the 
GATT  1994, see Section  7.3.5.1.1  above.  
1798 Indonesia 's opening statement at the second substantive meeting, para. 33 .  
1799 Indonesia 's opening statement at the second  substantive meeting, para. 32 ( referring to Article 4(b) 
and Article 37 of Law 18/2012, Exhibit IDN -6.)  
1800 Indonesia 's opening statement at the second substantive meeting, para. 32 .  
1801 Indonesia 's second  written submission, para. 104 (referring to  Exhibit IDN -48 and Appellate Body 
Report, EC – Asbestos , para. 172; Indonesia 's opening statemen t at the second substantive meeting, para. 
30). WT/DS477/R • WT/DS478/R  
 
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  health consequences due to the accelerated rate of decomposition and the risk posed by the 
spread of pathogenic bacteria. According to Indon esia, in the absence of national coordination of 
imports with domestic harvest times, stockpiles of "rotting fresh " horticultural products are likely 
to cause serious public health threats. Indonesia considers that it is taking a proactive approach 
against  such risks by ensuring that imports are re -directed within its territory during domestic 
harvest periods. In that sense, Indonesia denies prohibiting or restricting imports of horticultural 
products.1802 Rather, it argues, Indonesia is regulating the timing of imports, taking account of 
domestic harvest periods, in order to protect Indonesian citizens from public threats.1803 
7.3.8.1.1.2   New Zealand  
7.609.   For New Zealand, Indonesia has presented no pertinent evidence to show that its 
measures contribute to food safety objectives  under Article XX(b) of the GATT 1994; e ven if it had, 
Indonesia has failed to establish that any of its measures were necessary to the achievement of 
that objective, or that they satisfy the chapeau of Article XX.1804 In this regard, New Zealand notes 
that I ndonesia's defence takes the form of a series of statements that five of its measures were 
enacted to protect food safety for human consumption, allegedly showing that its regulations "as a 
whole " were enacted to protect food safety.1805 New Zealand submits t hat such statements can be 
taken into account as Indonesia's articulation of the objective of its measures but that the Panel is 
not bound by Indonesia's characterization and must make its own determination based on the 
evidence.1806 New Zealand argues furthe r that the exhibits supplied by Indonesia in support of 
each of its assertions do not show that Indonesia enacted the measures to protect food safety for 
human consumption.1807   
7.610.   Specifically with respect to Measure  4, New Zealand submits that Indonesia's mer e 
assertion that the objective of the measure is public health is insufficient to satisfy the first 
element of Article XX(b).1808 According to New Zealand, nothing in the design or structure of the 
measure indicates that it was adopted or enforced to protect human health; and Indonesia has 
produced no evidence that "stockpiles of rotting horticultural products " have previously resulted, 
or would result in the future, from imports during domestic harvest seasons or that this was the 
reason for introducing the m easure. New Zealand argues that the evidence it has presented rather 
shows that the real reason for the measure is to protect domestic farmers from import 
competition.1809  
7.611.   In New Zealand's view, even if the first element of Article XX(b) were satisfied, ther e is no 
evidence that the measure is "necessary " to protect human health, contrary to Indonesia’s claims. 
While agree ing that the protection of human health from food -borne disease is an important 
objective, New Zealand maintains  that Indonesia has not est ablished that the measure contributes 
to that objective, let -alone that it makes a material contribution to that objective, as is required 
when a measure produces restrictive effects on international trade as severe as those resulting 
from an import ban.1810 New Zealand argues that the measure is disproportionately trade -
restrictive in relation to the objective now claimed. Imports of certain horticultural products have 
been completely banned, as New Zealand has showed1811, rather than "redirected elsewhere in 
Indonesia " as Indonesia claims.1812 Therefore, New Zealand considers that it is not required to 
elaborate on an alternative measure. However, even if the measure made some contribution to 
human health, a less trade -restrictive alternative would be for Indonesia  to rely on market forces 
to resolve any issues of over -supply, and mitigat e the hypothetical risk identified by Indonesia in a 
less trade restrictive manner.1813 
                                                
1802 Indonesia 's first written submission, para. 155; Indonesia 's second written submission, para. 222.  
1803 Indonesia 's second written submission, paras. 222 -223. 
1804 New Zealand 's response to Panel question No.  123. 
1805 Indonesia 's second written statement, para. 110; Indonesia 's oral statement at the second 
substantive meeting, para. 33.  
1806 Appellate Body Report, EC – Seal Products , para. 5.144.  
1807 New Zealand 's response to Panel question No.  123, referring to Exhibits  IDN-53 to IDN -59. 
1808 New Zealand 's second written submission, para. 228, referring to  Appellate Body Report, EC – Seal 
Products , para. 5.144.  
1809 New Zealand 's first written submission, para. 2 37, referring to Exhibit NZL -73. 
1810 New Zealand 's second written s ubmission, para. 229, referring to  Appellate Body Report, Brazil – 
Retreaded Tyres , paras. 150 -151. 
1811 New Zealand 's first written submission at para. 23 8, referring to Exhibit NZL –39. 
1812 New Zealand 's second written submission, para. 230, referring to Indon esia's first written 
submission, para. 155.  
1813 New Zealand 's second written submission, paras. 231 -232. WT/DS477/R • WT/DS478/R  
 
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  7.3.8.1.1.3   United States  
7.612.   According to the United States, Indonesia has not met any of the element s of the test 
under Article  XX(b)  with respect to any of its defence s, despite asserting  in its second written 
submission, that its import licensing regimes, as a whole, and seven of the individual 
requirements, are necessary to protect human health under Article X X(b) of the GATT  1994 
because they are food safety measures .1814 With respect to the first element of Article XX(b), the 
United States questions that the challenged measures are food safety measures merely because 
the import licensing regulations refer to the  Food Law1815, and argues that the text of the Law does 
not le nd support to such an assertion1816 because:  (i) the Food Law is a broad statute that covers 
a variety of topics1817 and the title of Part 5, the text, structure and operation of the import 
licensing reg imes, and statements by Indonesian officials, all show that this is th e section that is 
relevant to Indonesia’s import licensing regimes1818; (ii) while fo od safety is covered in Chapter  VII 
of the Food Law, Indonesia has submitted no evidence tying the impor t licensing regimes to the 
requirements of that Chapter1819;(iii) the list enumerating the 13 legal instruments adopted by 
Indonesia to promote food safety and security do not include the import licensing regulations.1820 
In the United States' view, Indonesia ha s simply asserted that the objective of the measure is 
protecting human health, but has introduced no evidence substantiating that assertion.1821 Hence, 
Indonesia has failed to justify its import restricting measures, as a whole, or as individual 
measures, be cause, other than unsupported post hoc  assertions, it has not provided any evidence 
that demonstrates that the objective pursued by its measures is to protect food safety or that the 
measures are necessary to protect fo od safety.1822  
7.613.   Specifically with respec t to Measure  4, the United States contends that Indonesia’s 
arguments do not satisfy the elements of a defence under Article XX(b). Indonesia has not 
demonstrated that the seasonal restrictions on horticultural products pursue the objective of 
protecting h uman health, let alone that they are "necessary " to such an objective.1823 In relation to 
the "objective pursued by " the measure, the United States takes note of Indonesia's reference to 
the Food Security Council's publication of "regular points summarizing i ts goals and directives, " 
which are allegedly considered by the Ministry of Agriculture in determining when importation of 
particular products is permitted.1824 However, the United States also notes that this exhibit does 
not refer to the Ministry of Agricult ure’s seasonal restrictions on importation or to over -supply of 
horticultural products at all.1825 The United States asserts that the co -complainants have 
demonstrated that the actual purpose of the measure, and the basis on which the Ministry of 
Agriculture implements the seasonal restrictions, is the protection of domestic producers from 
competition with imported products.1826 For example, in a letter dated 3 December 2015 to the 
head of the Indonesia Horticultural Products Importers Association, the Ministry o f Agriculture 's 
Director of General of Horticulture stated that "commodities not produced domestically may be 
imported " during the 2016 RIPH issuance period.1827 The letter also discussed the domestic 
production of oranges and called for prioritizing the use of oranges of domestic origin to supply the 
demand during Chinese New Year.1828 Subsequent letters confirmed that oranges cannot be 
                                                
1814 United States ' oral statement at the secon d substantive meeting, para. 42 ( referring to Indonesia 's 
second written submission, paras. 89 and 207(b) ). 
1815 See Indonesia 's first written submissions, paras. 107 -111. 
1816 United States ' oral statement at the second substantive meeting, para. 43.  
1817 United States ' oral statement at the second substantive meeting, para. 44 . 
1818 United States ' oral statement at the sec ond substantive meeting, para. 44; second written 
submission, paras. 133, 172; firs t written submission, paras. 16 and  84-85. 
1819 United States ' oral statement at the second substantive meeting, para. 44.  
1820 Exhibit IDN -25. 
1821 United States ' second written sub missio n, para. 171 (referring to  EC – Seal Products , para. 5.144 
(stating that panels "should take into account the Member 's articulation of the objective or the objectives it 
pursues through its measures, but it is not bound by that Member 's characterizat ion of such objective(s) ")). As 
the Appellate Body has recognized, a bare assertion of the measure 's objective does not satisfy the first 
element of Article XX(b).  
1822 United States ' response to Panel question No.  123. 
1823 United States ' second written submiss ion, paras. 170 and 175.  
1824 United States ' second  written submission, para. 171 ( referring to Indonesia 's response to Panel 
question No.  17). 
1825 United States ' second  written submission, para. 171 ( referring to Exhibit IDN -25). 
1826 United States ' second writte n submission, para. 172.  
1827 Exhibit USA -70. 
1828 Exhibit USA -70. WT/DS477/R • WT/DS478/R  
 
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  imported during January.1829 Other Indonesian ministers have also confirmed that the purpose of 
the harvest period restriction is to "protect local horticultural products ".1830 
7.614.   According to the United States, even if the first element of Article XX(b) were satisfied, the 
restriction would not meet the "necessary " standard.1831 Although Indonesia asserts that 
oversupply of fresh horticultur al products "could have disastrous consequences, " it has not 
presented any evidence showing that oversupply either occurs or has any negative consequences 
for human health. Thus, the United States argues that it is not clear that the measure would make 
any "contribution " to its purported objective. Without a "genuine relationship of ends and means " 
between the measure and the objective, a measure is not "necessary " to the achievement of that 
objective.1832 Even if the measure made some contribution to the prot ection of human health, the 
United States sustains that several less trade -restrictive alternative measures are available.1833 As 
Indonesia has not justified the measure as challenged by the co-complainants, in that the Ministry 
of Agriculture exercises autho rity to prohibit completely into all regions the importation of 
horticultural products, based on their harvest period1834, the United States suggests confining 
harvest period restrictions to those regions in which the harvest was occurring. As no evidence 
was presented  to show the occurrence of over supply, or that over -supply would not be resolved by 
market forces, another suggestion would be to eliminate the seasonal restrictions and allow 
market forces to resolve any oversupply situation.1835 
7.3.8.1.2   Whether Measure  4 is applied in a manner consistent with the chapeau  of 
Article XX  
7.615.   Concerning the parties' arguments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
7.3.8.2   Analysis by the Panel  
7.3.8.2.1   Introduction  
7.616.   The task be fore the Panel is to determine whether Measure  4 (Harvest period requirement ) 
is justified under Article XX(b) of the GATT  1994. We commence with the text of the relevant 
provision and the ensuing legal standard.  
7.3.8.2.2   The relevant legal provision  
7.617.   Article XX of the GATT 1994 reads, in relevant part, as follows:  
Article XX  
General Exceptions  
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between countries 
where t he same conditions prevail, or a disguised restriction on international trade, 
nothing in this Agreement shall be construed to prevent the adoption or enforcement 
by any Member of measures:  
 (a) ... 
 (b) necessary to protect human, animal or plant life or health;  
… 
                                                
1829  Exhibits USA -71 and USA -72. 
1830 Exhibits US A-13 and USA-14. 
1831 United States ' second written submission, para. 173.  
1832 United States ' second written submission, para. 173, referring to  Appellate B ody Reports, Brazil – 
Retreaded Tyres , para. 210; EC – Seal Products , para. 5.180 ( referring to Panel Report,  EC – Seal Products , 
para. 7.633).  
1833 United States ' second written submission, para. 174.  
1834 United States ' second written submission, para. 174, re ferring to its f irst written submission, 
paras.  180-181; Article 5 of MOA 86/2013, Exhibit JE -15; and Exhibits US A-70 and USA-71. 
1835 United States ' second written submission, para. 174.  WT/DS477/R • WT/DS478/R  
 
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  7.618.   As we explained in Section  7.3.5.2.2 above , the assessment of a claim of justification 
under Article  XX involves a two -tiered analysis in which a measure must (i) be provisionally 
justified under one of the subpara graphs of Article XX , in this case subparagraph (b) , and then 
(ii) analysed under the chapeau  of Article XX.1836 As we explained before, in order to justify an 
otherwise WTO-inconsistent  measure, the Member invoking a subparagraph of Article  XX as a 
defence b ears the burden of establishing that the conditions prescribed therein are met.1837 
Therefore, it is incumbent upon Indonesia to demonstrate that the relevant measure is 
provisionally justified under subparagraph  (b) and then that the measure is applied in a manner 
consistent with the chapeau  of Article XX.  
7.619.   Complying with the first tier of the test implies that Indonesia must show that the relevant 
measure is "necessary to protect human, animal or plant life or health ". In this respect, t he 
Appellate Body has clarified that the provisional justification under one of the subparagraphs of 
Article XX requires that a challenged me asure "address[es] the particular interest specified in that 
paragraph " and that "there be a sufficient nexus between the measure and the  interest 
protected ".1838 Furthermore, "[t]he required nexus – or 'degree of connection' – between the 
measure and the interest is specified in the language of the paragraphs themselves, through the 
use of terms such as 'relating to' and 'necessary to' " in Article XX".1839 Mirroring the analysis 
proposed by the Appellate Body with respect to subparagraphs  (a) and (d)1840, we consider that in 
order to establish whether the measures at issue are provisionally justified under Article XX(b), we 
need to examine first whe ther Indonesia has demonstrated that the measures at issue are  
"designed " to protect human, animal or plant life or health ; and second, whether the measures at 
issue are "necessary " to protect human, animal or plant life or health .1841  
7.620.   With respect to the an alysis of the "design " of the measure, following the Appellate  Body's 
guidance, the phrase "to protect human, animal or plant life or health " calls for an initial, threshold 
examination in order to determine whether there is a relationship between an other wise 
WTO-inconsistent  measure and the protection of human, animal or plant life or health .1842 If this 
initial, threshold examination reveals that the measure is incapable of protecting human, animal or 
plant life or health , there is not a relationship betwee n the measure and the protection of human, 
animal or plant life or health  that meets the requirements of the "design " step. In this situation, 
further examination with regard to whether this measure is "necessary " to protect human life or 
health would not be required. This is because there can be no justification under Article  XX(b) for a 
measure that is not "designed " to protect human, animal or plant life or health .1843 However, if the 
measure is not incapable of protecting human, animal or plant life or hea lth, this indicates the 
existence of a relationship between the measure and the protection of human, animal or plant life 
or health . In this situation, further examination of whether the measure is "necessary " is required 
under Article  XX(b).1844 In order to determine whether such a relationship exists, we must examine 
the evidence regarding the design of the measure at issue, including its content, structure, and 
                                                
1836 Appellate Body Report s, EC – Seal Products , para. 5.169 (referring to  Appellate Body Reports, US – 
Gasoline , p. 22, DSR 1996:I, p. 20; US – Shrimp , paras.  119 and  120; Appellate Body Report, US – Gambling , 
para. 292 ). 
1837 Appellate Body Report s, Korea – Various Measures on Beef , para. 157; Thailand – Cigarettes , 
para. 179. 
1838 Appellate Body Report s, EC – Seal Products , para. 5.169 (referring to Appellate Body Report, US – 
Gambling , para. 292).  
1839 Appellate  Body Report , Colombia – Textiles , para.  5.67 (referring to Appellate  Body Report, US – 
Gambling , para. 292 ). 
1840 See Appellate  Body Report, Colombia – Textiles , paras.  5.67-5.69. 
1841 Appellate  Body Report , Colombia – Textiles , para.  5.67. In this Report, the Appellate  Body also 
clarified that the "design " and "necessity " steps of the analysis under Article  XX(a) are conceptually di stinct, 
yet related, aspects of the overall inquiry to be undertaken into whether a respondent has established that the 
measure at issue is "necessary to protect  public morals" . The Appellate Body explained that, as t he assessment 
of these two steps  is not  entirely dis connect ed, there may  be some overlap in the sense that certain evidence 
and considerations may be relevant to both aspects  of the defence under Article XX( a). In the context of the 
"design " step of the analysis,  a panel is not precluded  from t aking into account evidence and considerations 
that may also be relevant to the examination  of the contribution of the measure in the context of the 
"necessity " analysis.  Appellate  Body Report, Colombia – Textiles , para.  5.76. We are of the view that the s ame 
analysis applies in our examination of Indonesia's defences under Article XX(b).  
1842 See Appellate  Body Report, Colombia – Textiles , para.  5.67, in the context of Article  XX(a) of the 
GATT 1994 and Argentina – Financial Services , para.  6.203, in the cont ext of Article  XIV(c) of the GATS, which 
mirrors Article  XX(d) of the GATT  1994.  
1843 See Appellate  Body Reports, Argentina – Financial Services , para. 6.203; and Mexico – Taxes on 
Soft Drinks , para.  72. 
1844 Appellate  Body Report, Colombia – Textiles , para.  5.68. WT/DS477/R • WT/DS478/R  
 
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  expected operation.1845 We note that a measure may expressly mention an objective falling within 
the scope of human, animal or plant life or health .1846 However, an express reference to such 
objective may not, in and of itself, be sufficient to establish that the measure is "designed " to 
protect human life or health for purposes of substan tiating the availa bility of the defence under 
Article XX(b). Conversely, a measure that does not expressly refer to a human, animal or plant life 
or health  objective may nevertheless be found to have such a relationship with human, animal or 
plant life or health  following a n assessment of the design of the measure at issue, including its 
content, structure, and expected operation.1847  
7.621.   The assessment of the "necessity " of a measure entails an in -depth, holistic analysis of the 
relationship between the measure and the protection  of human, animal or plant life or health .1848 
The "necessity test " involves a process of "weighing and balancing " a series of factors, including 
the importance of the objective, the contribution of the measure to that objective, and the trade -
restrictiveness  of the measure.1849 In this sense, w hether a particular degree of contribution is 
sufficient for a measure to be considered "necessary " cannot be answered in isolation from an 
assessment of the degree of the measure's trade -restrictiveness and of the relativ e importance of 
the interest or v alue at stake.1850 The Appellate Body has further explained that, in most cases, a 
comparison between the challenged measure and possible alternatives should subsequently be 
undertaken.1851 Regarding the specific factors of the "necessity " analysis, we refer to our 
discussion in paragraph  7.564 above .  
7.622.   As mentioned above, in most cases, a panel must then compare the challenged measure 
and possible alternative measures that achieve the same level of protection while being less trade 
restrictive.1852 The Appellate  Body has explained that an alternative measure may be found not to 
be "reasonably available " where "it is merely theoretical in nature, for instance, where the 
responding Member is not capable o f taking it, or where the measure imposes an undue burden on 
that Member, such as prohibitive costs or substantial technical difficulties ".1853 The burden of 
proving that the measure at issue is necessary resides with the responding party, a complaining 
party  bears the burden of identifying any alternative measures that, in its view, the responding 
party should have taken.1854 The Appellate  Body has observed that "the very utility of examining 
the interaction between the various factors of the necessity analysis,  and conducting a comparison 
with potential alternative measures, is that it provides a means of testing these factors as part of a 
holistic weighing and balancing exercise ".1855 In this respect, the weighing and balancing exercise 
can be understood as "a holistic operation that involves putting all the variables of the equation 
                                                
1845 See Appellate  Body Reports, US – Shrimp , paras. 135–142; EC – Seal Products , para.  5.144; 
Colombia – Textiles , para.  5.68. 
1846 In discerning the objective of a measure, a panel is not limited to the text or preamble of a 
measure, or to a respondent's c haracterization of the objective in WTO dispute settlement proceedings; it may 
also look at other evidentiary elements such as the design, structure, and operation of the measure in making 
its own determination of a measure's objective. Appellate  Body Repo rts, EC – Seal Products , para. 5.144.  
1847 Appellate  Body Report, Colombia – Textiles , para.  5.69, in the context of Article  XX(a) of the 
GATT  1994.  
1848 Appellate  Body Report, Colombia – Textiles , para.  5.70. 
1849 Appellate Body Report, EC – Seal Products , para. 5 .169 (referring to Appellate Body Reports, 
Korea  – Various Measures on Beef , para. 164; US – Gambling , para. 306; and Brazil – Retreaded Tyres , 
para. 182).  
1850 See also , Appellate  Body Report, Colombia – Textiles , para.  5.77. 
1851 Appellate  Body Reports, EC – Seal Products , para. 5.169 (referring to Appellate  Body Report s,  
US – Gambling , para. 307; and Korea – Various Measures on Beef , para. 166).  See also  Appellate  Body Report, 
Colombia – Textiles , para.  5.70. 
1852 Appellate  Body Reports, EC – Seal Products , para . 5.169. In EC – Seal Products , the Appellate Body 
recalled that, in US – Tuna II (Mexico) , it had identified in the context of Article 2.2 of the Agreement on 
Technical Barriers to Trade (TBT  Agreement) circumstances in which a comparison with possible al ternative 
measures may not be required, for instance, when the challenged measure is not trade restrictive, or when it 
makes no contribution to the objective. Appellate  Body Reports, EC – Seal Products , fn 1181 to para.  5.169 
(referring to Appellate Body R eport, US – Tuna II (Mexico) , fn 647 to para. 322.  
1853 Appellate  Body Report,  US – Gambling , para. 308.  See also , Appellate  Body Report, Colombia – 
Textiles , para.  5.74. 
1854 Appellate Body Report, EC – Seal Products , para. 5.169 (referring to Appellate Body Re port, US – 
Gambling , paras. 309 -311).  
1855 Appellate  Body Reports, EC – Seal Products , para. 5.215. (fn omitted)  See also , Appellate  Body 
Report, Colombia – Textiles , para.  5.75. WT/DS477/R • WT/DS478/R  
 
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  together and evaluating them in relation to each other after having examined them individually, in 
order to reach an overall judgement. "1856  
7.623.   Regarding the second tier of the test, i.e. whether Measure  4 is applied in a manner 
consistent with the chapeau , we refer to paragraphs  7.565 -7.567 above . In conducting our 
analysis, we bear in mind that Article  XX of the GATT  1994 applies  to "measures " that are to be 
analysed under the subparagraphs and the chapeau , not to any inconsistency with the GATT  1994 
that might arise from such measures.  
7.624.   We shall therefore proceed to examine whether Indonesia has demonstrated that 
Measure  4 is jus tified under  Article XX(b) of the GATT  1994.  As we indicated in Section  7.3.1 
above , Indonesia has only provided arguments on a measure by measure basis with respect to the 
first tier of the analysis, i.e. whether the measur es at issue are provisionally justified under 
subparagraph  (b) of Article XX of the GATT  1994. The second tier, i.e. whether the measures at 
issue are applied in a manner consistent with the chapeau  of Article XX , has been argued by 
Indonesia for its impor t licensing regimes as a whole, thus making no distinctions between 
measures. Under these circumstances, we are driven to follow the same approach in our analysis.  
7.625.   We commence by examining whether Indonesia has demonstrated that Measure  4 is 
provisionally justified under subparagraph  (b) of Article XX of the GATT  1994 
7.3.8.2.3   Whether Indonesia has demonstrated that Measure  4 is provisionally justified 
under Article  XX(b) of the GATT  1994  
7.626.   Under this tier of our analysis, the task before the Panel is to establish whe ther, as claimed 
by Indonesia, Measure  4 is provisionally justified under subparagraph  (b). As explained before, we 
shall examine whether Indonesia has demonstrated that Measure  4 is designed to protect human, 
animal or plant life or health  and, if so, whe ther it is necessary for such protection.  
7.627.   Concerning the first element, i.e. whether Measure  4 is designed to protect human, animal 
or plant life or health1857, we note that Indonesia has argued that it is regulating the timing of 
imports, taking account of domestic harvest periods, in order to protect Indonesian citizens from 
public threats.1858 Indonesia submits that  given the prevailing equatorial climate, the oversupply of 
fresh horticultural produce in a particular region of its vast archipelago could have disastrous 
health consequences due to the accelerated rate of decomposition and the risk posed by the 
spread of pathogenic bacteria. According to Indonesia, in the absence of national coordination of 
imports with domestic harvest times, stockpiles of "rotting fresh " horticultural products are likely 
to cause serious public health threats. Indonesia considers that it is taking a proactive approach 
against such risks by ensuring that imports are re -directed within its territory during domestic 
harvest periods .1859  
7.628.   New Zealand responded that Indonesia's mere assertion that the objective of the measure 
is public health is insufficient to satisfy the first element of Article XX(b).1860 According to 
New Zealand, nothing in the design or structure of the measure indicat es that it was adopted or 
enforced to protect human health; and Indonesia has produced no evidence that "stockpiles of 
rotting horticultural products " have previously resulted, or would result in the future, from imports 
during domestic harvest seasons or that this was the reason for introducing the measure. Rather, 
the evidence presented by New  Zealand shows that the real objective of  the measure is to protect 
                                                
1856 Appellate  Body Report, Brazil – Retreaded Tyres , para. 182.  See also , Appella te Body Report, 
Colombia – Textiles , para.  5.75. 
1857 In its second written submission, Indonesia indicated as follows:  
… 
(b)the requirement that imports of fresh horticultural products not be harvested more than six 
months from the date of importation, the domestic harvest period limitations, restrictions on 
end-use, the harvest time period, limitations for animal products, the storage capacity 
requirement, the positive list, and the reference price are justified under Article XX (b) of the 
GATT because these  measures are necessary for food safety and food security . 
Indonesia's second written submission, para. 207(b). The Panel observes that, although Indonesia has 
indicated a food security objective for Measure  4, the specific argumentation put forward by Ind onesia with 
respect to Measure 4 does not appear to include food security concerns.  
1858 Indonesia 's second written submission, paras. 222 -223. 
1859 Indonesia 's first written submission, para. 155; second written submission, para. 222.  
1860 New Zealand 's second  written submission, para. 228 (referring to  Appellate Body Report, EC – Seal 
Products , para. 5.144 ). WT/DS477/R • WT/DS478/R  
 
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  domestic farmers from import competition.1861 The United States agreed with New Zealand and 
contend ed that Indonesia has not demonstrated that the seasonal restrictions on horticultural 
products pursue the objective of protecting human health.1862  
7.629.   We recall that this first step  in the analysis  calls for an initial, threshold examination in 
order to determi ne whether there is a relationship between an otherwise WTO-inconsistent  
measure and the protection of human, animal or plant life or health .1863 We note that Indonesia 
has identified public health as the policy objective addressed by this Measure. The co -complainants 
do not question  that public health falls under the purview of the protection of human, animal or 
plant life or health under paragraph (b) of Article XX.   
7.630.   What the co -complainants question is the existence of a relationship between Measure  4 
and t he protection of human health.1864 We proceed to examine the evidence regarding the design 
of the measure at issue, including its content, structure, and expected operation  to establish 
whether such a relationship exists .1865 In our analysis, w e understand that a measure that does 
not expressly refer to a public moral objective may still be found to have such a relationship 
following an assessment of the design of the measure at issue, including its content, structure, and 
expected operation.1866 In this respect, as  described in Section 2.3.2.4 above , Measure 4 consists 
of the requirement that the importation of horticulture products takes place prior to, during and 
after the respective domestic harvest seasons within a certain time per iod.1867 Indonesia 
implements this measure mainly by means of Articles 5 and 8 of MOA  86/2013. We recall that, in 
Section 7.2.8.3 above , we concluded that Measure 4 is inconsistent with Article  XI:1 of the GATT 
1994 because , by virtue of its design, architecture and revealing structure, it constitute s a 
restriction having a limiting effect on importation .  
7.631.   We observe that nothing in the text of the regulations implementing this measure and, in 
particular, Articles 5 and 8 of MOA  86/2013, refers to the protection of human, animal or plant life 
or health as the policy objective of this measure. On the contrary, we note that that this regulation 
refers generally to the simplification of the "import process of horticulture products " and to 
"providing certainty in the servicing of Import  Recommendation of Horticulture Products " as its 
rationale.1868 What is more, Article 2 expressly confirms  the underlying rationale by stating that 
"[t]his Regulation is intended to be the legal basis for issuing RIPH as a requirement for the  
issuance of import approval " and, similarly, Article 3 provides that "this Regulation is intended to … 
increase the effectiveness and efficiency of horticulture product import management; and … 
provide certainty  in RIP H issuing service ".1869 In its initial part, MOA  86/2013 also refers to several 
domestic regulations and laws concerning a wide array of subjects, including quarantine measures 
for the importation of fresh fruits and vegetables, the Horticulture Law and the Food law, and even 
the law regarding the ratification of the WTO Agreement. We fail to see, however, how any these 
legal instruments constitutes relevant evidence  that the harvest period requirement  was 
formulated to protect public health in the sense of ad dressing  Indonesia's purported  concerns on 
the oversupply of some products during the harvest periods  and its pernicious effects on public 
health .  
7.632.   Having examined the design of Measure  4, we fail to see any connection with human, 
animal or plant life or h ealth that could lead us to conclude that Measure  4 is "not incapable "1870 of 
protecting human, animal or plant life or health . Rather, this measure appears to relate mainly to 
import procedures and specifically govern the timing when some products might ente r Indonesia's 
customs territory. Indeed, Measure  4 allows Indonesian authorities to reduce or altogether ban 
imports of horticultural products depending on Indonesia's own harvest season. Indonesia argued 
                                                
1861 New Zealand 's second  written submission, para. 2 28 (referring to Exhibit NZL –73). 
1862 United States ' second written submission, paras. 170 and 175.  
1863 See Appellate  Body Report, Colombia – Textiles , para.  5.67, in the context of Article  XX(a) and 
Argentina – Financial Services , para.  6.203, in the context of Article  XIV(c) of the GATS, which mirrors 
Article  XX(d) of the GATT  1994.  
1864 New Zealand 's second written  submission, para. 228 ; United States ' second written submission, 
paras. 170 and 175 . 
1865 See Appellate  Body Reports, US – Shrimp , paras. 135-142; EC – Seal Products , para.  5.144; 
Colombia – Textiles , para.  5.68. 
1866 Appellate  Body Report, Colombia – Textiles , para. 5.69, in the context of Article  XX(a) of the 
GATT  1994.  
1867 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, paras. 95 -96; United  States'  first written submission, para. 60.  
1868 Exhibit  JE-15. 
1869 Article 2 and 3, Exhibit JE -15. 
1870 Appellate  Body Report, Colombia – Textiles , para.  5.68. WT/DS477/R • WT/DS478/R  
 
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  that it was concerned with the consequences of  oversupply of fresh horticultural produce and the  
stockpiles of rotting horticultural products during  domestic harvest times.1871 Indonesia  did not, 
however,  provided us with any  evidence regarding any occurrence of such situations in the past 
during domestic har vest seasons, or evidence that preventing serious public health threats arising 
from rotting stockpiles of horticultural products was the policy objective behind Measure  4.  
7.633.   We are mindful that Indonesia has presented evidence purporting to show the goals and 
directives of the Food Security Council, that, as alleged by Indonesia, are taken into account by 
the Ministry of Agriculture when establishing the "specific time period s" under Article 5 of 
MOA 86/2013.1872 We note that Exhibit IDN -25 presents an overvie w of the Indonesian Agency for 
Food Security, including its structure, policy strategies and strategic programmes. However, as 
underlined by the United States1873, the cited exhibit  does not contain any reference to M easure  4, 
seasonal restrictions on importa tion or to over -supply of horticultural products and generally, the 
public health issues that Indonesia has argued to justify this measure under Article XX(b) of the 
GATT 1994.  
7.634.   As pointed out by the co -complainants1874, the evidence on the record does not su pport 
Indonesia's contention that the policy objective of Measure  4 is related to the protection of human, 
animal or plant life or health. Rather, the evidence points to the objective as being to ensure that 
no importation takes place unless Indonesian aut horities deem domestic production insufficient to 
fulfill domestic demand . For instance, Exhibit US A-70 includes a letter dated 3 December 2015 
addressed to the H ead of the Indonesia n Horticultural Products Importers Association  where  the 
Ministry of Agric ulture’s Director General of Horticulture refers to the states  that "commodities not 
produced domestically may be imported " during the 2016 RIPH issuance period  and that the 
domestic production of oranges would suffice to meet consumers' demand .1875  
7.635.   We there fore conclude that  Indonesia has not demonstrated that there is a relationship 
between Measure  4 and the protection of human, animal or plant life or health . Accordingly, we 
find that Indonesia has not demonstrated that Measure  4 is provisionally justified  under 
subparagraph  (b) of Article XX of the GATT  1994.   
7.3.8.2.4   Conclusion  
7.636.   In the light of the foregoing, we find that Indonesia has failed to demonstrate that 
Measure  4 is justified under Article  XX(b) of the GATT  1994.   
7.3.9   Whether Measure  5 (Storage ownership and  capacity requirement) is justified 
under Article  XX(a) of the GATT  1994  
7.3.9.1   Arguments  of the Parties  
7.3.9.1.1   Whether Measure 5 is provisionally justified under subparagraph  (a) of 
Article  XX of the GATT  1994  
7.3.9.1.1.1   Indonesia  
7.637.   Indonesia holds that, given the diversity of dome stic political structures, ethical, moral, or 
religious beliefs and values, which underpin the  adoption of legislation  among the WTO 
Membership , the preservation of public morals is central to achieving social cohesion .1876 Indonesia 
further argues that, t o fully exercise the right to regulate for the preservation of public morals, 
Members should be given some scope to define and apply this principle according to their 
                                                
1871 Indonesia 's first written submission, para. 155; Indonesia 's second written submission, para. 222.  
1872 Indonesia 's response to Panel question No. 17; Exhibi t IDN -25. 
1873 United States ' secon d written submission, para. 171 ( referring to Exhibit IDN -25). 
1874 United States ' second written submission, para. 172.  
1875 Exhibit US -70. Similarly, we note that the co -complainants have submitted several news articles 
where In donesian government officials are reported as stating that the policy goal pursued by some of the 
challenged measures in this dispute are the protection of farmers and the principle of self -sufficiency.  See 
Exhibits NZL -11, NZL -73, USA -10, USA -11, USA -13, USA-14, USA -15. 
1876 Indonesia's second written submission, para. 92 (referring to Panel Report, China – Audiovisual , 
para. 7.794; Panel Report, US – Gambling , para. 6.465; Appellate Body Report, US – Gambling , para. 299 
("the term 'public morals ' denotes sta ndards of right and wrong conduct maintained by or on behalf of a 
community or nation ")). WT/DS477/R • WT/DS478/R  
 
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  respective values and changing factors1877, and to determine the level of protection they deem 
appropriate in given situations.1878 As a predominantly Muslim country1879, it argues, freedom of 
worship is guaranteed1880, and in order to protect this right, the Indonesian Government has 
enacted some laws and regulations in relation to Halal requirements. Indon esia asserts that, 
according to Islamic law, eating is an act of worship.1881 As its import licensing regime was 
designed with these considerations in mind, Indonesia maintains that it s regime  is necessary for 
the protection of public morals in accordance wit h Article XX(a), which is a crucial policy issue for 
Indonesia.1882 
7.638.   Indonesia contends that, given the meaning and significance of Halal1883, food is generally 
considered Halal unless it is specifically prohibited by the Qur'an. Hence, many foodstuffs  are 
inhere ntly Halal. Other products can be Halal, if the ingredients are carefully selected and sourced, 
for example by adopting appropriate manufacturing, handling and storage procedures.1884 In this 
regard, Indonesia observes that, under Islamic Law, Halal products should be properly separated 
and clearly identified.1885 Citing the FAO Guidelines on the use of the term "Halal"1886, Indonesia 
maintains that horticultural products that are either "prepared, processed, transported or stored 
using any appliance or facility tha t was not free from anything unlaw ful according to Islamic Law ", 
or otherwise considered "intoxicating or hazardous ", are unlawful .1887 
7.639.   Indonesia contends that in conducting the necessity test, the factors to be considered 
include the contribution of the meas ure to the realization of the ends pursued by it, and its trade -
restrictiveness.1888 According to Indonesia, all the challenged measures contribute to the objective 
of protecting public morals without any discernible impact on trade.1889 
7.640.   Specifically with respec t to Measure  5, Indonesia argues that the storage ownership 
requirement is necessary to ensure Halal compliance and to protect the Halal status of food sold in 
Indonesia and that it therefore falls within the scope of public morals.1890 On this basis, Indones ia 
argues that its import licensing regime requires importers to own their storage for horticultural 
products (and cold storage for animal products) and that this requirement is necessary to show 
importers' commitment in following Halal guidelines.1891 Indone sia alleges that products may even 
lose their Halal status due to improper storage and misplacement.1892 Due to relatively low 
consumer awareness, Indonesia contends that the Government has assumed a leading role in 
ensuring that products sold in Indonesia ar e Halal and safe, for example by enacting Law 33 of 
2014 on Halal Product Assurance.1893 
                                                
1877 Indonesia 's opening statement at the second substantive meeting, paras. 25 -26; second written 
submission, paras. 93 -94 (referring to Panel Report, US – Gambling , para. 6.461; Appellate Body Reports 
Brazil – Retreaded Tyres , para. 210; EC – Asbestos , para. 168; Korea – Various Measures on Beef , para. 176 ).  
1878 Indonesia 's second written submission, paras. 93 –94 (referring to Appellate Body Report s, Brazil – 
Retreaded T yres, para. 210; EC – Asbestos , para. 168; Korea – Various Measures on Beef , para. 176; Panel 
Report, China – Audiovisual , para. 7.817 ); and Indonesia 's opening statement at the second substantive 
meeting, para. 26.  
1879 Indonesia 's second written submission,  paras. 210 -213 (referring to  Exhibit IDN -43). 
1880 Indonesia second written submission, paras. 95 -96, where Indonesia points to Article 29(2) of the 
Indonesian Constitution (UUD 1945) which guarantees the freedom of worship to all people, each according to 
his or her own religion or belief; Indonesia 's opening statement at the second substantive meeting, para. 27.  
1881 Indonesia 's second written submission, para. 96.  
1882 Indonesia 's second written submission, para. 92; Indonesia 's opening statement at the second 
substantive meeting, paras. 25 and 28.  
1883 Indonesia 's second wri tten submission, paras. 211 -212 ( referring to Exhibits IDN -44 to IDN -46). 
1884 Indonesia 's second wri tten submission, paras. 211 -212 (referring to  Exhibit IDN -70). 
1885 Indonesia 's second written subm ission, para. 212.  
1886 Exhibit IDN -23.  
1887 Indonesia 's second wri tten submission, para. 212 . 
1888 Indonesia 's second written submission, para. 97; Indonesia 's opening statement at the second 
substantive meeting, para. 29  (referring to  Appellate Body Report, Korea – Various Measures on Beef , 
paras.  161 and 164). 
1889 Indonesia 's opening statement at the second substantive meeting, para. 29 . 
1890 Indonesia 's second written submission, paras. 209 -216. 
1891 Indonesia 's second written submission, para. 214.  
1892 Indonesia 's secon d written submission, para. 214  (referring to  Exhibit s IDN-71 and IDN-72). 
1893 Indonesia 's second written submission, para. 215  (referring to  Article 21 of Law 33/2014 which 
states: "Location, place, and equipment of PPH must be separated from the location, place, and equipment for 
slaughtering, processing, storing, packaging, distributing, selling, and presenting of non -halal Product ", 
Exhibit  IDN-47). WT/DS477/R • WT/DS478/R  
 
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  7.3.9.1.1.2   New Zealand  
7.641.   New Zealand points out that Indonesia fails to identify the Halal requirements that are 
applicable to horticultural products in many instances.1894 For New Zeala nd, Indonesia's failure to 
reference any regulations on Halal requirements for horticultural products is consistent with its 
understanding that there are no such requirements.1895 New Zealand recalls that its challenge to 
Indonesia's storage ownership and cap acity requirement is confined to horticultural products which 
are inherently Halal and request s the Panel to reject Indonesia's public morals arguments under 
Article XX(a).1896  
7.3.9.1.1.3   United States  
7.642.   In the Unit ed States' view, the fact that H alal is a public moral i s not sufficient to establish 
that any of Indonesia's import licensing measures w ere taken "to protect " that public moral.1897 
Further,  the additional arguments and exhibits submitted by Indonesia in its second written 
submission in attempt ing to justify cert ain me asures as necessary to protect H alal requirements, 
are not availing.1898 The United States holds that such attempts are entirely devoted to  
establishing the existence of H alal as a public moral in Indonesia, which is not in dispute.1899 To 
the contrary, th e co-complainants have great  respect for the observance of H alal an d duly comply 
with Indonesia’s H alal requireme nts, including with regards to H alal certification.1900 
7.643.   The United States argues that Indonesia has not even identified the Halal standards for 
horticultural products that the import licensing measures purportedly protect.1901 Furthermore, 
nothing in the text, structure, or history of the legal instruments establishing the measures 
applicable to horticultural products even mentions Halal, let alone sug gests that the objective of 
the regime is to uphold Halal standards.1902 The United States contends that, although Indonesia 
asserts that "Law 13/2010 " (the Horticulture Law ) "refers to the Halal provisions in Law 
18/2012, "1903 this statement appears to be inacc urate since Law 13/2010 does not refer to Halal or 
to any provisions of Law 18/2012.1904 From the United States' perspective, not only has Indonesia 
failed to demonstrate that its import licensing measures were adopted or enforced to protect the 
Halal require ments, but it has also failed to show that these measures are necessary to achieve 
that objective.1905 The United States argues that Indonesia has not explained how its measures 
contribute to the protection of Halal requirements, much less made its case that their contribution 
is approaching "indispensable " on the continuum of assessing necessity. 1906 
7.644.   Specifically with respect to Measure  5, the United States recalls that the storage capacity 
requirement that the co -complainants are challenging applies only to im portation of horticultural 
                                                
1894 New Zealand 's comments on Indonesia 's response to Panel question No. 86 (a)(iii), paras.  12-13, 
noting  that, while Indonesia cross -refers its response to that already  supplied to Panel Question no.  116, the 
information provided therein does not refer to any halal requirements that would be applicable to horticultural 
products. Indonesia 's responses to questio ns Nos. 116(a) and (b) describe halal assurance processes in 
relation to beef cuts. In question No. 116(c), the Panel specifically asked Indonesia to identify the regulations 
on halal requirements applicable to horticultural products. Indonesia 's response was to set out the regulations 
providing the legal basis for halal certification for animals and animal products (para. 59). Likewise, although 
question No. 86(c) refers to horticultural products, Indonesia 's response relates to post -shipment requirements 
for animals and animal products.  
1895 New Zealand 's second written submission, para. 253.  
1896 New Zealand 's opening statement at the second substantive meeting, paras. 74 -75. 
1897 United States ' oral statement at the second substantive meeting, para. 35.  
1898 United States ' oral statement at the second substantive meeting, para. 33.  
1899 United States ' oral statement at the second substantive meeting, para. 34  (referring to Indonesia 's 
second written submission, paras. 92 -96). 
1900 New Zealand 's oral statement at the second  substantive meeting, para. 29; United States ' oral 
statement at the second substantive meeting, para. 35; oral statement at the f irst substantive meeting, 
para. 32; and second written submission, paras. 207 and 229.  
1901 United States ' oral statement at the second substantive meeting, para. 36.  
1902 United States ' oral statement at the second substantive meeting, para. 36; and second written 
submission, paras. 208 -209. 
1903 Indonesia 's second written submission, para. 101.   
1904 United States ' oral statement at the s econd substantive meeting, para. 36  (referring to  the 
Horticulture Law, Exhibit JE -1). 
1905 United States ' oral statement at the second  substantive meeting, para. 37 ( referring to Indonesia 's 
second written submission, para. 101 ). 
1906 United States ' oral statem ent at the second substantive meeting, para. 37.  WT/DS477/R • WT/DS478/R  
 
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  products.1907 By contrast, the entire defen ce presented by Indonesia in this respect is based on 
requirements or incidents relating to animal products.1908 To date, Indonesia has not identified any 
relevant Halal requirements for horti cultural products, or presented evidence demonstrating that 
the protection of Halal standards is, in fact, the objective of the storage ownership requirement for 
horticultural products.1909 Moreover, the evidence submitted by Indonesia refers to animal 
produc ts and do es not support Indonesia's defense.1910 Importantly, in the United States' view, 
Indonesia has not even attempted to show how Measure  5 could relate to Halal.1911 
7.3.9.1.2   Whether Measure  5 is applied in a manner consistent with the chapeau  of 
Article XX  
7.645.   Concern ing the parties' arguments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
7.3.9.2   Analysis by the Panel  
7.3.9.2.1   Introduction  
7.646.   The task before the Panel is to determine whether Measure  5 (Storage ownership and 
capacity requirement) is justified under Article XX(a) of the GATT  1994. We commence with the 
text of the relevant provision and the ensuing legal standard.  
7.3.9.2.2   The relevant legal provision  
7.647.   Article XX of the GATT 1994 reads, in relevant part, as follows:  
Article XX 
General Exceptions  
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between countries 
where the same conditions prevail, or a disguised restriction o n international trade, 
nothing in this Agreement shall be construed to prevent the adoption or enforcement 
by any Member of measures:  
 (a) necessary to protect public morals  
 … 
7.648.   As we explained in Section  7.3.5.2.2 above , the assessment of a claim of justification 
under Article  XX involves a two -tiered analysis in which a measure must (i)  be provisionally 
justified under one of the subparagraphs of Article XX, in this case subparagraph  (a), and then 
(ii) analysed under the chapeau of Article XX.1912 Hence, in or der to justify an otherwise 
WTO-inconsistent measure, the Member invoking a subparagraph of Article  XX as a defence bears 
                                                
1907 United States ' first written submission, paras. 186 -191; and second written sub mission, 
paras.  25-27. 
1908 United States ' oral statement at the second substantive meeting, para. 39  (referring to Indonesia 's 
second written submission, paras. 213 -216). 
1909 United States ' oral statement at the second substantive meeting, para . 39 (referring to its 
comments on Indonesia response to Panel Questions nos.  68 and 69; United States ' response to Panel question 
No. 76; and second written submission, paras. 208 -210). 
1910 United States ' oral statement at the second substantive meeting, para. 40 ( referring to two 
Indonesian newspaper articles: Exhibit IDN -71: concerning a meat plant in Australia, its failure to segregate 
halal a nd non -halal meats during processing and the alleged corruption among Indonesian halal certification 
officials; Exhibit IDN -72: concerning domestic producers not applying for halal certification of their meat 
products ). 
1911 United States ' oral statement at t he second substantive meeting, para. 4 0 (referring to Appellate 
Body Reports in Brazil – Retreaded Tyres , para. 210; EC – Seal Products , para. 5.180 ( in turn referring to 
Panel Report on  EC – Seal Products , para. 7.633) ). 
1912 Appellate Body Report, EC – Seal Products , para. 5.169 (referring to Appellate Body Reports, US – 
Gasoline , p. 22, DSR 1996:I, p. 20; US – Shrimp , paras.  119 and  120;US – Gambling , para. 292).  WT/DS477/R • WT/DS478/R  
 
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  the burden of establishing that the conditions prescribed therein are met.1913 Therefore, it is 
incumben t upon Indonesia to demonstrate that the relevant measure is provisionally justified 
under subparagraph  (a) and that the measure is applied in a manner consistent with the chapeau  
of Article XX. Given that the  legal standard to demonstrate that a measure c omplies with the 
requirements of Artic le  XX(a) is similar to that of  Article XX(b), with the difference of the objective 
being the protection of "public morals " rather than "human, animal or plant life or health ", we refer 
to our discussion in paragraphs  7.619  through 7.623 above .  
7.649.   We shall therefore proceed to examine whether Indonesia has demonstrated that 
Measure  5 is justified under  Article XX( a) of the GATT  1994.  As we indicated in Section  7.3.1, 
Indonesia has only provided arguments on a measure by measure basis with respect to the first 
tier of the analysis, i.e. whether the measures at issue are provisionally justified under 
subparagraph  (a) of Article XX of th e GATT  1994. The second tier, i.e. whether the measures at 
issue are applied in a manner consistent with the chapeau  of Article XX , has been argued by 
Indonesia for its import licensing regimes as a whole, thus making no distinctions between 
measures. Unde r these circumstances, we are driven to follow the same approach in our analysis.  
7.3.9.2.3   Whether Indonesia has demonstrated that Measure  5 (Storage ownership and 
capacity requirement) is provisionally justified under subparagraph  (a) of Article  XX of 
the GATT  1994 
7.650.   Under this tier of our analysis, the task before the Panel is to establish whether, as claimed 
by Indonesia, Measure  5 is provisionally justified by subparagraph  (a) of Article XX  of the 
GATT  1994. As explained before, we shall examine whether Indonesia has demonstrated that 
Measure  5 is designed to protect public morals  and, if so, whether it is necessary for such 
protection.  
7.651.   Concerning the first element, i.e. whether Measure  5 is designed to protect public morals, 
we note that Indonesia has argued that  the storage ownership requirement is necessary to ensure 
Halal compliance and to protect the Halal status of food sold in Indonesia,  and that it is a measure 
falling within the scope of public morals.1914 On this basis, Indonesia argued  that its import 
licensing regime requires importers to own their storage for horticultural products and that this 
requirement is necessary to show importers' commitment to  following Halal guidelines.1915 
Indonesia explained that products may even lose their Halal status due to im proper storage and 
misplacement.1916 Indonesia further contended  that, d ue to relatively low consume r awareness, 
the Government has assumed a leading role in ensuring that products sold in Indonesia are Halal 
and safe, for example by enacting Law 33 of 2014 o n Halal Product Assurance.1917 
7.652.   The co -complainants disagreed and requested that we reject Indonesia's defence under 
Article XX(a) for Measure  5 because this measure deals with horticultural products which are 
inherently Halal.1918 New Zealand thus argued that In donesia has failed to reference any 
regulations on Halal requirements that apply to horticultural products .1919 The United States 
recalled that the storage capacity requirement that the co -complainants are challenging applies 
only to importation of horticultu ral products1920 but that Indonesia's entire defen ce is based on 
requirements or incidents relating to animal products.1921 For the United States, Indonesia has not 
                                                
1913 Appellate Body Reports, Korea – Various Measures on Beef , para. 157; Thailand – Cigarettes , 
para. 179. 
1914 Indonesia 's second written submission, paras. 209 -216. 
1915 Indonesia 's second written submission, para. 214.  
1916 Indonesia 's second written submission, para. 214  (referring to  Exhibit s IDN-71 and IDN-72). 
1917 Indonesia 's second written submission, pa ra. 215  (referring to  Article 21 of Law 33/2014 which 
states: "Location, place, and equipment of PPH must be separated from the location, place, and equipment for 
slaughtering, processing, storing, packaging, distributing, selling, and presenting of non -halal Product ", Exhibit 
IDN-47). 
1918 New Zealand's opening statement at the second substantive meeting, paras. 74 -75; United States ' 
oral statement at the second substantive meeting, para . 39. 
1919 New Zealand's second written submission, para. 253.  
1920 United Stat es' first written submission, paras. 186 -191; and secon d written submission, 
paras.  25-27. 
1921 United States ' oral statement at the second substantive meeting, para. 39  (referring to Indonesia 's 
second written submission, paras. 213 -216); United States ' oral statement at the second substantive meeting, 
para. 4 0 (referring to two Indonesian newspaper articles: Exhibit IDN -71: concerning a meat plant in Australia, 
its failure to segregate halal and non -halal meats during processing and the alleged corruption am ong 
Indonesian halal certification officials , and Exhibit IDN -72: concerning domestic producers not applying for 
halal certification of their meat products ). WT/DS477/R • WT/DS478/R  
 
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  identified any relevant Halal requirements for horticultural products, or presented evidence 
demo nstrating that the protection of Halal standards is, in fact, the objective of the storage 
ownership requirement for horticultural products.1922 In the United States' view, Indonesia has not 
even attempted to show how these requirements could relate to Halal.1923 
7.653.   We recall that this first step  in our analysis  calls for an initial, threshold examination in 
order to determine whether there is a relationship between an otherwise WTO-inconsistent  
measure and the protection of public morals .1924 We note that Indonesia ha s identified the public 
moral at issue as being the protection of Halal. The co -complainants do not question  that Halal is a 
public moral ; on the contrary, they have expressed their utmost respect for the protection of Halal 
regulations and certification.1925  
7.654.   What the co -complainants question is the existence of a relationship between Measure  5 
and the protection of Halal.1926 For the co -complainants, there are no Halal regulations applicable 
to horticultural products because they are inherently Halal. We have t hus attempted to confirm 
this fact with Indonesia to no avail .1927. We note, however, that Indonesia recognizes that many 
foodstuffs are inherently Halal, and Indonesia's  own exhibits imply that horticultural products are 
inherently Halal. For example, "ICWA Halal Guidelines " state that "all plants and their products " 
are Halal "unless containing or come into contact with a Haram substance ".1928 Moreover, 
Article  20(1) of the Law No. 33/ 2014 on Halal Product Assurance confirms that "[m]aterial which 
originate fr om plant […] is halal, except those which intoxicate and/or endanger the healt h of the 
people that consume it ".1929 We also note that, to our repeated inquiri es about  the existence of 
Halal requirements applicable to horticultural products, Indonesia only sup plies respons es that 
refer to Halal requirements applicable to animals and animal products. For instance, respon ding to 
our question  about the fulfilment of Halal requirements before, and after importation specifically 
with respect to "carrots "1930, Indonesia  cross-refers to its response to another  question  1931 which  
exclusively recounts the requirements applicable to animals and animal products. Furthermore, in 
response to another  question1932 related in particular  to post-shipment requirements for carrots, 
Indone sia again responded by explaining the requirements applicable to "carcasses, meat, and 
processed animal products "1933, obviously not horticultural products.  
                                                
1922 United States ' oral statement at the second substantive meeting, para . 39, referring to its 
comm ents on Indonesia response to Panel Questions nos.  68 and 69; United States ' response to Panel question 
No. 76; United States ' second written submission, paras. 208 -210. 
1923 United States ' oral statement at the second substantive meeting, para. 4 0 (referring  to Appellate 
Body Reports on Brazil – Retreaded Tyres , para. 210; EC – Seal Products , para. 5.180 ( in turn referring to 
Panel Report on  EC – Seal Products  , para. 7.633) ). 
1924 See Appellate  Body Report, Colombia – Textiles , para.  5.67, in the context of Art icle XX(a) and 
Argentina – Financial Services , para.  6.203, in the context of Article  XIV(c) of the GATS, which mirrors 
Article  XX(d) of the GATT  1994. 
1925 New Zealand 's oral statement at the second substantive meeting, para. 29; United States ' oral 
statemen t at the second substantive meeting, para. 35; oral statement at the first substantive meeting, para. 
32; second written submission, paras. 207 and 229.  
1926 New Zealand's opening statement at the second substantive meeting, paras. 74 -75; United States ' 
oral statement at the second substantive meeting, para . 39, referring to its comments on Indonesia's  response 
to Panel questions Nos.  68 and 69; United States ' response to Panel question No.  76; and second written 
submission, paras. 208 –210. 
1927 See Panel q uestio ns Nos. 86 and 116 . 
1928 "ICWA Hal al Guidelines", pp. 2, Exhibit IDN -46. 
1929 Law No. 33/2014 on Halal Product Assurance, Exhibit IDN -47. Poisonous or intoxicating plants are 
not Halal.  
1930 Panel question No.  86(a)(iii) read: " If an importer wished to import 10,00 0 tons of carrots into 
Indonesia, what would it need to do/obtain to do so, including with regards to the following aspects: … 
(iii) Fulfilment of halal requirements before, and after importation."  
1931 Panel question No. 116(c) read: "Please identify the gov ernment regulations on Halal requirements 
that specifically apply to horticultural products? In particular, are domestically -produced or imported 
horticultural products required to bear a Halal logo? If so, at which stage(s) of the distribution and/or 
importation processes, are the relevant inspection, certification, and Halal approval procedures completed?" 
Indonesia commenced its answer by indicating: " For animal and animal products, the legal basis for halal 
certification can be found in several differen t regulations: …". 
1932 Panel question No.  86(c) read: "If an importer wished to import 10,000 tons of carrots into 
Indonesia, what would it need to do/obtain to do so, including with regards to the following aspects: … c.Post -
shipment requirements, including  i. Transportation ii. Distribution chain iii.Ad hoc auditing".  
1933 Indonesia responded:  
For post -shipment requirements, please refer to Articles 34 -38 of MOA Regulation 139/2014. 
Pursuant to Article 36, post -shipment supervision occurs with respect to the p hysical condition of WT/DS477/R • WT/DS478/R  
 
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  7.655.   In the context of its arguments concerning Measure  6 (Use, sale and distribution 
requirements for hor ticultural products), Indonesia explained that, while most Halal requirements 
pertain to the production and consumption of animal products, strict storage and transportation 
requirements apply to all food products.1934 Indonesia has nevertheless not provided the Panel 
with the legal instruments within its domestic legislation showing the application of Halal 
requirements to horticultural products. As also established in paragraph 7.654 above , the Law on 
Halal Product Assurance, which requires that all products circulated or traded within  Indonesia  be 
Halal-certified , recognizes that "Material which or iginate from plant […] is halal […] ".1935 We recall 
that it is incumbent upon Indonesia to demonstrate that there is a relationship be tween Measure  5 
and the protection of Halal.  In our view, the bare assertion of an objective is insufficient to meet 
the burden of demonstrating that a relationship exists between the inconsistent measure and a 
given public moral objective. Indonesia has t herefore not identified the Halal requirements for 
horticultural products which Measure  5 or for that matter, its import licensing regime for 
horticultural products, must purportedly protect.  
7.656.   We have nevertheless examine d Measure  5 to establish whether su ch a relationship can be 
deduced from its design , including its content, structure, and expected operation.1936 In our 
analysis, w e understand that a measure that does not expressly refer to a public moral objective 
may still be found to have such a relations hip following an assessment of the design of the 
measure at issue, including its content, structure, and expected operation.1937 In this respect, as 
described  in Section 2.3.2.5 above , we observe that Measure 5 consists of the requirement that 
importers must own their storage facilities with sufficient capacity to hold the full quantity 
requested on their Import Application.1938 This requirement is implemented by Indonesia through 
Article 8 (1)(e) of MOT 16/2013 , as amended1939, and by  Article  8(2)(c)  and (d)  of MOA 86/2013, as 
amended .1940 We recall that, in Section  7.2.9.3 above , we concluded that Measure 5  is inconsistent 
with Article  XI:1 of the GATT 1994 because , by virtue of its design, architecture an d revealing 
structure, it constitute s a restriction having a limiting effect on importation . 
7.657.   We observe that nothing in the wording of the regulations implementing this Measure and, 
in particular, Article 8 (1)(e) of MOT 16/2013, as amended, and Article 8(2 )(c) and (d)  of 
MOA 86/2013 , refer to the protection of Halal as a policy objective of this measure. For instance, 
MOT 16/2013, as amended , provides as its goals the protection of consumers, promotion of 
business certainty and transparency, and the simplif ication of the licensing process and the 
administration of imports.1941 We note that, MOT 16/2013, as amended, also refers to several 
domestic regulations concerning a wide variety of subjects, including consumer protection, 
quarantine measures for the import ation of fresh fruits and vegetables, the Horticulture and Food 
laws, and even the law regarding the ratification of the WTO  Agreement . Turning to  MOA 86/2013 , 
its stated goals are to simplify the import process of horticultur al products, and provide certa inty 
in servicing the MOA Recommendations.1942  
7.658.   We recall  that Indonesia has argued that its Horticulture Law  "refers to the Halal provisions 
in Law 18/2012 ".1943 As argued by the United  States, this statement appears to be inaccurate 
                                                                                                                                                  
carcasses, meat, and processed animal products; including the packaging and labeling, 
documents, storage and transportation of the same.  
1934 Indonesia's first written submission, para. 158.  
1935 Article 21 of Law 33/2014  on Halal Product As surance, Exhibit IDN-47, states: "Location, place, and 
equipment of PPH must be separated from the location, place, and equipment for slaughtering, processing, 
storing, packaging, distributing, selling, and presenting of non -halal Product ". See also  Article 20(1).  
1936 See Appellate  Body Reports, US – Shrimp , paras. 135-142; EC – Seal Products , para.  5.144; 
Colombia – Textiles , para.  5.68. 
1937 Appellate  Body Report, Colombia – Textiles , para.  5.69, in the context of Article  XX(a).  
1938 New Zealand's Panel Request , pp. 1 -4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, para. 99; United  States'  first written submission, para. 66.    
1939 Article 8 of MOT 16/2013, as amended by M OT 47/2013, provides as follows that: " (1) To receive 
Confirm ation as a RI-Horticultural Products, as described in Article 3, a company must submit an electronic 
application to the Minister and the UPP Coordinator and Implementer, and attach  … e. Proof of ownership of 
storage facilities appropriate for the product 's characteristics… " Exhibit JE -10. 
1940 Article 8(2)(c) and (d) of MOA 86/2013 relevantly provides: " (2) Issuance of RIPH for fresh produce 
for consumption, in addition to meeting the administrative requirements as intended in paragraph (1) item a 
must be acco mpanied with the following technical requirements:  … c. statement of ownership of storage and 
distribution facilities for horticulture products according to their characteristics and product type ; d. statement 
of suitability of storage capacity  …", Exhibit  JE-15. 
1941 Consideration  (a) of MOT 16/2013, as amended, Exhibit JE -10. 
1942 Consideration  (b) of MOA 86/2013, Exhibit JE -15. 
1943 Indonesia 's second written submission, para. 101.   WT/DS477/R • WT/DS478/R  
 
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  because the Horticulture La w does not refer to Halal or to any provisions of Law 18/2012.1944 
Indonesia contends that Article 69 of the Food Law regulates the implementation of food safety , 
including through a Halal requirement.1945 Examining the context of Article 69, we understand that 
it comes under CHAPTER VII of the Food Law, which addresses "food safety " and brings 
"community religion " and "beliefs " under its scope.1946 However, we understand that Article  69 
relates to food in general, and not specifically to horticultural products or t he import licensing 
measures at issue.1947 Hence, despite Indonesia's assertions  to the contrary, t he Horticulture Law  
and the  MOA and MOT regulations  that we have just examined , does not identify Halal among its 
objectives, and does not specifically point to  any Halal provisions that would specifically apply to 
horticultural products  and that would inform the objective behind Measure 5 .  
7.659.   Having examined the design of Measure  5, we fail to see any connection with the public 
moral of Halal that could lead us to  conclude that Measure  5 is "not incapable "1948 of protecting 
public morals. Rather, this measure appears to relate mainly to conditions that importers must 
meet to be able to obtain the necessary permits; conditions that do not relate to the imported 
product s themselves or their Halal certification but rather to the property title of the importer's 
infrastructure to store the imported goods.  
7.660.   We therefore conclude that Indonesia has not demonstrated that there is a relationship 
between Measure  5 and the protec tion of the public moral of Halal. Accordingly, we find that 
Indonesia has not demonstrated that Measure  5 is provisionally justified under subparagraph  (a) of 
Article  XX of the GATT  1994.  
7.3.9.2.4   Conclusion  
7.661.   In the light of the foregoing, we find that Indonesia h as failed to demonstrate that 
Measure  5 is justified under Article  XX(a) of the GATT  1994.   
7.3.10   Whether Measure  5 (Storage ownership and capacity requirement) is justified 
under Article  XX(b) of the GATT  1994  
7.3.10.1   Arguments of the Parties  
7.3.10.1.1   Whether Measure 5 is provisionally justified under subparagraph  (b) of 
Article  XX of the GATT  1994  
7.3.10.1.1.1   Indonesia  
7.662.   Indonesia claims that Measure  5 is justified by Article  XX(b) of the GATT  1994. Indonesia 
argues that the "maximum capacity " requirement is necessary to protect human, anim al, or plant 
life or health. This stems from a combination of factors, i.e. (i) Indonesia's limited capacity to store 
imported fresh horticultural products after their arrival, but before their transfer to distributors or 
other end -users, and (ii) the prev ailing equatorial climate, compelling Indonesia to ensure the 
availability of proper storage facilities. In Indonesia's view, the heightened risk of spoilage under 
these conditions far outweighs any nominal imposition on importers.1949 The storage requirement  
is intended to ensure that fruits, vegetable and meat products for consumption are safe, nutritious 
and of good quality, using proper cold chain systems.1950 Focusing on the necessity  element , 
Indonesia argues that proper cold storage, transportation and han dling are needed at all stages of 
                                                
1944 United States ' oral statement at the second subst antive meeting, para. 36 (ref erring to  the 
Horticulture Law, Exhibit JE -1). 
1945 Article 69 of the Food Law 18/2012, Exhibit JE -2.  Article 69 states: " Implementation of Food Safety 
through:  a. Food Sanitation;  b. regulation of additives Food;  c. regulation of Genetically Engineered Food  
Products;  d. regulation of Irradiated Food;  e. determination of Food Packaging standard;  f. granting guarantees 
of Food Safety and Food Quality; and  g. guarantees for the halal required products. " 
1946 In particular, Article 67(1) of the Food Law states: " Food Safety organized to keep the Food remains 
safe, hygienic, high quality, nutritious, and does not conflict with community religion, beliefs, and culture. " 
1947 Other provisions of the Food Law address Halal -related product guarantee and certification 
mechan isms, labelling and advertising . See for example, Articles 95, 97, 101 and 105.  
1948 Appellate  Body Report, Colombia – Textiles , para.  5.68. 
1949 Indonesia 's first written submission, para. 148.  
1950 Indonesia 's second written submission, para. 110; Exhibit IDN -53; opening statement at the second 
substantive meeting, para. 33.  WT/DS477/R • WT/DS478/R  
 
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  the food chain to protect public health, in particular to avoid food contamination or poisoning.1951  
In this light, Indonesia contends that the objective of its import licensing regime, as well as its 
storage ownership and c apacity requirement, is to ensure product safety and compliance with all 
applicable laws and regulations.1952 In particular, Indonesia adduces that it requires ownership, 
rather than lease, to ensure that foodstuff s are treated and stored based on the product  
characteristics. In this regard, Indonesia argues that importers are the most familiar with the 
storage conditions appropriate for their products and thus are best placed to prevent health risks . 
Indonesia enforces this measure  as evidence of  the importer s' commitment to provide food that is 
safe for human consumption.   
7.3.10.1.1.2   New Zealand  
7.663.   New Zealand argues that Indonesia has not met the standard of Article XX(b) of the 
GATT  1994. In particular, Indonesia has not demonstrated, and provided no evidence showing, 
that the protection of life and health is indeed the objective being pursued by the measure. In 
addition, Indonesia's characterization of its measure as a food safety measure is insufficient to 
demonstrate that it does indeed have that purpose.1953 Assuming for  the sake of argument  that 
the purpose of the measure is directed at maintaining food safety, New Zealand holds that 
Indonesia has not explained why the measure is "necessary " to protect human health. In its view, 
there is insufficient relationship of ends  and means between the measure and the interests 
protected in Article XX(b) of the GATT 1994. 1954 To New Zealand, the two most objectionable 
aspects are that an importer must own the storage facilities for the horticultural imports; and that 
the volume alloc ations in its import approvals are limited to the importer’s verified cold -storage 
capacity on a one -to-one ratio, with no allowance for product turnover during the six -month 
validity period.1955 According to New Zealand, keeping storage facilities empty for several months 
after the stored products have been sold, but before the next validity period, makes no 
contribution to food safety. Also, Indonesia has not explained how ownership of storage facilities 
contributes to food safety and why other sorts of acce ss to storage (such as rental or lease 
arrangements) would not make an equal, but less trade -restrictive, contribution to this 
objective.1956   
7.664.   New Zealand observes that, in its second written submission, Indonesia argues that the 
measure "is to ensure that f ruits and meat products for consumption are safe, nutritious and also 
of good quality. "1957 Recalling that its challenge exclusively relates to horticultural products and 
the requirement that importers own storage facilities with capacity equalling the quanti ty of 
product imported over a six -month period in a one -to-one ratio1958, New Zealand contends that 
none of the presented evidence supports the need for such a requirement.1959 For example, 
Exhibit  IDN-53 is an article about extending the shelf life of fresh red  meat, and thus does not 
support Indonesia's requirement1960 while Exhibit IDN -82 relates to home storage and says 
nothing about ownership  of storage by importers.1961 From New Zealand's perspective, there is no 
reason why "ownership " as opposed to leasing of st orage facilities shows a greater "commitment " 
to provide food that is safe for consumption.1962 Finally, New Zealand reiterates that Indonesia's 
explanation of why importers are only allowed to import products up to the maximum capacity of 
their storage – to "show the importer's commitment to provide food that is safe for consumption " - 
is inadequate .1963 New Zealand shares the United States' view1964 that importers could simply 
transfer their products directly to a distributor’s warehouse, and therefore might not n eed direct 
access to storage at all.1965 In this respect, New Zealand holds that the combination of the 
                                                
1951 Indonesia 's second written submission, paras. 230 -232; Food Safety Fact Sheet: Storing Foods, 
Exhibit IDN -80; Food Safety – storage, Exhibit IDN -81; Storage Guidelines for Fruits & Vegetable s, 
Exhibit  IDN-82. 
1952 Indonesia 's second written submission, para. 233.  
1953 New Zealand 's second  written submission, para. 242 (referring to  Appellate Body Report, EC – Seal 
Products, para. 5.144 ). 
1954 New Zealand 's second written submission, para. 243.  
1955 New Z ealand 's second written submission, para. 244.  
1956 New Zealand 's second written submission, para s. 245-246. 
1957 Indonesia 's second written submission, paras. 110, 116 -119 and 233.  
1958 See New Zealand 's first written submission, paras. 99.  
1959 New Zealand 's opening  statement at the second substantive meeting, paras. 74, 76 -77. 
1960 New Zealand 's response to Panel question No.  123. 
1961 Exhibit IDN -82. 
1962 New Zealand 's opening statement at the second substantive meeting, para. 77.  
1963 Indonesia 's second written submission, pa ras. 119, 178, 207(a) and 214.  
1964 United States ' first opening statement, para. 28.  
1965 New Zealand 's second written submission, para. 245.  WT/DS477/R • WT/DS478/R  
 
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  ownership requirement and the one -to-one ratio of imports per validity period has a significant 
trade -restrictive effect on import volumes.1966 
7.665.   From New Zeala nd's viewpoint, Indonesia has not adopted this measure to protect or 
secure compliance with the objectives cited in Article XX(b), nor has it shown the contribution of 
this measure to such objectives. New Zealand finds that the trade -restrictiveness of the  measure 
outweighs Indonesia’s purported justification for it. Consequently, New Zealand considers that it is 
not required to elaborate on an alternative measure. However, New Zealand suggests that a less 
trade -restrictive alternative could involve Indones ia being more flexible about the types of storage 
arrangements it regards as acceptable, both as to ownership and volume. These storage 
arrangements would need to be non -discriminatory, applying equally to imported and 
domestically -produced horticultural p roducts. 1967  
7.3.10.1.1.3   United  States  
7.666.   The United States contends that Indonesia’s Article XX(b) defence fails because Indonesia 
has not demonstrated that the requirement pursues the objective of human health and has not 
shown that it is "necessary " to such an objectiv e.1968 The United States considers that Indonesia 
has presented no evidence that the objective of the challenged measure is indeed the protection of 
human health. The United States asserts that all the evidence presented by the co -complainants 
suggests that t he true objective of Indonesia’s import licensing regime for horticultural products is 
the protection of domestic producers from competition from imported products.1969 Indonesia’s 
bare assertion to the contrary is not sufficient to satisfy the first element of Article XX(b).1970 With 
respect to the second element of Article XX(b), the United States holds that Indonesia’s arguments 
for the regimes, as a whole, focus on the importance of cold storage for meat1971, observing that 
the co -complainants are not challengin g the cold storage requirement for animal products, either 
as an individual measure, or as part of the licensing regimes as a whole. Hence, in the United 
States' view, the majority of Indonesia’s defence is irrelevant to the measures at issue in this 
dispu te.1972  The other evidence advanced by Indonesia in support of its assertion that the storage 
requirement "is to ensure that fruits and meat products for consumption are safe, nutritious and 
also of good quality " is an article that shows that meat spoils wit hout refrigeration and that quickly 
cooling carcasses after slaughter maximizes shelf life.1973 In the United States' view, this article 
does not address the storage requirement for horticultural products at all, which is the only 
storage requirement being ch allenged in this dispute.  Further, the evidence bears no relationship 
to Indonesia’s measure and does not suggest that the storage ownership requirement was actually 
adopted to address any food safety purpose. 1974 
7.667.   Even if the Panel were to find that the mea sure did, in part, pursue the objective of 
protecting human health, the United States argues that it remains unclear how the challenged 
measure could be "necessary " to the achievement of that objective.1975 Indonesia requires that 
importers own storage capaci ty sufficient to hold all the horticultural products they will import 
during an entire import period.1976 However, the United States considers that an importer’s 
ownership  of storage facilities has no relationship with the  sufficiency  of storage capacity: rat her, it 
is common practice under normal market conditions for importers to lease storage capacity1977; 
and importers would generally empty and refill storage space several times over the course of the 
semester. Responding to Indonesia's assertion that its mea sures will "ensure all of the imported . . 
                                                
1966 New Zealand 's second written submission, para. 246.  
1967 New Zealand 's second written submission, para. 247.  
1968 United St ates' second written submission, para s. 176 and 178 . 
1969 United States ' second  written submission, para. 177 ( referring to its first written submission, 
paras.  16 and  84-85). 
1970 United States ' second writte n submission, para. 177, referring to Appellate Body Report, EC – Seal 
Products , para. 5.144, stating that panels "should take into account the Member 's articulation of the objective 
or the objectives it pursues through its measures, but it is not bound by that Member 's characterization of such 
objective(s) ". 
1971 United States ' oral statement at the second  substantive meeting, para. 47 ( referring to Indonesia 's 
second written submission, paras. 116 -118). 
1972 United States ' oral statement at the second substantive meeting, para. 47.  
1973 United States ' response to Pa nel question No. 123 ( referring to Indonesia 's second written 
submission, para. 110, referring to  Exhibit IDN -53). 
1974 United States ' response to Panel question No.  123. 
1975 United States ' second  written submission, para. 178 (referring to  Appellate Body Repor ts, Brazil – 
Retreaded Tyres , para. 210; EC – Seal Products , para. 5.180 ). 
1976 Article 8(1)(e) MOT 16/2013, as amended, Exhibit JE -21; Exhibit US A-28. 
1977 ASEIBSSINDO Letter (Exhibit US A-28). WT/DS477/R • WT/DS478/R  
 
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  . products are stored properly ", and emphasizing the lack of evidence or argument as to how or 
why this would be the case1978, the United States counters that the condition of the storage has no 
necessary relationshi p to whether it is owned or rented.1979 The United States finds it entirely 
unclear how requiring importers to purchase excess capacity, only to have it lie empty for most of 
the semester, could contribute to food safety.1980 Consequently, the United States main tains that 
requiring importers to own enough storage to hold, at the same time,  all the horticultural products 
imported for the entire semester would not be necessary. From this perspective therefore, 
requiring ownership of storage capacity, and in such la rge amounts, cannot be said to be 
"necessary to protect human health ".1981 
7.668.   The United States suggests that a significantly less trade -restrictive way to achieve the 
objective of ensuring storage of imported horticultural products on arrival and providing offi cials 
with advance information on these facilities would be to remove both the ownership and one -to-
one ratio requirements and to allow importers to lease as much storage capacity as needed at any 
given time during an import period. Importers could continu e to provide storage capacity 
information for each semester in their import approval applications. This requirement would 
contribute to the stated objective to at least the same degree as Indonesia’s current measures, 
would be no more difficult to administ er, and would be significantly less trade -restrictive than the 
current requirement.1982 Another  less trade -restrictive alternative that would contribute to food 
safety would be to require importers to obtain appropriate storage adequate to the products they 
import – whether or not owned by the importer – or to allow importers to ship their products 
directly to distributors’ or retailers’ warehouses.1983 
7.3.10.1.2   Whether Measure  5 is applied in a manner consistent with the chapeau  of 
Article XX  
7.669.   Concerning the parties' argu ments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
7.3.10.2   Analysis by the Panel  
7.3.10.2.1   Introduction  
7.670.   The task before the Panel is to determine whether Measure  5 (Storage ownership and 
capacity requirement ) is justified under Article XX(b) of the GATT  1994. We commence with the 
text of the relevant provision and the ensuing legal standard.  
7.3.10.2.2   The relevant legal provision  
7.671.   Article XX of the GATT 1994 reads, in relevant part, as follows:  
Article XX  
General Excepti ons 
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between countries 
where the same conditions prevail, or a disguised restriction on international trade , 
nothing in this Agreement shall be construed to prevent the adoption or enforcement 
by any Member of measures:  
 (a) ... 
 (b) necessary to protect human, animal or plant life or health;  
… 
                                                
1978 Indonesia 's second written submission, para. 119.  
1979 United States ' oral statement at the second substantive meeting, para. 48.  
1980 United States ' oral statement at the second substantive meeting, para. 48.  
1981 United States ' second written submission, para. 178.  
1982 United States ' second written submission, para. 179.  
1983 United  States ' oral statement at the second substantive meeting, para. 48.  WT/DS477/R • WT/DS478/R  
 
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  7.672.   Concerning the legal standard under this provision, we refer to Sec tion 7.3.8.2.2 above . 
The task before the Panel is therefore to determine whether Measure  5 (Storage ownership and 
capacity requirements) is justified under Article XX(b) of the GATT  1994. We commence by 
examining whether In donesia has demonstrated that Measure  5 is provisionally justified by 
subparagraph  (b) of Article XX of the GATT  1994.  
7.3.10.2.3   Whether Indonesia has demonstrated that Measure  5 is provisionally 
justified under Article  XX(b) of the GATT  1994  
7.673.   Under this tier of our analysis, the task before the Panel is to establish whether, as claimed 
by Indonesia, Measure  5 is provisionally justified by subparagraph  (b). As explained before in 
Section  7.3.1 above , we shall examine whether Indonesia h as demonstrated that Measure  5 is 
designed to protect human, animal or plant life or health  and, if so, whether it is necessary for 
such protection.  
7.674.   Concerning the first element, i.e. whether Measure  5 is designed to protect human, animal 
or plant life or  health1984, we observe that Indonesia has argued that this Measure is intended to 
ensure that fruits, vegetable and meat products for consumption are safe, nutritious and of good 
quality, using proper cold chain systems.1985 Indonesia explained that t his stems from a 
combination of factors, i.e. (i) Indonesia's limited capacity to store imported fresh horticultural 
products after their arrival, but before their transfer to distributors or other end -users, and (ii) the 
prevailing equatorial climate, compelling In donesia to ensure the availability of proper storage 
facilities. In Indonesia's view, the heightened risk of spoilage under these conditions far outweighs 
any nominal imposition on importers.1986 
7.675.   In response, the co -complainants argue that Indonesia has not d emonstrated, and 
provided no evidence showing, that the protection of life and health is indeed the objecti ve being 
pursued by the measure .1987 Responding to Indonesia's contention that the objective of the 
measure "is to ensure that fruits and meat products for consumption are safe, nutritious and also 
of good quality ".1988 New Zealand recalls that its challenge exclusively relates to horticultural 
products and the requirement that importers own storage facilities with capacity equalling the 
quantity of product imported over a six -month period in a one -to-one ratio .1989 New Zealand 
reiterates that Indonesia's explanation of why importers are only allowed to import products up to 
the maximum capacity of their storage , to "show the importer's commitment to provide foo d that 
is safe for consumption ", is inadequate .1990 In the same vein, t he United States asserts that all the 
evidence presented by the co -complainants suggests that the true objective of Indonesia’s import 
licensing regime for horticultural products is the pr otection of domestic producers from com petition 
from imported products1991 and that Indonesia’s bare assertion to the contrary is not sufficient to 
satisfy the first element of Article XX(b).1992  
                                                
1984 In its second written submission, Indonesia indicated as follows:  
… 
(b)the requirement that imports of fresh horticultural products not be harvested more than six 
months from the date o f importation, the domestic harvest period limitations, restrictions on 
end-use, the harvest time period, limitations for animal products, the storage capacity 
requirement, the positive list, and the reference price are justified under Article XX (b) of th e 
GATT because these measures are necessary for food safety and food security . 
Indonesia's second written submission, para. 207(b). The Panel observes that, although Indonesia has 
indicated a food security objective for Measure  5, the specific argumentatio n put forward by Indonesia with 
respect to Measure 5 does not appear to include food security concerns.  
1985 Indonesia 's second written submission, para. 110; Exhibit IDN -53; opening statement at the second 
substantive meeting, para. 33.  
1986 Indonesia 's first w ritten submission, para. 148.  
1987 New Zealand 's second written submis sion, para. 242 (referring to Appellate Body Report, EC – Seal 
Products, para. 5.144 ). United States ' second written submission, para s. 176-177. 
1988 Indonesia 's second written submission, par as. 110, 116 -119 and 233.  
1989 See New Zealand 's first written submission, paras. 99.  
1990 New Zealand's opening statement at the second substantive meeting of the Panel, para. 78 
(referring to Indonesia 's second written submission, paras. 119, 178, 207(a) and 2 14). 
1991 United States ' second  written submission, para. 177 ( referring to its first written submission, paras. 
16, 84 –85). 
1992 United States ' second  written submission, para. 177 (referring to Appellate Body Report, EC – Seal 
Products , para. 5.144, stating th at panels "should take into account the Member 's articulation of the objective 
or the objectives it pursues through its measures, but it is not bound by that Member 's characterization of such 
objective(s) "). WT/DS477/R • WT/DS478/R  
 
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  7.676.   We recall that this first step  in the analysis  calls for an initi al, threshold examination in 
order to determine whether there is a relationship between an otherwise WTO-inconsistent  
measure and the protection of human, animal or plant life or health .1993 We note that Indonesia 
has identified public health in the sense of food safety as being the objective of this measure. The 
co-complainants do not question that food safety falls under the purview of the protection of 
human, animal or plant life or health under paragraph (b) of Article XX.  
7.677.   Similar to Measure 4,  the co -complainants take issue with the existence of a relationship 
between Measure  5 and the protection of human health.  We proceed to examine the evidence 
regarding the design of the measure at issue, including its content, structure, and expected 
operation.1994 In our analysis, w e understand that a measure that does not expressly refer to a 
public moral objective may still be found to have such a relationship following an assessment of 
the design of the measure at issue, including its content, structure, and expected  operation.1995 In 
this respect, as described  in Section 2.3.2.5 above , Measure 5 consists of the requirement that 
importers must own their storage facilities with sufficient capacity to hold the full quantity 
requested on thei r Import Application.1996 This requirement is implemented by Indonesia through 
Article 8 (1)(e) of MOT 16/2013 , as amended1997, and by Article  8(2)(c)  and (d)  of MOA 86/2013, as 
amended .1998. We recall that, in Section  7.2.9.3 above , we concluded that Measure 5 is inconsistent 
with Article  XI:1 of the GATT 1994 because , by virtue of its design, architecture and revealing 
structure, it constitute s a restriction having a limiting effect on importation .  
7.678.   We observe that nothing in the tex t of the regulations implementing this measure and, in 
particular, Article 8 (1)(e) of MOT  16/2013, as amended, and Article  8(2)(c) of MOA  86/2013, as 
amended , refers to the protection of human, animal or plant life or health as the policy objective of  
Measure 5 . We note that in its initial section, MOT 16/2013, as amended, mentions the 
"protect[ion of] consumers, promot[ion] [of] business certainty and transparency, and [the] 
simplif[ication] [of] the licensing process and the administration of imports "1999 as the basis of this 
regulation. Although it could be argued that the protection of consumers  may fall under the scope 
of the protection of human, animal or plant life or health , an argument that we note Indonesia has 
not put forward, we see no other basis allowing us to conclude that Measure 5 was designed to 
protect human, animal or plant life or health.  
7.679.   Regarding MOA  86/2013, as amended, we recall our analysis in paragraph 7.631 above  
where we found that the text of this r egulation does not lend itself to a conclu sion that it was 
formulated to protect human, animal or plant life or health  or to address  Indonesia's alleged 
concerns on the oversupply of some products during the harvest periods  and its effects on public 
health . Similarly, we find no support in the text of this regulation to conclude that Measure 5 was 
designed  to ensure that fruits, vegetable and meat products for consumption are safe, nutritious 
and of good quality, using proper cold chain systems . 
7.680.   Having exam ined the design of Measure  5, we fail to see any connection with human, 
animal or plant life or health  that could lead us to conclude that Measure  5 is "not incapable "2000 of 
protecting human, animal or plant life or health . Indeed, Measure 5 is concerned wit h requiring 
ownership of the storage facilities and limiting the quantities importers may request in their MOA 
Recommendations and Import Approvals, not with requiring products to be stored in cold facilities.  
                                                
1993 See Appellate  Body Report, Colombia – Textiles , para.  5.67, in the context of Article  XX(a) and 
Argentina – Financial Services , para.  6.203, in the context of Article  XIV(c) of the GATS, which mirrors 
Article  XX(d) of the GATT  1994.  
1994 See Appellate  Body Reports, US – Shrimp , paras. 135-142; EC – Seal Products , para.  5.144; 
Colombia – Textiles , para.  5.68. 
1995 Appellate  Body Report, Colombia – Textiles , para.  5.69, in the context of Article  XX(a) of the 
GATT  1994.  
1996 New Zealand's Panel Request , pp. 1 -4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, para. 99; United  States'  first written submission, para. 66.    
1997 Article 8 of MOT 16/2013, as amended by M OT 47/2013, provides as follows that: " (1) To receive 
Confirmation as a RI -Horticultural Products, as described in Article  3, a company must submit an electronic 
application to the Minister and the UPP Coordinator and Implementer, and attach  … e. Proof of ownership of 
storage facilities appropriate for the product 's characteristics… " Exhibit JE -10. 
1998 Article 8(2)(c) and (d) o f MOA 86/2013 relevantly provides: " (2) Issuance of RIPH for fresh produce 
for consumption, in addition to meeting the administrative requirements as intended in paragraph (1) item a 
must be accompanied with the following technical requirements:  … c. state ment of ownership of storage and 
distribution facilities for horticulture products according to their characteristics and product type ; d. statement 
of suitability of storage capacity  …", Exhibit JE -15. 
1999 Exhibit JE -15. 
2000 Appellate  Body Report, Colombia – Textiles , para.  5.68. WT/DS477/R • WT/DS478/R  
 
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  7.681.   We observe that Indonesia supports its conten tion that Measure 5 is intended to ensure 
that fruits, vegetable and meat products for consumption are safe, nutritious and of good quality, 
using proper cold chain systems , by submitting Exhibit IDN -53 and IDN -82. We observe that 
Exhibit IDN -53 contains a  scientific publication about antimicrobial and antioxidative strategies to 
reduce pathogens and extend the shelf life of fresh red meats and how chiller storage inhibits the 
growth of some bacteria responsible for the spoilage of meat. We agree with the c o-complainants 
that this Exhibit is irrelevant for the purpose of defending Measure 5 because it refers to meat in 
cold storage facilities instead of horticultural products. Furthermore, Exhibit IDN -53 does not 
address the core elements of Measure 5, namel y requiring ownership of storage facilities with 
sufficient capacity to hold the full quantity reques ted on Import Applications.2001 Similarly, Exhibit 
IDN-82, which  contains certain guidelines to assure maximum quality and minimum spoilage of 
fruits and vege tables , does not explain how  ownership  of storage by importers  is connected to the 
protection of human , animal or plant  life or health .2002 
7.682.   We therefore conclude that  Indonesia has not demonstrated that there is a relationship 
between Measure  5 and the protec tion of human, animal or plant life or health . Accordingly, we 
find that Indonesia has not demonstrated that Measure  5 is provisionally justified under 
subparagraph  (b) of Article XX of the GATT  1994.  
7.3.10.2.4   Conclusion  
7.683.   In the light of the foregoing, we find that Indonesia has failed to demonstrate that 
Measure  5 is justified under Article  XX(b) of the GATT  1994.   
7.3.11   Whether Measure  5 (Storage ownership and capacity requirement) is justified 
under Article  XX(d) of the GATT  1994  
7.3.11.1   Arguments of the parties  
7.3.11.1.1   Whether Measure  5 is provisionally justified under subparagraph  (d) of 
Article  XX of the GATT  19942003 
7.3.11.1.1.1   Indonesia  
7.684.   Indonesia asserts that the storage capacity requirement is necessary to secure compliance 
with customs enforce ment, especially considering Indonesia's  limited ad ministrative, economic and 
human resources available for that purpose. Hence, Indonesia claims that ensuring that all 
importers have facilities to store horticultural imports immediately upon arrival and providing 
government officials with advance informat ion about such facilities ( i.e. before arrival), is 
necessary to the proper operation of its customs laws and regulations.2004 Furthermore, the 
storage capacity requirement "is essential to ensure customs officials "2005 that proper storage 
related to human healt h is being carried out. Indonesia asserts that, in essence, this requirement 
fulfils the technical and administrative aspects of import health requirements.2006 
7.3.11.1.1.2   New Zealand  
7.685.   New Zealand asserts that Indonesia has not demonstrated that customs enforcement is 
the objective of its measure  and failed to identify the specific provisions of the "laws or 
regulations " with which the storage ownership and capacity requirement is "necessary to secure 
compliance ", merely listing a few titles of laws and regulations relati ng to cust oms, quarantine and 
food safety  and claiming that these provide the justification for the storage capacity 
requirements.2007 According to New Zealand, the design of the measure suggests that its real 
objective is to limit imports.2008 New Zealand argue s that, even if the first element of Article  XX(d) 
                                                
2001 New Zealand's'  response to Panel question No.  123. United States ' response to Panel question 
No. 123. 
2002 Exhibit IDN -82. 
2003 For the general arguments concerning this step in Indonesia's defence under Article XX(d) of the 
GATT  1994, see Section  7.3.5.1.1  above.  
2004 Indonesia's first written submission, para. 149; second written submission, para. 207.  
2005 Indonesia's second written submission, para. 246.  
2006 Indonesia's second written submission, paras. 241 and  246. 
2007 New Zealand's second written submission, paras. 237 and 239 (referring to Indonesia's responses to 
Panel question No. 71).  
2008 See New Zealand's first written submission, paras. 243 -248. WT/DS477/R • WT/DS478/R  
 
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  of the GATT 1994 were satisfied, Indonesia has not explained why the measure is "necessary to 
ensure compliance " with customs laws and regulations. New Zealand considers that the connection 
between the sto rage ownership and capacity requirement and customs enforcement remains 
unclear, including with respect to the contribution of the measure towards fulfilling the objective. 
For these reasons, New Zealand submits that Indonesia has not established that its storage 
ownership and capacity requirement is "necessary " for customs enforcement purposes.2009 
7.686.   From New Zealand's viewpoint, Indonesia has not adopted this measure to protect or 
secure compliance with the objectives cited in Article XX(d), nor has it shown t he contribution of 
this measure to such objectives. New Zealand finds that the trade -restrictiveness of the measure 
outweighs Indonesia’s purported justification for it. Consequently, New Zealand considers that it is 
not required to elaborate on an alterna tive measure. However, New Zealand suggests that a less 
trade -restrictive alternative could involve Indonesia being more flexible about the types of storage 
arrangements it regards as acceptable, both as to ownership and volume. These storage 
arrangements would need to be non -discriminatory, applying equally to imported and 
domestically -produced horticultural products.2010 
7.3.11.1.1.3   United States  
7.687.   The United States submits that Indonesia's defence of the storage capacity requirement is 
based on flawed legal and factual p remises and is insufficient to sustain a defence under 
Article  XX(d) of the GATT 1994. Indonesia has not shown that the measure is, in fact, designed "to 
secure compliance " with customs enforcement, let alone that it is "necessary ". According to the 
United  States, Indonesia's defence would fail even if it had identified a WTO -consistent law or 
regulation.2011 
7.688.   The United States argues that Indonesia has not explained the relevance of importers’ 
ownership of storage capacity to enforcement of Indonesia’s customs  laws. Even assuming that 
problems may arise due to inadequate storage of horticultural products, a theoretical problem 
about which Indonesia has not presented any evidence, such problems would presumably arise 
after the products have already entered Indon esia – that is, after customs clearance. Thus, from 
the perspective of the United States, it is unclear how a storage capacity ownership requirement 
could contribute to customs enforcement. 2012  
7.689.   The United States argues that Indonesia does not explain or jus tify the two most trade -
restrictive aspects of the storage capacity requirement, i.e., the requirement to own storage 
capacity and the one -to-one ratio of owned storage capacity to total allowed imports during a 
semester. In its view, both features signifi cantly limit the quantity of horticultural products that 
importers can apply for, compared to what they would import under normal commercial 
circumstances.2013 The United States observes, however, that neither of these requirements relate 
to Indonesia’s expla nation of the purpose of the measure.  
7.690.   The United States suggests two less trade -restrictive alternatives to achieve the objective 
of ensuring importers can store their horticultural products on arrival and providing officials with 
information on these faci lities in advance: (i) to remove the ownership and one -to-one ratio 
requirements and to allow importers to lease storage capacity and to account for inventory 
turnover during a semester in their import approval applications; (ii) to allow importers to tran sfer 
products directly to a distributor’s warehouse from the port of entry.2014 
7.3.11.1.2   Whether Measure  5 is applied in a manner consistent with the chapeau  of 
Article XX  
7.691.   Concerning the parties' arguments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
                                                
2009 New Zealand's second written submission, paras. 239 -240. 
2010 New Zealand's second written submission, para. 247.  
2011 United States' second written submission, paras. 153 and 156.  
2012 United States' second written submission, para. 154.  
2013 United States' second written submission, para. 155 (referring to its first written s ubmission, 
paras.  187-191).  
2014 United States' second written submission, para. 155; opening statement, para. 28.  WT/DS477/R • WT/DS478/R  
 
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  7.3.11.2   Analysis by the Panel  
7.692.   We have found in Section  7.3.5.2.3 above  that Indonesia has failed to identify specific 
rules, obligations, or requirements contained in WTO -consistent l aws or regulations for the 
purpose of its defence under Article  XX(d) of the GATT  1994. Given that Indonesia's arguments 
concerning the identification of WTO -consistent laws or regulations for the purpose of its defence 
under Article  XX(d) of the GATT  1994 were submitted with respect to all the relevant measures at 
issue, including Measure  5, we find that Indonesia has not demonstrated that Measure  5 is 
provisionally justified under subparagraph  (d) of Article  XX of the GATT  1994.  
7.693.   We therefore find that In donesia has failed to demonstrate that Measure  5 is justified 
under Article  XX(d) of the GATT  1994.  
7.3.12   Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products ) is justified under Article  XX(a) of the GATT  1994  
7.3.12.1   Arguments of the Pa rties 
7.3.12.1.1   Whether Measure 6 is provisionally justified under subparagraph  (a) of 
Article  XX of the GATT  1994  
7.3.12.1.1.1   Indonesia  
7.694.   Indonesia asserts that the end -use limitations are necessary to protect public morals in 
that they protect the people of Indonesia from non -Halal horticultural products.2015 Indonesia 
explains that, while most Halal requirements pertain to the production and consumption of animal 
products, strict storage and transportation requirements apply to all food products.2016 According 
to Indonesia, consumers  generally assume that all the food sold in traditional open -air markets is 
Halal, and no widely -used labelling system is in place to warn them about non -Halal food. In 
Indonesia's view, implementing such a labelling system would be logistically impossible  to monitor 
or enforce. For this reason, Indonesia believes that preventing consumer deception is best 
achieved by limiting imported horticultural products to end uses that naturally require some 
degree of labelling, for example listing food items on resta urant menus.2017 
7.3.12.1.1.2   New Zealand  
7.695.   New Zealand submits that Indonesia's argument does not meet the standard of 
Article  XX(a) of the GATT 1994.2018 In its view, Indonesia has not demonstrated that the objective 
of the measure is to protect public morals or the religiou s beliefs of the Indonesian people and the 
bare assertion of an objective is insufficient.2019 New Zealand does not consider that preventing 
consumer deception regarding the Halal status of horticultural products is the real objective of the 
restrictions on u se, sale, and distribution of imported horticultural products. New Zealand observes 
that the relevant legal instruments through which the measure is implemented do not include a 
reference to Halal and, to New Zealand’s knowledge, Indonesia has no Halal cer tification 
requirements for imported horticultural products.2020 
7.696.   New Zealand contends that, even if the first element of Article XX(a) of the GATT 1994 
were satisfied, Indonesia has not explained why the measure is "necessary to protect public 
morals ". In New  Zealand's view, the design of the measure suggests otherwise: the measure 
forbids RIs from selling imported horticultural products directly to consumers or retailers, instead 
requiring them to trade and/or transfer such products to a distributor.2021 However , it argues, 
"there is no restriction on such products being on -sold in traditional markets by the 
distributor ".2022 New Zealand therefore holds that Indonesia's claim that the measure is necessary 
                                                
2015 Indonesia's first written submission, paras 158 –159 and 166; oral statement at the first substantive 
meeting, para. 34; response to Advanced q uestion No. 35.    
2016 Indonesia's first written submission, para. 158.  
2017 Indonesia's first written submission, para. 159.  
2018 New Zealand's second written submission, paras. 252 –256. 
2019 New Zealand's second written submission, para. 253 (referring to Appellate  Body Report, EC – Seal 
Products , para. 5.144).  
2020 New Zealand's second written submission, para. 253.  
2021 New Zealand's second written submission, para. 254 (referring to its first written submission, 
para. 106 and referring to Article 15 of MOT 16/2013  (Exhibit JE -8)). 
2022 New Zealand's second written submission, para. 254.  WT/DS477/R • WT/DS478/R  
 
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  to prevent consumer deception in traditional open -air markets  does not make sense since 
imported horticultural products can be sold in traditional open -air markets. Further, Indonesia 
does not even attempt to justify on Halal grounds the prohibition on PIs trading or transferring 
horticultural products imported as r aw materials or supplementary materials for industrial 
production processes.2023 Accordingly, in New Zealand’s view, Indonesia’s restrictions on the use, 
sale and distribution of imported horticultural products make no contribution to the protection of 
public  morals by preventing consumer deception.2024 New Zealand concludes that, in view of its 
lack of contribution to the objectives in Article XX(a) , weighed against its significant trade -
restrictiveness, the measure is not "necessary " in terms of Article XX. In these circumstances, 
New Zealand is not required to elaborate on an alternative measure. 2025 
7.3.12.1.1.3   United States  
7.697.   While agreeing that upholding the Halal food requirements in Indonesia constitutes a 
"public moral " under Article XX(a) of the GATT 1994, the United St ates submits that Indonesia has 
failed to demonstrate that the use, sale, and transfer restrictions  of Measure  6 were adopted, 
enforced, or designed to protect Halal requirements for horticultural products.2026 Recalling the 
premises under which RIs are requi red to sell imported horticultural products to distributors 
(prohibiting them from selling directly to consumers and retailers); and PIs to only use imported 
horticultural products as materials in their production process (prohibit ing them from selling or 
transferring these products)2027, the United States argues that Indonesia must first show that the 
objective of the use restrictions is to protect consumers from mistakenly consuming non -Halal 
foods. In its view, o nly after this demonstration is made may the Panel inquire as to whether the 
measure is "'necessary' to protect such public morals ".2028 
7.698.   Based on the design, architecture and revealing structure of the measure, beginning with 
the text of the measure itself, as well as all other available evidence in ass essing the connection 
between the measure at issue and the protection of the public moral2029, the United States 
contends that the texts of the legal instruments setting forth the use, sale, and transfer 
restrictions, do not indicate that the objective of th e restrictions is to uphold Halal requirements for 
horticultural products.2030 Further, the referenced Horticulture Law, statutory authority for the MOA 
and MOT regulations, also do es not identify Halal as one of its objectives.2031 The United States 
could not id entify any reference to Halal requirements in these texts. The United States argues 
that Indonesia fails to provide any legislative history, public statements, reports or other evidence 
                                                
2023 New Zealand's second written submission, para. 254.  
2024 New Zealand's second written submission, para. 255.  
2025 New Zealand's second written submission, para. 261.  
2026 United States' second wri tten submission, para. 207.  
2027 United States' second written submission, paras. 205 (referring to United States' first written 
submission, para. 193; and New Zealand's first written submission, para. 251).  
2028 United States' second written submission, para. 206 (referring to Appellate Body Report,  EC – Seal 
Products, para. 5.169 ). 
2029 United States' second written submission, para. 208 (referring to Appellate Body Report, EC – Seal 
Products , para. 5.144).  
2030 United States' second written submission, para. 208 (r eferring to MOA 86/2013, Exhibit JE -15; MOT 
16/2013, as amended by MOT 47/2013, Exhibit JE -10).   
2031 United States' second written submission, para. 208 (referring to the Horticulture Law, Exhibit JE -1). 
The United States notes that Indonesia has yet to exp lain how the Halal standards requirements and labelling 
requirements apply to fresh horticultural products. The two measures cited by Indonesia in its response to the 
Panel's questions appear to apply primarily to "packed foods." Article 10 of Government R egulation No. 
69/1999 on Food Labels and Advertisements, 1999 , Exhibit USA -104 (stating: "Anybody producing or 
importing packed food into…Indonesia for trading and declaring that the said food is permissible for Moslems, 
shall…put the information or word ' halal' on labels."); Decree  of the Minister of Religious Affairs No. 518/ 2001 
on the Guidelines and Procedures for Auditing and Stipulating Halal Food, Exhibit USA -105 (Article 2.1 states 
that: "to support the truth of halal statements issued by producers  or importers of food packed for trading, the 
Auditing Agency audits the food first").  
The United States also notes that Indonesia has failed to respond to Advanced Panel Question no. 35(a) 
regarding whether the "technical enquiries" carried out by survey ors on all horticultural products include 
verifying whether the products comply with Halal requirements.  Under MOT 16/2013, as amended by 
MOT 47/2013, the required verification or technical inquiry must include examining and verifying the country of 
origin , port of origin, type, volume, shipping time, port of destination, and various health and technical 
certificates of the prospective horticultural product imports. Article 22(1) of MOT 16/2013, as amended (Exhibit 
JE-10). In keeping with this scope, the do cuments importers must submit for verification include the 
companies taxpayer ID number, registration card, business license, import identification number, PI or RI 
license, and Import Approval for the relevant period; SUCOFINDO, "Horticulture, " (updated F eb. 11, 2016 , 
Exhibit USA -80 (t here is no mention of any Halal requirements in either MOT 16/2013 or in SUCOFINDO's 
application documents).  WT/DS477/R • WT/DS478/R  
 
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  to show the connection between the restrictions on imported products a nd Halal requirements. The 
United States notes that the measures referenced by Indonesia relate to Halal food labelling, 
speaking to the existence of Halal requirements as a public moral in Indonesia, a point that the 
United States does not dispute. Accord ing to the United States, these measures do not show that 
the use, sale and transfer restrictions were adopted to protect consumers from non -Halal foods.2032 
In the United States' view, Indonesia has failed to demonstrate the connection between these 
restrict ions and the protection of Halal requirements. 2033 
7.699.   The United States considers that , even if Indonesia could show that the protection of Halal 
requirements is an objective, the restrictions are not necessary to protect consumers from 
purchasing non -Halal hor ticultural products in traditional, open air, or other markets. Under a 
necessity analysis, the Panel should consider the contribution of the restrictions to protecting 
consumers from non -Halal products and the trade restrictiveness imposed by the challeng ed 
measures.2034 In this regard, the United States stresses that the sales restrictions limit the person  
to whom the imported horticultural products may be sold upon entry, not the products’ ultimate 
points of sales , meaning that the measure does not prohibit  the distributors from later selling the 
same imported products to consumers or retailers at traditional or other markets. Because the 
measure does not restrict the ultimate points of sale to consumers, the United States considers 
that restricting the init ial sale to distributors does not contribute to consumers’ ability to 
distinguish Halal from non -Halal horticultural products in the markets.2035 
7.700.   Countering Indonesia's contention that its measures operate by limiting imported 
horticultural products to "uses that naturally require some degree of labelling (e.g. listing food 
items on restaurant menus) " 2036, the United States finds that the argument is inapposi te to the 
restrictions at issue2037: none of the relevant legal instruments or available evidence suggest th at 
distributors of imported horticultural products are subject to a stricter Halal labelling requirement, 
or explain how restricting sales to distributors is a use that "naturally require[s] some degree of 
labelling. " Therefore, requiring imported horticul tural products to pass through distributors does 
not further distinguish Halal from non -Halal products. Hence, since the same imported horticultural 
products reach consumers in the traditional and other markets, the United States maintains that 
the restric tions do not contribute to the protection of public morals.2038 
7.701.   Since Indonesia premises its necessity argument on the assertion that "there is no widely -
used labelling system that could warn consumers " about non -Halal products2039, the United States 
counters th at Indonesia's responses to the Panel appear to suggest otherwise. On whether 
imported horticultural products must comply with Halal requirements, Indonesia said that "food 
producers are responsible for verifying the Halal compliance of any products they w ish to label as 
'Halal'" and that importers must receive a certificate from the Indonesian Council of Ulama (MUI) 
to obtain Halal labelling .2040 Also, on whether distributors must comply with Halal regulations with 
respect to local products, Indonesia respond ed that the Halal regulation "applies equally for local 
and imported products ".2041 For the United  States, it remains unclear from Indonesia’s responses 
whether it requires Halal -labelling for imported horticultural products.2042  
7.702.   The United States argues that, if Indonesia asserts that a Halal labelling system applies to 
horticultural products, and that the system applies to both locally produced and imported 
horticultural products (and is therefore "widely used "), this assertion would also conflict with its 
argument that the use, sale, and transfer restrictions are necessary. The United States therefore 
argues that, if an existing Halal labelling system already warns consumers that certain products, 
including imported products, may not be Halal, then restricting  the sale of imported horticultural 
                                                
2032 United States' second written submission, para. 209 (referring to Indonesia's response to Advanced 
Panel question No. 35, and its responses to Panel question No. 68).   
2033 United States' second written submission, para. 209.   
2034 United States' second written submission, para. 210.  
2035 United States' second written submission, para. 211.  
2036 Indonesia's first written submis sion, para. 159.  
2037 United States' second written submission, para. 211.  
2038 United States' second written submission, para. 212.  
2039 United States' second written submission, para. 213 (referring to Indonesia's first written 
submission, para. 159).  
2040 Indonesia 's response to Advanced Panel question No. 35.  
2041 United States' second written submission, para. 213 (referring to Indonesia's response to Panel 
question No. 68).  
2042 United States' second written submission, para. 214.  WT/DS477/R • WT/DS478/R  
 
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  products only to distributors would not seem to contribute further to the protection the Halal 
standards.2043 
7.703.   With respect to trade restrictiveness, the United States considers that requiring RIs to sell 
only to distributor s imposes significant limitations on importation of horticultural products, forcing 
all economic actors into one distribution model, while adding an artificial level in the supply chain 
increases the cost of imported horticultural products and reduces thei r competitive 
opportunities.2044 The United States suggests that, because the restrictions bear minimal 
connection  to the protection of Halal requirements  and do not make any contribution to achieving 
the objective asserted by Indonesia, a reasonably availabl e alternative would be simply to remove 
such requirements, while maintaining the existing Halal labelling requirements2045 identified by 
Indonesia. The United States believes that this would make an equivalent contribution to public 
morals and would eliminate  the unjustifiable trade -restrictive effect of the measure.  
7.704.   As far as PIs are concerned, the United States notes that Indonesia has not offered any 
evidence or explanation in support of its assertion that the use, sale and transfer restrictions on 
horticul tural products imported by PIs is justified under Article  XX(a). The United States submits 
that Indonesia also fails to articulate how requiring PIs to use imported horticultural products only 
in their own industrial production, and prohibiting them from s elling or transferring imported 
products to another entity, is necessary. Thus, the United States maintains that Indonesia has also 
failed to make its Article XX(a) prima facie  case with respect to the use, sale and transfer 
restrictions for PIs.2046  
7.3.12.1.2   Whether  Measure  6 is applied in a manner consistent with the chapeau  of 
Article XX  
7.705.   Concerning the parties' arguments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
7.3.12.2   Analysis by the Panel  
7.3.12.2.1   Introduction  
7.706.   The task before the Panel is to determine whether Measure  6 (Use, sale and distribution 
requirements for horticultural products ) is justified under Article XX(a) of the GATT  1994. We 
commence with the text of the relevant provision and the ensuing legal st andard.  
7.3.12.2.2   The relevant legal provision  
7.707.   Article XX of the GATT 1994 reads, in relevant part, as follows:  
Article XX  
General Exceptions  
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unj ustifiable discrimination between countries 
where the same conditions prevail, or a disguised restriction on international trade, 
nothing in this Agreement shall be construed to prevent the adoption or enforcement 
by any Member of measures:  
 (a) necessary to protect public morals  
 … 
                                                
2043 United States' second written submis sion, para. 214.  
2044 United States' second written submission, para. 215 (referring to its first written submission, 
para. 194).  
2045 United States' second written submission, para. 216 (referring to Government Decree 69/1999 on 
Food Labels and Advertisements  (Exhibit USA -104); and Decree of the Mi nister of Religious Affairs 
No. 518/2001 on the Guidelines and Procedures for Audit ing and Stipulating Halal Food ( Exhibit US A-105)). 
2046 United States' second written submission, para. 217.  WT/DS477/R • WT/DS478/R  
 
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  7.708.   Concerning the legal standard under this provision, we refer to Section  7.3.9.2.2 above . 
We shall therefore proceed to examine whether Indonesia  has demonstrated that Measure  6 is 
justified under  Article XX( a) of the GATT  1994.  As we indicated in Section  7.3.1 above , Indonesia 
has only provided arguments on a measure by measure basis with respect to the first tier of the 
analysis, i.e. whether the measures at issue a re provisionally justified under the relevant 
subparagraph of Article XX of the GATT  1994. The second tier, i.e. whether the measures at issue 
are applied in a manner consistent with the chapeau  of Article XX , has been argued by Indonesia 
for its import li censing regimes as a whole, thus making no distinctions between measures. Under 
these circumstances, we are driven to follow the same approach in our analysis.  
7.3.12.2.3   Whether Indonesia has demonstrated that Measure  6 (Use, sale and 
distribution requirements for h orticultural products ) is provisionally justified under 
subparagraph  (a) of Article  XX of the GATT  1994  
7.709.   Under this tier of our analysis, the task before the Panel is to establish whether, as claimed 
by Indonesia, Measure  6 is provisionally justified by sub paragraph  (a) of Article XX  of the 
GATT  1994. As explained before, we shall examine whether Indonesia has demonstrated that 
Measure  6 is designed to protect public morals and, if so, whether it is necessary for such 
protection.  
7.710.   Concerning the first elemen t, i.e. whether Measure  6 is designed to protect public morals, 
we note that Indonesia has argued that the end -use limitations are necessary to protect public 
morals from non -Halal horticultural products.2047 According to Indonesia, consumers generally 
assume  that all the food sold in traditional open -air markets is Halal, and no widely -used labelling 
system is in place to warn them about non -Halal food. Indonesia believes that preventing 
consumer deception is best achieved by limiting imported horticultural p roducts to end uses that 
naturally require some degree of labelling, for instance listing food items on restaurant menus.2048  
7.711.   The co -complainants disagreed and argued that Indonesia has not demonstrated that 
Measure  6 is designed to protect consumers from mi stakenly consuming non -Halal foods .2049 In 
particular, New Zealand submitted that a bare assertion of an objective is insufficient.2050 
New Zealand did not consider that preventing consumer deception regarding the Halal status of 
horticultural products is the re al objective of the restrictions on use, sale, and distribution of 
imported horticultural products. New Zealand observe d that the relevant legal instruments through 
which the measure is implemented do not include a reference to Halal and, to New Zealand’s 
knowledge, Indonesia has no Halal certification requirements for imported horticu ltural 
products.2051 The United States, w hile agreeing that upholding the Halal food requirements in 
Indonesia constitutes a "public moral " under Article XX(a) of the GATT 1994, submitted that 
Indonesia has failed to demonstrate that the use, sale, and transfer restrictions were adopted, 
enforced, or designed to protect Halal requirements for horticultural products.2052 Furthermore, the 
United States noted that Indonesia has yet to e xplain how the Halal standards requirements and 
labelling requirements apply to fresh horticultural products.2053 
7.712.   We recall that this first step  in our analysis  calls for an initial, threshold examination in 
order to determine whether there is a relationship between an otherwise WTO-inconsistent  
measure and the protection of public morals .2054 We note that Indonesia has identified the public 
moral at issue as being the protection of Halal and, in particular, preventing consumer deception 
from non -Halal horticultu ral products.2055 As observed in paragraph 7.653 above , the 
co-complainants do not question that Halal is a public moral. What the co -complainants question is 
the existence of a relationship between Measure  6 and preventing con sumer deception from non -
                                                
2047 Indonesia's first written s ubmission, paras. 158 -159 and 166; oral statement at the first substantive 
meeting, para. 34; response to Advanced question No. 35.    
2048 Indonesia's first written submission, para. 159.  
2049 New Zealand's second written submission, paras. 252 -256; United Stat es' second written 
submission, para. 209.  
2050 New Zealand's second written submission, para. 253 (referring to Appellate Body Report, EC – Seal 
Products , para. 5.144).  
2051 New Zealand's second written submission, paras. 253 -254. 
2052 United States' second written  submission, para. 207.  
2053 United States' second written submission, fn. 318.  
2054 See Appellate  Body Report, Colombia – Textiles , para.  5.67, in the context of Article  XX(a) and 
Argentina – Financial Services , para.  6.203, in the context of Article  XIV(c) of the GATS, which mirrors 
Article  XX(d) of the GATT  1994.  
2055 Indonesia's first written submission, paras. 158 -159 and 166; oral statement at the first substantive 
meeting, para. 34; response to Advanced question No. 35.    WT/DS477/R • WT/DS478/R  
 
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  Halal horticultural products .2056 For the co -complainants, there are no Halal regulations applicable 
to fresh horticultural products because they are inherently Halal. As mentioned in paragraph 7.654 
above, Indonesia itself recognizes that many foodstuffs (in particular, meat -free and alcohol -free 
foodstuffs) are inherently Halal, while the Law on Halal Product Assurance confirms that plants 
that do not pose health risks are Halal. In several instances, we have attempted to confirm the 
existence of Halal regulations that would be applicable to horticultural products,  to no avail . As 
also explained in paragraph  7.654 above , Indonesia invariably responds with references to Ha lal 
requirements applicable to animals and animal products.  Hence, we consider that Indonesia has 
not identified the Halal requirements for horticultural products which Measure  6 purportedly 
protects . 
7.713.   Indonesia has explained that, while most Halal requirem ents pertain to the production and 
consumption of animal products, strict storage and transportation requirements apply to all food 
products.2057 We understand that such requirements effectively apply but this does not explain the 
relationship, if any, betwee n Measure  6 and the objective of preventing consumer deception from 
non-Halal horticultural products. We reiterate  that it is incumbent upon Indonesia to demonstrate 
the existence of  a relationship between Measure  6 and the protection of Halal. In our view , the 
bare assertion of an objective is insufficient to meet the burden of demonstrating that a 
relationship exists between the inconsistent measure and a given public moral objective.  
7.714.   We have nevertheless examine d Measure  6 to establish whether such a re lationship can be 
deduced from its design , including its content, structure, and expected operation.2058 We 
understand that a measure that does not expressly fulfil a public moral objective may still be found 
to be connected to that objective  following an ass essment of the design of the measure at issue, 
including its content, structure, and expected operation.2059 We observe that, as described in 
Section 2.3.2.6 above , Measure 6 consists of the  requirements on the importation by PI s and RIs of 
listed horticultural products that limit the use, sale and distribution of the imported products.2060 
Indonesia implements th is Measure by means of Articles 7 , 8, 15 and 26(e) -(f) of MOT 16/2013, 
as amended.2061 Pursuant to these provisions, an impo rter that obtains the recognition as a PI can 
only import horticultural products as raw materials or auxiliary materials for its industrial 
production processes and is thus prohibited from trading and/or transferring them.  Likewise, an 
importer that obtain s the recognition as an RI  can only import horticultural products for 
consumption provided they are traded or transferred to a distributor and not directly to consumers 
or retailers. Designation as RI or PI can be revoked where the relevant importer is pro ven to have 
traded and/or transferred imported horticultural p roducts.2062 We recall that, in Section  7.2.10.3 
above , we concluded that  Measure  6 is inconsistent with Article  XI:1 of the GATT 1994 because , by 
virtue of its design, architecture and revealing structure, it constitute s a restriction having a 
limiting effect on importation . 
7.715.   We note that the wording of the above provisions do es not indicate that the objective of 
the end-use restrictions is to protect the Halal requir ements for horticultural products.2063 Article  7 
of MOT 16/2013, as amended, provides: "Businesses that have received Recognition as a PI -
Horticultural Products can only import Horticultural Products as raw materials  or as supplementary 
materials for the need s of its industrial production process and are prohibited from trading and/or 
transferri ng these Horticultural Products ",2064 Article 15 of  the same regulation  provides: 
"Businesses that have received Confirmation as an RI -Horticultural Products: a. Only can trade 
                                                
2056 New Zealand's second written submi ssion, para. 254; opening statement at the second substantive 
meeting, paras. 74 -75; United States ' oral statement at the second substantive meeting, para . 39, referring to 
its comments on Indonesia's  response s to Panel questions No.  68 and 69; United Stat es' response to Panel 
question No.  76; second written submission, paras. 208 -210. 
2057 Indonesia's first written submission, para. 158.  
2058 See Appellate  Body Reports, US – Shrimp , paras. 135–142; EC – Seal Products , para.  5.144; 
Colombia – Textiles , para.  5.68. 
2059 Appellate  Body Report, Colombia – Textiles , para.  5.69, in the context of Article  XX(a).  
2060 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, paras. 106 -109; United  States'  first written  submission, paras. 70 -72. 
2061 Article 15 of MOT 16/2013, as a mended by MOT 47/2013, provides : "Businesses that have received 
Confirmation as a RI -Horticultural Products:  a. Only can trade and/or transfer imported Horticultural Products 
to a Distributor; and  b. Are forbidden from trading and/or transferring imported Horticultural Products directly 
to consumers or retailers ", Exhibit JE -10. 
2062 Article s 26(e) and 26(f) of MOT 16/2013, as amended , Exhibit JE -10.  
2063 United States' second written submission, para. 208 (referring to MOA 86/2013, Exhibit JE -15; 
MOT 16/2013, as amended by MOT 47/2013, Exhibit JE -10).   
2064 Exhibit JE -10. WT/DS477/R • WT/DS478/R  
 
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  and/or transfer imported Horticultural Products to a Distributor; and b. Are forbidden from trading 
and/or transferring imported Horticultural Products directly to consumers or retailers ".2065  
7.716.   Turning to the broader framework of MOT 16/2013, as amended  by MOT 47/2013 , we 
recall having already examined its stated goals, the laws and regulations that are enumerated in 
the introductory section, as well as the overarching legislation ( i.e. Horticulture Law  and Food Law) 
in the context of our examination of Measure 5 above.2066 In this respect, we recall that we found  
no reference indicating that consumer  protection specifically relates to  Halal requirements that 
would be applicable to  horticultural products ; and that there is no mention of regulations 
addressin g Halal-related requirements, certification or monitoring and surveillance processes in 
any of the relevant MOT and MOA regulations, the Horticulture Law , or the Food Law.  
7.717.   We also observe that MOT 16/2013, as amended mandates that "technical enquiries " be 
carried out by Surveyors on all horticultural product imports at the port of origin.2067 In this 
respect, Article 22(1) of the same regulation  provides that the technical inquiry must include 
examining and verifying the country of origin, port of origin, type , volume, shipping time, port of 
destination, and various health and technical certificates of the prospective horticultural product 
imports. There is no mention of any Halal requirements. As signalled by the United States, the 
accompanying documentation t hat importers must submit in that respect also appears to indicate 
that the verification does not concern , or even take into account, proof of compliance with Halal 
requirements , as far as horticultural products are concerned .2068 We asked Indonesia to clarif y 
whether these "technical enquiries " include verifying if horticultural products destined to Indonesia 
comply with Halal requirements.2069 Indonesia did not respond. We also asked Indonesia to 
identify the specific laws and regulations that require imported horticultural products to comply 
with Halal requirements, whether for fresh or processed products .2070 Again, Indonesia opted not 
to respond to the question. Instead, Indonesia explained that:  
Under GR 69/1999 concerning Food Labelling and Advertisement, food  producers are 
responsible for verifying the halal -compliance of any products they wish to label as 
"Halal". To obtain Halal labelling, importers are required to obtain a certificate from 
the Indonesian Council of Ulama ( "MUI"). Before issuing a certificat e, MUI conducts a 
verification that covers the facilities used for production, storage, transportation, 
distribution, and presentation.  For horticultural products, MUI focuses its verification 
on ensuring that these facilities are separate from facilities  used for non -Halal food 
products. Imported horticultural products that are not labelled as Halal are generally 
presumed to be non -Halal.  
7.718.   We observe that Indonesia's answer refers to domestic food producers, not to the technical 
inquiries at the country of  origin as formulated in our question.  
7.719.   Having examine d the design of Measure  6, we fail to see  any connection with Halal  
requirements that could lead us to conclude that Measure  6 is "not incapable "2071 of protecting the 
public moral of Halal. Indeed, t his m easure does not protect consumers from non -Halal food but 
rather relates to the limitations imposed  by Indonesia on to whom imported horticultural products 
can be sold  directly by importers. In this sense, the final destination of the products is not 
controlled by Measure  6. We understand that ensuring compliance with Halal requirements is done 
through other mea ns than Measure  6. Indeed, GR 66 /1999 concerning Food Labelling and 
                                                
2065 Exhibit JE -10. 
2066 See paragraph 7.657 . 
2067 Articles 21 -23 and 25 of MOT 16/2013, as amended by MOT 47/20 13, Exhibit  JE-10.  
2068 SUCOFINDO, "Horticulture, " (updated 11 February  2016),  Exhibit USA -80, showing that the relevant  
application document s include the company taxpayer ID number, registration card, business license, import 
identification number, PI or RI  license, and Import A pproval for the relevant period . 
2069 Panel question No.  35(a) read as follows:  
With respect to horticultural products,  
(a) Articles 21 -23 and 25 of MOT 16/2013, as amended by MOT 47/2013 mandate that "technical 
enquiries" be carried ou t by Surveyors on all horticultural product imports at the port of origin. 
Does this activity include verifying whether horticultural products destined to Indonesia comply 
with Halal requirements?  
2070 Panel question No.  35(b) read as follows:  
With respect to  horticultural products,  
… 
(b) Please identify the specific laws and regulations that require imported horticultural products 
to comply with Halal requirements, whether for fresh or processed products.  
2071 Appellate  Body Report, Colombia – Textiles , para.  5.68. WT/DS477/R • WT/DS478/R  
 
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  Advertisement specifically provides that "[a]nybody producing or importing packe d food into the 
territory of Indonesia for trading and declaring that the said food is permissible for Moslems, shall 
be responsible for the truth of the statement and put the information or word 'halal' on labels ".2072 
It also provides that "anybody producin g or importing packed food into the territory of Indonesia 
for trading shall have the said food first examined by accredited inspection agencies pursuant to 
the laws in force ".2073 Hence, in both RI and PI cases, we do not see any relationship between the 
end-use limitations and the need to ensure compliance with Halal requirements.  
7.720.   We therefore conclude that Indonesia has not demonstrated the existence of  a relationship 
between Measure  6 and the protection of the public moral of Halal . Accordingly, we find th at 
Indonesia has not demonstrated that Measure  6 is provisionally justified under subparagraph  (a) of 
Article  XX of the GATT  1994.  
7.3.12.2.4   Conclusion  
7.721.   In the light of the foregoing, we find that Indonesia has failed to demonstrate that 
Measure  6 is justified under  Article  XX(a) of the GATT  1994.  
7.3.13   Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products ) is justified under Article  XX(b) of the GATT  1994  
7.3.13.1   Arguments of the Parties  
7.3.13.1.1   Whether Measure 6 is provisionally justified under subparagra ph (b) of 
Article  XX of the GATT  1994  
7.3.13.1.1.1   Indonesia  
7.722.   Indonesia argues that its end use limitations are necessary to protect human, animal or 
plant life or health, and to secure compliance with Indonesia's food safety requirements in 
accordance with Article XX s ubparagraphs (b) and (d). In particular, Indonesia contends that 
Measure  6 is necessary to secure compliance with food safety requirements. Indonesia submits 
that, by limiting the distribution channels available to certain imports, Indonesian officials wit h 
limited resources are better able to track the origin of products that contain pathogenic bacteria 
and therefore reduce the spread of such bacteria into the food supply of the general public. 
According to Indonesia, these measures ensure that imported ho rticultural products are moved 
through channels of distribution that are highly traceable, as opposed to through the ephemeral 
network of open air markets, and are vital to protect the public from the consequences of food -
borne pathogens.2074  
7.723.   Indonesia submi ts that MOT 71/2015 and MOA 86/2013 for horticultural products and 
MOT 5/2016 and MOA 58/2015 for animals and animal products as a whole were enacted to 
protect food safety for human consumption.2075 In particular with respect to the end -use 
requirements, Ind onesia argues that preventing frozen meats from being sold in traditional 
markets also protects food safety for the Indonesian people because of the danger that arise s from 
freezing, thawing, and refreezing meats. Indonesia maintains that its traditional m arkets have a 
very limited , if any , cold chain system, which affects meat quality and texture .2076 
7.3.13.1.1.2   New Zealand  
7.724.   Further to New Zealand's observation regarding Indonesia's tendency to conflate its 
defences under Article XX(b) and Article XX(d)2077, New Zealand sub mits that Indonesia's 
argument does not meet the standards of Articles XX(b) or (d), and that, in any case, Indonesia 
                                                
2072 Article  10(1) of GR  66/1999, Exhibit USA -104. 
2073 Article  11(1) of GR  66/1999, Exhibit USA -104. 
2074 Indonesia 's first written submission, para. 160; first opening statement, para. 34.  
2075 Indonesia 's second written submission, para. 110.  
2076 Indonesia 's second written submission , para.  110 ( referring to Corina Gambuteanu, Daniela Borda 
and Petru Alexe, The Effect of Freezing and Thawing on Technological Properties of Meat: Review, p. 89, 
available at http://www.journal -of-agroalimentary.ro/admin/articole/48 037L15_Vol_19_1_2013_88 -92.pdf, 
Exhibit IDN -57).  
2077 New Zealand's second written submission, para. 256 (referring to Indonesia's first written 
submission, para. 160; Indonesia's first opening statement, para. 34).  WT/DS477/R • WT/DS478/R  
 
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  has not demonstrated that the restrictions are intended to protect human health under Article 
XX(b).2078 According to New Zealand, there is n o evidence from the text of the regulations or their 
operation that the restrictions have the objective of protecting human health. Even if the first 
element of Article XX(b) were satisfied, Indonesia has not explained how the measure contributes 
to protec ting human health; and there is no evidence that the requirements would indeed reduce 
the spread of pathogens into the food supply. In New Zealand's view, the requirements add an 
extra distribution layer in the supply chain for fresh horticultural products  imported for 
consumption, which would even appear to add to the difficulties of tracking pathogens in the food 
supply.2079 
7.725.   Responding to Indonesia's concerns regarding the risks posed by the sale of frozen meats 
and by the limited cold chain system in its tr aditional markets2080, New Zealand contends that no 
relevant evidence was produced that demonstrated that protecting human health was the reason 
for Indonesia's restrictions on sales of imported meat in traditional markets, or that imported meat 
sold in tradi tional markets poses a greater risk to human health than locally -slaughtered meat.2081 
Furthermore, exhibits supplied by Indonesia either: (i) show that frozen meat is safe provided it 
was safe when frozen, and that when thawed, microbes will become active an d multiply, but at the 
same rate as in fresh meat2082; or (ii) relate to food quality not food safety. 2083 In this respect, 
New Zealand holds that Indonesia's repeated arguments based on "meat quality and texture "2084 
are not only unsubstantiated but also irreleva nt to an Article XX(b) defence.2085  
7.726.   New Zealand concludes that, in view of its lack of contribution to the objectives in 
Article  XX(b) weighed against its significant trade -restrictiveness, the measure is not "necessary ". 
Thus, New Zealand believes that it i s not required to elaborate on an alternative measure. 
However, New Zealand suggests that a less trade -restrictive alternative measure might involve 
public education programmes on the importance of safe food handling and for the Indonesian 
Government to ta ke any practicable further steps to improve the standards of hygiene at 
traditional markets, for both imported and domestic products.2086 
7.3.13.1.1.3   United States  
7.727.   The United States argues that Indonesia’s defence under Article XX(b) of the GATT must 
fail as Indonesia ha s not shown that the use, sale, and transfer restrictions on horticultural 
products are necessary to protect human health, or even that they pursue this objective.2087 
According to the United States, Indonesia does not point to any evidence in the text, struc ture, or 
operation of the measure that "the objective pursued by " the measure is the protection of human 
health: for example, there is no evidence that Indonesia imposes any requirements on distributors 
to track in any way the products that they buy from i mporters and sell to retail markets, including 
traditional wet markets; nor are there any statements on the record, or in the text of the 
regulations, suggesting that these requirements serve a health -related purpose.2088  
7.728.   The United States considers that, ev en if the measure pursued an objective covered by 
Article XX(b) of the GATT 1994, no contribution to that objective has been shown, and certainly 
not one that meets the "necessary " standard.2089 In its view, Indonesia appears to be justifying the 
wrong measur e.2090 The United States explains that the challenged measure limits the persons to 
whom imported horticultural products can be sold, not the products’ ultimate destination.  Thus, 
imported products can be, and are, sold through open air markets, provided the y are first sold to a 
                                                
2078 New Zealand 's second written submission,  para. 260.  
2079 New Zealand 's second written submission, para. 260.  
2080 Indonesia 's second written submission, para. 110.  
2081 New Zealand 's opening statement at the second substantive meeting, paras. 68 -69; response to 
Panel question No.  123. 
2082 Exhibit IDN -79. 
2083 Exhibit IDN -57. 
2084 Indonesia 's second written submission, paras. 109 ( "establish quality… requirements "), 110, 193 
and 225.  
2085 New Zealand 's opening statement at the second substantive meeting, paras. 69 -71. 
2086 New Zealand 's second written submission, para. 261. 
2087 United States ' second written submission, paras. 181 and 184.  
2088 United States ' second written submission, para. 182  (referring to  Appellate Body Report, Brazil – 
Retreaded Tyres , paras. 144 -145; Appellate body Report, EC – Seal Products , para. 5.169 , clarifying that, for  a 
defence  under Article XX(a), the responding Member had to show: (1) "that it has adopted or enforced a 
measure 'to protect public morals; '" and, (2) that the measure is "'necessary ' to protect such public morals "). 
2089 United States ' second written submission, para. 183.  
2090 United States ' oral statement at the first substantive meeting, para. 35.  WT/DS477/R • WT/DS478/R  
 
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  distributor. In that sense, the United States finds that the requirement lengthens the supply  chain, 
likely making tracking more difficult. Further, Indonesia has not justified the prohibition on PIs to 
transfer or sell imported produ cts not used in their production process. Thus, because the measure 
makes no , or little , contribution to the objective, the United States suggests that a less trade -
restrictive alternative would be to eliminate the requirement and for Indonesia to continue  to rely 
on its health and SPS requirements for preventing the spread of pathogenic bacteria.2091   
7.3.13.1.2   Whether Measure  6 is applied in a manner consistent with the chapeau  of 
Article XX  
7.729.   Concerning the parties' arguments about the chapeau  of Article XX of the GAT T 1994, see 
Section  7.3.5.1.2 above . 
7.3.13.2   Analysis by the Panel  
7.3.13.2.1   Introduction  
7.730.   The task before the Panel is to determine whether Measure  6 (Use, sale and distribution 
requirements for horticultural products ) is justified under Arti cle XX(b) of the GATT  1994. We 
commence with the text of the relevant provision and the ensuing legal standard.  
7.3.13.2.2   The relevant legal provision  
7.731.   Article XX of the GATT 1994 reads, in relevant part, as follows:  
Article XX  
General Exceptions  
Subject to the requi rement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between countries 
where the same conditions prevail, or a disguised restriction on international trade, 
nothing in this Agreem ent shall be construed to prevent the adoption or enforcement 
by any Member of measures:  
 (a) ... 
 (b) necessary to protect human, animal or plant life or health;  
… 
7.732.   Concerning the legal standard under this provision, we refer to Section  7.3.8.2.2 above . 
The task before the Panel is therefore to determine whether Measure  6 (Use, sale and distribution 
requirements for horticultural products ) is justified under Article XX(b) of the GATT  1994. We 
commence by exami ning whether Indonesia has demonstrated that Measure  6 is provisionally 
justified by subparagraph  (b) of Article XX of the GATT  1994.  
7.3.13.2.3   Whether Indonesia has demonstrated that Measure  6 is provisionally 
justified under Article  XX(b) of the GATT  1994  
7.733.   Under th is tier of our analysis, the task before the Panel is to establish whether, as claimed 
by Indonesia, Measure  6 is provisionally justified by subparagraph  (b). As explained before in 
Section  7.3.1 above , we shall examine whet her Indonesia has demonstrated that Measure  6 is 
designed to protect human, animal or plant life or health  and, if so, whether it is necessary for 
such protection .  
7.734.   Concerning the first  element, i.e. whether Measure  6 is designed to protect human, animal 
or plant life or health2092, we note that Indonesia has argued that its end use limitations are 
                                                
2091 United States ' second written submission, para. 183.  
2092 In its second written submission, Indonesia indicated as follows:  
… WT/DS477/R • WT/DS478/R  
 
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  necessary to protect human, animal or plant  life or health, and to secure compliance with food 
safety requirements.2093 According to Indonesia, by limiting the distrib ution channels available to 
certain imports, Indonesian officials with limited resources are better able to track the origin of 
products that contain pathogenic bacteria and therefore reduce the spread of such bacteria into 
the food supply of the general p ublic. Indonesia contends that Measure  6 ensures that imported 
horticultural products are moved through channels of distribution that are highly traceable, as 
opposed to through the ephemeral network of open air markets, and that the Measure is  vital to 
protect the public from the consequences of food -borne pathogens health -related risks.2094 
7.735.   The co -complainants disagreed and submitted that Indonesia has not demonstrated that 
Measure  6 is intended to protect human health under Article XX(b).2095 New Zealand made an 
observation regarding Indonesia's tendency to conflate its defences under Article XX(b) and 
Article  XX(d)2096 and argued that there is no evidence from the text of the regulations or their 
operation that the restrictions have the objective of protecting hu man health.2097 The United 
States agreed and indicated that Indonesia does not point to any evidence in the text, structure, 
or operation of the measure that supports that "the objective pursued by " the measure is the 
protection of human health. For instance,  the United States  argued, there is no evidence that 
Indonesia imposes any requirements on distributors to track in any way the products that they buy 
from importers and sell to retail markets, including traditional wet markets; nor are there any 
statement s on the record, or in the text of the regulations, suggesting that these requirements 
serve a health -related purpose.2098  
7.736.   We recall that this first step  in the analysis  calls for an initial, threshold examination in 
order to determine whether there is a rel ationship between an otherwise WTO-inconsistent  
measure and the protection of human, animal or plant life or health .2099 We note that Indonesia 
has identified food safety2100 as being the objective of this Measure. The co -complainants do not 
question that food s afety falls under the purview of the protection of human, animal or plant life or 
health under paragraph (b) of Article XX.   
7.737.   What the co -complainants question is the existence of a relationship between Measure  6 
and the protection of human health.2101 We proc eed to examine the evidence regarding the design 
of the measure at issue, including its content, structure, and expected operation  to establish 
whether such a relationship exists .2102 We understand that a measure that does not expressly fulfil 
a public moral objective may still be found to be connected to that objective  following an 
assessment of the design of the measure at issue, including its content, structure, and expected 
operation.2103 In this respect, as described  in Section 2.3.2.6 above , Measure 6 consists of the  
requirements on the importation by PIs and RIs of listed horticultural products that limit the use, 
                                                                                                                                                  
(b) the requirem ent that imports of fresh horticultural products not be harvested more than six 
months from the date of importation, the domestic harvest period limitations, restrictions on 
end-use, the harvest time period, limitations for animal products, the storage cap acity 
requirement, the positive list, and the reference price are justified under Article XX (b) of the 
GATT because these measures are necessary for food safety and food security . 
Indonesia's second written submission, para. 207(b). The Panel observes tha t, although Indonesia has 
indicated a food security objective for Measure  6, the specific argumentation put forward by Indonesia with 
respect to Measure 6 does not appear to include food security concerns.  
2093 Indonesia's first written submission, para. 160.  
2094 Indonesia 's first written submission, para. 160; Indonesia 's first opening statement, para. 34.  
2095 New Zealand's second written submission, para. 260; United States' second written submission, 
paras. 181 and 184.  
2096 New Zealand's second written submission , para. 256 (referring to Indonesia's first written 
submission, para. 160 and Indonesia's first opening statement, para. 34).  
2097 New Zealand 's second written submission, para. 260.  
2098 United States' second written submission, para. 182 (referring to  Appellat e Body Report,  Brazil – 
Retreaded Tyres , paras. 144 -145; EC – Seal Products , para. 5.169, clarifying that, for a defence under 
Article  XX(a), the responding Member had to show: (1) "that it has adopted or enforced a measure 'to protect 
public morals;'" an d, (2) that the measure is "'necessary' to protect such public morals".  
2099 See Appellate  Body Report, Colombia – Textiles , para.  5.67, in the context of Article  XX(a) and 
Argentina – Financial Services , para.  6.203, in the context of Article  XIV(c) of the G ATS, which mirrors 
Article  XX(d) of the GATT  1994.  
2100 Indonesia's first written submission, para. 160.  
2101 New Zealand's second written submission, para. 260.  United States' second written submission, 
para. 182.  
2102 See Appellate  Body Reports, US – Shrimp , para s. 135-142; EC – Seal Products , para.  5.144; 
Colombia – Textiles , para.  5.68. 
2103 Appellate  Body Report, Colombia – Textiles , para.  5.69, in the context of Article  XX(a).  WT/DS477/R • WT/DS478/R  
 
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  sale and distribution of the imported products.2104 Indonesia implements th is Measure by means of 
Articles 7 , 8, 15 and 26(e) -(f) of MOT 16/2013, as amended.2105 Pursuant to these provisions, an 
importer that obtains the recognition as a PI can only import horticultural products as raw 
materials or auxiliary materials for its industrial production processes and is thus pro hibited from 
trading and/or transferring them.  Likewise, an importer that obtains the recognition as an RI  can 
only import horticultural products for consumption provided they are traded or transferred to a 
distributor and not directly to consumers or  retailers. Designation as RI or PI can be revoked 
where the relevant importer is proven to have trad ed and/or transferred imported horticultural 
products.2106 We recall that, in Section  7.2.10.3 above , we concluded that Measure  6 is 
inconsistent with Article  XI:1 of the GATT 1994 because, by virtue of its design, architecture and 
revealing structure, it constitutes a restriction having a limiting effect on importation.  
7.738.   We note that the wording of the above provisions do es not indica te that the objective of 
the restrictions is to protect food safety with respect to  horticultural products.2107 Article 7 of 
MOT 16/2013, as amended, provides: "Businesses that have received Recognition as a PI -
Horticultural Products can only import Horticult ural Products as raw materials or as supplementary 
materials for the needs of its industrial production process and are prohibited from trading and/or 
transferring these Horticultural Products ".2108 Article 15 of MOT 16/2013, as amended, provides: 
"Businesses  that have received Confirmation as an RI -Horticultural Products: a. Only can trade 
and/or transfer imported Horticultural Products to a Distributor; and b. Are forbidden from trading 
and/or transferring imported Horticultural Products directly to consumer s or retailers ".2109  
7.739.   If we examine the text of MOT 16/2013, as amended , we see that its goal appears to be 
the protection of consumers, promotion of business certainty and transparency, and the 
simplification of the licensing process and the administration o f imports.2110 Although the text  does 
mention the protection of consumers, we find no reference indicating that such protection is 
specifically against  food safety risks . We also observe that MOT 16/2013, as amended, mandates 
that "technical enquiries " be car ried out by Surveyors on all horticultural product imports at the 
port of origin.2111 In this respect, Article 22(1) of MOT 16/2013, as amended, provides that the 
Surveyor conducting the technical inquiry must examin e and verify the country of origin, port of  
origin, type  and volume  of product , shipping time, port of destination, phytosanitary certificate for 
fresh horticultural products; certificate of origin, and packaging and labelling requirements . These 
health and phytosanitary certificates are not regula ted through MOT 16/2013 . We thus fail to see  
how any of these legal instruments confirm that Measure  6 was formulated to protect food safety . 
7.740.   Having examined  the design of Measure  6, we fail to see any connection with human, 
animal or plant life or health that could lead us to conclude that Measure  6 is "not incapable "2112 of 
protecting human, animal or plant life or health . Indonesia maintains that  Measure  6 ensures that 
imported horticultural products are moved through channels of distribution that are highl y 
traceable, as opposed to through the ephemeral network of open air markets, and that the 
Measure is  vital to protect the public from the consequences of food -borne health risks.2113 We do 
not think that the design, architecture and revealing structure of th is Measure is intended to 
achieve such a goal. This measure does not protect consumers from unsafe food but rather relates 
to the limitations imposed  by Indonesia on to whom imported horticultural products can be sold  
directly by importers. In this sense, the final destination of the products is not controlled by 
Measure  6. This means that imported products can be, and are, sold through open air markets, 
provided they are first sold to a distributor. In that sense, we concur with the co -complainants2114 
                                                
2104 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand's first 
written submission, paras. 106 -109; United  States'  first written submission, paras. 70 -72. 
2105 Article 15 of MOT 16/2013, as a mended by MOT 47/2013, provides : "Businesses that have received 
Confirmation as a RI -Horticultural Products:  a. Only can  trade and/or transfer imported Horticultural Products 
to a Distributor; and  b. Are forbidden from trading and/or transferring imported Horticultural Products directly 
to consumers or retailers ", Exhibit JE -10. 
2106 Article s 26(e) and 26(f) of MOT 16/2013, as  amended , Exhibit JE -10.  
2107 United States' second written submission, para. 208 (referring to MOA 86/2013, Exhibit JE -15; 
MOT 16/2013, as amended by MOT 47/2013, Exhibit JE -10).   
2108 Exhibit JE -10. 
2109 Exhibit JE -10. 
2110 Consideration  (a) of MOT 16/2013, as ame nded by MOT 47/2013,  Exhibit  JE-10. 
2111 Articles 21 -23 and 25 of MOT 16/2013, as amended by MOT 47/2013,  JE-10.  
2112 Appellate  Body Report, Colombia – Textiles , para.  5.68. 
2113 Indonesia 's first written submission, para. 160; opening statement  at the first subst antive meeting 
of the Panel , para. 34.  
2114 New Zealand 's secon d written submission, para. 260; United States' second written submission, 
para. 183.  WT/DS477/R • WT/DS478/R  
 
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  that Measure  6 actually lengthens the supply chain, likely making traceability  of harmful bacteria 
and foodborne pathogens more difficult. In addition, such a justification  would not  be valid  in the 
case of PIs since the imported products that have not been used  in the production process cannot 
be transferred or sold  to retailers and consumers .   
7.741.   We note that, when arguing that MOT 71/2015 - a measure not at issue in this dispute  - 
and MOA 86/2013 as a whole were enacted to protect food safety for human consumpti on with 
respect to horticultural products2115, Indonesia provides an example to justify that this is the goal 
of its end -use requirements. However, Indonesia's example relates to preventing frozen meats 
from being sold in traditional markets because of the da ngers that arise from freezing, thawing 
and refreezing meats .2116  
7.742.   We therefore conclude that Indonesia has not demonstrated that there is a relationship 
between Measure  6 and the protection of human, animal or pl ant life or health . Accordingly, we 
find that Indonesia has not demonstrated that Measure  6 is provisionally justified under 
subparagraph  (b) of Article XX of the GATT  1994.  
7.3.13.2.4   Conclusion  
7.743.   In the light of the foregoing, we find that Indonesia has failed to demonstrate that 
Measure  6 is justified under Ar ticle XX(b) of the GATT  1994.   
7.3.14   Whether Measure  6 (Use, sale and distribution requirements for horticultural 
products ) is justified under Article  XX(d) of the GATT  1994  
7.3.14.1   Arguments of the Parties  
7.3.14.1.1   Whether Measure 6 is provisionally justified under subparagraph  (d) of 
Article  XX of the GATT  1994  
7.3.14.1.1.1   Indonesia  
7.744.   Indonesia argues that its end use limitations are necessary to protect human, animal or 
plant life or health, and to secure compliance with Indonesia's food safety requirements in 
accordance with Article XX sub paragraphs (b) and (d). Indonesia argues that, by limiting the 
distribution channels available to certain imports, Indonesian officials with limited resources are 
better able to track the origin of products that contain pathogenic bacteria and therefore re duce 
the spread of such bacteria into the food supply of the general public. In its view, these measures 
ensure that imported horticultural products are moved through channels of distribution that are 
highly traceable, as opposed to through the ephemeral n etwork of open air markets, and are vital 
to protect the public from the consequences of food -borne pathogens .2117 
7.3.14.1.1.2   New Zealand  
7.745.   New Zealand submits  that Indonesia conflates its defence s under Article XX(b) and 
Article  XX(d), arguing that its measure "is necess ary to protect human, animal or plant  life or 
health, and to secure compliance with Indonesia's food safety requirements in accordance with 
Article XX subparagraphs (b) and (d) ".2118 According to New Zealand, Indonesia has not 
demonstrated that the restrictio ns on use, sale and distribution have the objective of ensuring 
compliance with food safety requirements. Indonesia has not specifically identified either the laws 
and regulations with which this measure is designed to ensure compliance, or the relevant 
provisions within those laws and regulations. New Zealand contends that Indonesia's argument is 
                                                
2115 Indonesia 's second written submission, para. 110.  
2116 Indonesia 's second written submission , para.  110 ( referring to Corina Gambuteanu, Daniela Borda 
and Petru Alexe, The Effect of Freezing and Thawing on Technological Properties of Meat: Review, p. 89 
available at http://www.journal -of-agroalimentary.ro/admin/articole/48037L15_Vol_19_1_2013_88 -92.pdf , 
Exhibit IDN -57).  
2117 Indonesia 's second written submission, para. 245.  
2118 New Zealand 's second written submission, para. 256  (referring to Indonesia 's first wri tten 
submission, para. 160;  opening statement  at the first meeting of the Panel , para. 34 ). WT/DS477/R • WT/DS478/R  
 
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  based on a mere assertion of a long list of food safety laws and regulations, without any 
explanation2119, and thus the Panel should  not be bound by Indonesia's vagu e assertions.2120 
7.746.   Responding to the argument that "the measure distinguishes the use, sale and transfer of 
imports from Producer Importers and Registered Importers " and "that this information is 
specifically used to calculate the national supply and demand fo r specific horticultural goods "2121, 
New Zealand contends that it is unclear how this justification relates to either customs 
enforcement, or to the challenged measure, and that Indonesia has not explained which laws or 
regulations the measure is "necessary t o secure compliance with " let alone why it is 
"necessary ".2122 In New Zealand's view, e ven if the first element of Article XX(d) were met, 
Indonesia does not explain how imposing an additional distribution layer for imported fresh 
horticultural products would  contribute to ensuring compliance with food safety laws, thus 
demonstrating that the measure is "necessary ". New Zealand submits that an extra distribution 
layer would rather seem to add to the difficulty of tracing the origin of product s.2123 In this light,  
New Zealand considers that Indonesia has f ailed to establish that its end -use restrictions for 
horticultural products are "necessary " to secure compliance with any WTO -consistent laws and 
regulations. New Zealand argues that, w eighed against its significa nt trade -restrictiveness, the 
measure is not "necessary " and that it is therefore not required to elaborate on an alternative 
measure.2124 However, New Zealand suggested that a less trade -restrictive alternative measure 
might involve public education programs  on the importance of safe food handling.2125 
7.3.14.1.1.3   United States  
7.747.   The United States contends that , since no  WTO-consistent law or regulation is identified 
with which the measure is supposedly necessary to secure compliance, and since no evidence is 
presented showin g that  the challenged measure is designed to secure compliance with such a law 
or regulation , Indonesia’s Article XX(d) defence  must fail. Furthermore, according to the United 
States, the measure would not meet the "necessary " legal standard.2126 The United S tates argues 
that Indonesia has not explained how requiring horticultural products imported for consumption to 
be sold only through a distributor would allow importers to better track bacteria in the food supply. 
In the United States' view, the challenged measure does not limit the retail outlets where imported 
horticultural products can be sold ultimately.2127 Rather, the measure includes an additional 
intermediary in the supply chain for imported horticultural products sold for consumption, thereby 
artificia lly extending it and imposing additional, unnecessary costs on importation.2128 According to 
the United States, lengthening the supply chain will likely make tracking products more 
difficult .2129 
7.748.   Further, to the extent that Indonesia is advancing a defence  of the whole challenged 
measure, the United States considers that Indonesia  has not explained why PIs are prohibited 
from transferring or selling products not used in their own production process. Therefore, even if 
Indonesia could sustain a defence  of the requ irement that importers sell directly to distributors 
only – which it cannot – according to the United States, Indonesia would still not have established 
a defence  of the measure as challenged by the co-complainants.2130 According to the 
United  States, Indones ia’s argument also ignores the fact that Indonesia has health and SPS 
requirements that apply to covered horticultural products. Specifically,  it argues,  importers of fresh 
horticultural products must obtain a health certificate and a phytosanitary certifi cate prior to 
importation.2131 The United States argues that, because the use, sale, and transfer requirements 
make no demonstrated contribution to tracking bacteria in the food supply, a less trade -restrictive 
alternative measure that preserves Indonesia’s c hosen level of protection with respect to bacteria 
                                                
2119 New Zealand 's second  written submission, para. 257 ( referring to Indonesia 's responses to Panel 
question  No. 20. 
2120 Appellate Body Report, EC – Seal Products , para. 5. 144. 
2121 Indonesia 's second written submission, para. 245.  
2122 New Zealand 's opening statement at the second substantive meeting, para. 73.  
2123 New Zealand 's second written submission, para. 258.  
2124 New Zealand 's second written submission, paras. 259 -261. 
2125 New Z ealand 's second written submission, paras. 2 61. 
2126 United States ' second written submission, paras. 157 -158 (referring to Indonesia 's response to 
Panel question No.  71). 
2127 United States ' first Written submission, para. 193.  
2128 United States ' first written su bmission, paras. 194 -195. 
2129 United States ' second written submission, para. 159.  
2130 United States ' second written submission, para. 160.  
2131 United States ' second written submission, para. 161  (referring to Article 22(1) MOT 16/2013, as 
amended by MOT 47/2013 , Exhibit JE -10). WT/DS477/R • WT/DS478/R  
 
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  in the food supply would be to eliminate the requirement and continue to rely instead on these 
other requirements, which relate specifically to Indonesia’s stated objective, i.e. food safety . 
7.3.14.1.2   Whether Measu re 6 is applied in a manner consistent with the chapeau  of 
Article XX  
7.749.   Concerning the parties' arguments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
7.3.14.2   Analysis by the Panel  
7.750.   We have found in Se ction 7.3.5.2.3 above  that Indonesia has failed to identify specific 
rules, obligations, or requirements contained in WTO -consistent laws or regulations for the 
purpose of its defence under Article  XX(d) of the GATT  1994. Gi ven that Indonesia's arguments 
concerning the identification of WTO -consistent laws or regulations for the purpose of its defence 
under Article  XX(d) of the GATT  1994 were submitted with respect to all the relevant measures at 
issue, including Measure  6, we find that Indonesia has not demonstrated that Measure  6 is 
provisionally justified under subparagraph  (d) of Article  XX of the GATT  1994.  
7.751.   We therefore find that Indonesia has failed to demonstrate that Measure  6 is justified 
under Article  XX(d) of the G ATT 1994.  
7.3.15   Whether Measure  7 (Reference p rices for chillies and shallots for consumption) 
is justified under Article  XX(b) of the GATT  1994  
7.3.15.1   Arguments of the Parties  
7.3.15.1.1   Whether Measure 7 is provisionally justified under subparagraph  (b) of 
Article  XX of the GAT T 1994  
7.3.15.1.1.1   Indonesia  
7.752.   Indonesia submits that the reference price system is  justified under Article XX(b) of the 
GATT  1994 because it is necessary for food safety and food security .2132 For Indonesia, the 
reference price system is an integral part of its food safet y and security plan, and is necessary to 
protect human, plant, or animal life or health2133, particularly against the harmful oversupply of 
perishable food items in equatorial heat and the consequences of extreme price volatility on the 
domestic availability of a continuous supply of chillies  and shallots.2134 Indonesia's Food Security 
Council determines the national food safety and security goals and objectives, which are then 
implemented through a multi -agency taskforce that includes the Ministry of Agriculture 's Agency 
for Food Security and the Ministry of Trade.2135 In Indonesia's view, the reference price system is a 
limited tool used to avert immediate threats to the Indonesian  food supply.2136 
7.753.   According to Indonesia,  this measure reflects the importance of  chillies and fresh shallots 
to the Indonesian food supply given their ubiquity in local cuisine. Indonesia adduces that many 
Indonesians in poorer rural communities tend to store these products for far too long. The 
resulting spoilage and nutritional depletion i s considered a public health issue by Indonesia . Food 
insecurity and under -nutrition are persistent threats in poorer communities, as demonstrated by 
the alarmingly high rate of stunting, or chronic malnutrition that results in under -development.2137 
Further,  Indonesia holds that the risk of consuming decayed chilli and shallots intensifies with 
oversupply, creating a health risk for human consumption.2138 Indonesia also observes that 
reference prices are established by taking into account certain elements, inclu ding supply and 
                                                
2132 Indonesia 's second written submission, para. 207(b) . 
2133 Indonesia 's first written submission, para. 154; second written submission, para. 238.  
2134 Indonesia 's second written submission, para. 197.  
2135 Indonesia 's response to Panel question N o. 18. 
2136 Indonesia 's response to Panel question No.  18. 
2137 Indonesia 's response to Panel question No.  18 (referring to Exhibit IDN -26, showing that in 2007, an 
estimated 7.7 million children under 5 years of age (36.8 %) were stunted ). 
2138 Indonesia 's second w ritten submission, para. 110  (referring to Exhibits IDN -59 and  IDN-60); oral 
statement at the second substantive meeting, para. 33.  WT/DS477/R • WT/DS478/R  
 
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  demand in the local market. Accordingly, Indonesia considers that market prices falling below 
reference prices are an indicator of oversupply.2139   
7.3.15.1.1.2   New Zealand  
7.754.   New Zealand submits that Indonesia's argument does n ot meet the standard of 
Article XX(b).2140 In its view, Indonesia has not demonstrated that the protection of human health 
is the objective of its reference price for chilli and shallots and has not provided the details of its 
"food safety and security plan ". New Zealand considered that I ndonesia conflates the concepts of 
"food safety " and "food security " and questioned whether the latter objective, as used by 
Indonesia, would fall under the Article XX(b) exception.2141 In its view, Indonesia seems to be 
equating "food security " to protecting  local producers rather than ensuring people have safe 
food.2142 It further contended that Indonesia has not explained how the measures at issue 
contribute to the objectives of food security, even if it were relevant.2143 New Zealand submitted 
that, to the contr ary, the import -limiting measures appear to have had the effect of exacerbating 
food shortages, driving up prices and causing consequent flow -on effects on nutrition.2144  
7.755.   New Zealand argues that , since the government d ecree stipulating the reference price fo r 
chilli and shallots states that the reference price "is used as instrument [sic] for consumption, 
taking into account harvest season and availability of domestic supply "2145, contrary to Indonesia's 
claim, the evidence shows that the purpose of the measure is in fact "to protect domestic 
horticultural farmers ".2146 New Zealand further contends that Indonesia relies on a general article 
for consumers on spoilage of fruit and vegetables that does not specifically demonstrate the 
existence of any "risk of consumin g decayed chilli or shallots ", and hence fails to demonstrate that 
the reference price measure for chilli and shallots is intended to protect food safety. 2147 
7.756.   New Zealand submits that, even if the first element of Article XX(b) were satisfied, 
Indonesia has not explained how the measure contributes to the protection of human health. In 
particular, New Zealand points out that Indonesia has supplied no credible evidence of occurrences 
of "harmful oversupply " (whether chillies  and shallots, or beef), nor of any prospect of "immediate 
crisis" or "immediate threats to the Indonesia food supply "2148, in order to demonstrate that its 
reference price requirements contribute to the protection of human, animal or plant life or health 
under Article XX(b). Further, New Zeala nd maintains that Indonesia has not described how this 
measure, which operates to prevent the importation of chilli and shallots when the market price for 
such products falls below the reference price, could in any way improve the situation of "food 
insecu rity", "under -nutrition in Indonesia's poorer communities ", "stunting " or "chronic 
malnutrition that results in underdevelopment ".2149 In New Zealand's view, there is no genuine 
relationship of ends and means between the objective pursued and the measure at i ssue and no 
evidence of a contribution of that measure to the objective.2150 In its view, the design and 
structure of this measure do not indicate that it is necessary to protect Indonesian citizens from 
public health threats.2151 New Zealand further contends th at, to the contrary, the information 
supplied by Indonesia points to chronic undersupply of food, persistent threats of food insecurity 
                                                
2139 Indonesia 's second written submission, paras. 239 -240. 
2140 New Zealand 's second written submission, para. 270.  
2141 New Zealand 's opening statement at the second substantive meeting, para. 37 (New Zealand refers 
to, for example, Indonesia's second written submission, paras. 123, 207(b), section III.D.2).  
2142 New Zealand's opening statement at the second substantive meeting, para. 37 , with reference to 
Exhibit IDN -64. New Zealand underlines that, while acknowledging the political appeal of trade barriers to 
promote domestic production, the paper notes that these policies tend to fail on three counts: they lead to 
higher domestic price s which increases poverty, they stifle economic growth and, "ironically, they fail to 
recognize the crucial role of international trade … in Indonesia's own food security", p.7.  
2143 New Zealand's opening statement at the second substantive meeting, para. 38.  
2144 New Zealand's opening statement at the second substantive meeting, para. 38 (referring to Exhibits 
NZL-25, NZL -41, NZL -64, NZL -66; Exhibits USA -100, USA -101 and USA -103; Exhibit IDN -5, at p.  27, referring 
to domestic production of beef not meeting deman d). 
2145 Third stipulation of Reference Price Government Decree (Exhibit NZL -58). 
2146 New Zealand 's second written submission, para. 271  (referring to Exhibit NZL -59, para. 3 ). 
2147 New Zealand 's response to Panel question No.  123 (referring to Exhibit IDN -59). 
2148 New Zealand 's opening statement at the second substantive meeting, para. 81 (referring to 
Indonesia 's response  to Panel questiond No. 17, 18 and 27; and Indonesia 's "food security plan ", Exhibit IDN -
25). 
2149 Indonesia 's response to the Panel Question no. 18,  paras. 19 -20. 
2150 New Zealand 's second written submission, para. 272.  
2151 New Zealand 's opening statement at the second substantive meeting, paras. 79 -80 (referring to 
Indonesia 's second written submission, para. 240 ). WT/DS477/R • WT/DS478/R  
 
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  and chronic malnutrition in poorer communities.2152 From New Zealand's perspective, Indonesia 
needs additional safe, high -quality protein, as explained by the strong growth in New Zealand beef 
and beef offal exports to Indonesia in the first decade of this millennium before the measures at 
issue were introduced.2153 
7.757.   Accordingly, New Zealand holds that Indonesia has failed to esta blish that the reference 
price for chilli and shallots is "necessary " for the purposes of protecting human health. The 
measure is trade -restrictive, preventing the importation of chilli and shallots.2154 Such trade -
restrictiveness, in New Zealand's view, outw eighs any contribution the measure might make to the 
protection of human health. Although New Zealand does not consider that it is necessary to 
elaborate on a less trade -restrictive alternative measure, New Zealand suggests that undertaking 
a public educat ion programme on the safe storage of food might address the immediate concern 
identified by Indonesia. Also, allowing market forces to operate would be a more effective (and 
less trade -restrictive) way to ensure Indonesia has a continuous supply of fresh chilli and 
shallots.2155 
7.3.15.1.1.3   United States  
7.758.   The United States argues that Indonesia's defence under Article XX(b) of the GATT 1994 
must fail on several grounds. First, Indonesia has not shown that the objective of its reference 
price requirements is to protect huma n health. The United States agreed with New Zealand that 
Indonesia conflates the food security and food safety concepts.2156 As the party invoking Article 
XX(b), Indonesia bears the burden of explain ing its objective of "food security " and demonstrat ing 
the c onnection between "food security " and the protection of human, animal or plant life or 
health.2157 For the United States, Indonesia has given no explanation on the relationship between 
"food security and the protection of human health ".2158 In its view, just as Indonesia has failed to 
demonst rate that any of its measures are  necessary to the achievement of a food safety objective, 
it has not provided any evidence demonstrating that any of the c hallenged measures are  
necessary to the achievement of a food security  objective.   
7.759.   The United States argue s that Indonesia has not referred to anything in the text, structure, 
or legislative history of the reference price requirements (respectively for chillies  and fresh shallots 
for consumption, and for cattle and bovine pr oducts) suggesting that the "objective pursued by " 
the reference price requirements is the protection of human health. The United States considers 
that Indonesia’s argument rests entirely on its assertion that this is the case. The United States 
observes t hat Indonesia's own description of its food security plan2159 makes no mention of the 
reference price requirements, oversupply problems, or Indonesia’s import licensing regimes more 
generally.2160 The United States further argues that, even if protection of huma n health were the 
objective of the challenged measure, Indonesia has not presented any evidence that the reference 
price requirements make any contribution to the protection of human health. Also, despite 
Indonesia's assertion that oversupply of horticultu ral product food items is a health threat, there is 
no evidence that an oversupply problem exists. In its view, Indonesia presents evidence 
acknowledging that food scarcity and under -nutrition are prevalent in Indonesia.2161 In fact, supply 
shortages of chilli and shallots are both prevalent and harmful.2162  
                                                
2152 Indonesia 's responses to Panel questio n No.  18; Exhibit IDN -78; Exhibit IDN -51; Exhibit IDN -4. 
2153 New Zealand 's opening statement at the second substantive meeting, para. 8 1 (referring to Exhibit 
NZL-12). 
2154 New Zealand 's second written submission, para. 273  (referring to its first written submi ssion, 
paras.  259-262). 
2155 New Zealand 's second written submission, para. 274.  
2156 United States' response to Panel question No. 122 (referring to New Zealand's oral statement at the 
first substantive meeting, para. 37).  
2157 United States' resp onse to Panel que stion No. 122 ( referring to  Appellate Body Report,  Brazil – 
Retreaded Tyres , paras. 144 –145; see also EC – Seal Products , para. 5.169 ). 
2158 Indonesia's second written submission, paras. 123 and 207.  
2159 United States ' second written submission, para. 191; Indo nesia's response to Advanced Panel 
questions No . 18 and 27.  
2160 United States ' second written submission, para. 191  (referring to Exhibit IDN -25). 
2161 United States ' second written submission, para. 192  (referring to Indonesia 's first written 
submission, paras . 18-19; and Exhibits US -99 and US -72). 
2162 Exhibits US -100 to US -103. WT/DS477/R • WT/DS478/R  
 
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  7.760.   On the health risks from consuming decayed chilli and shallots, and the two both blog 
posts cited by Indonesia in support of this assertion2163, the United States contends that neither 
exhibit mentions Indonesi a at all, let alone suggests a connection between its import licensing 
regime or any of the individual challenged measures and food safety.2164 The United States argues 
that, even if the requirement made a contribution to the protection of human health, it wo uld have 
to be "necessary " in light of the significant trade -restrictiveness of the measure, in order to satisfy 
Article XX(b). The United States alleges that Indonesia attempts to downplay the trade -
restrictiveness of the reference price system s by noting  that the prohibition "is not con tinuously in 
effect ".2165 The United States observes that the reference price requirement conditions all 
importation of the covered products on the Indonesian market prices of chillies , shallots, and 
secondary cuts of beef rem aining above their respective reference prices, imposing a complete ban 
on these products if domestic market prices fall below this level.2166 Additionally, the United States 
argues that the reference price has a limiting effect on importation at all times be cause the threat 
of such a broad ban reduces incentives for importation.2167 In the United States' view, a measure 
would have to make a significant contribution to the objective of human health in order to justify 
such a level of trade -restrictiveness.  
7.3.15.1.2   Whethe r Measure  7 is applied in a manner consistent with the chapeau  of 
Article XX  
7.761.   Concerning the parties' arguments about the chapeau  of Article XX of the GATT  1994, see 
Section  7.3.5.1.2 above . 
7.3.15.2   Analysis by the Panel  
7.3.15.2.1   Introduction  
7.762.   The task before the Panel is to determine whether Measur e 7 (Reference p rices for chillies 
and shallots) is justified under Article XX(b) of the GATT  1994. We commence with the text of the 
relevant provision and the ensuing legal standard.  
7.3.15.2.2   The relevant le gal provision  
7.763.   Article XX of the GATT 1994 reads, in relevant part, as follows:  
Article XX  
General Exceptions  
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discriminati on between countries 
where the same conditions prevail, or a disguised restriction on international trade, 
nothing in this Agreement shall be construed to prevent the adoption or enforcement 
by any Member of measures:  
 (a) ... 
 (b) necessary to protect hum an, animal or plant life or health;  
… 
                                                
2163 Indonesia 's second written submission, para. 110  (referring to Exhibits IDN -59 (explaining to 
consumers the causes behind vegetable spoilage and encouraging them to select produce caref ully, store it 
properly, and purchase frozen items as alternatives to fresh ones) and IDN -60 (encouraging consumers to eat 
more vegetables and to store them correctly, wash them in uncontaminated water, and avoid pre -packaged 
salads if they were stored in unsanitary conditions) ). 
2164 United States ' response to Panel question No.  123. 
2165 Indonesia 's Response to Advanced Panel question N o. 18; Indonesia 's Response to Advanced Panel 
question N o. 27. 
2166 United States ' second written submission, para. 193 (referring  to its first written submission paras.  
199-200, 310 -313). 
2167 United States ' first written submission, paras. 314 -315. WT/DS477/R • WT/DS478/R  
 
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  7.764.   Concerning the legal standard under this provision, we refer to Section  7.3.8.2.2 above . 
The task before the Panel is therefore to determin e whether Measure  7 (Reference p rice for chilli es 
and shallots) is justified under Article XX(b) of the GATT  1994. We commence by examining 
whether Indonesia has demonstrated that Measure  7 is provisionally justified under 
subparagraph  (b) of Article XX of the GATT  1994.  
7.3.15.2.3   Whether Indonesia has demonstra ted that Measure  7 is provisionally 
justified under Article  XX(b) of the GATT  1994  
7.765.   Under this tier of our analysis, the task before the Panel is to establish whether, as claimed 
by Indonesia, Measure  7 is provisionally justified by subparagraph  (b). As exp lained before, we 
shall examine whether Indonesia has demonstrated that Measure  7 is designed to protect human, 
animal or plant life or health  and, if so, whether it is necessary for such protection.  
7.766.   Concerning the first element, i.e. whether Measure  7 is designed to protect human, animal 
or plant life or health, we note that Indonesia has argued that the reference price system is an 
integral part of Indonesia's food safety and security plan, and is necessary to protect human, 
plant, or animal life or heal th2168, particularly against the harmful oversupply of perishable food 
items in equatorial heat and the consequences of extreme price volatility on the domestic 
availability of a continuous supply of chillies  and shallots.2169 Indonesia held that the risk of 
consuming decayed chilli and shallots intensifies with oversupply, creating a health risk for human 
consumption.2170 Furthermore,  the resulting spoilage and nutritional depletion is considered a  
public health issue  by Indonesia .2171  
7.767.   The co -complainants responded t hat Indonesia's argument does not meet the standard of 
Article XX(b) because Indonesia has not demonstrated that the protection of human health is the 
objective of its reference price for chilli and shallots.2172  
7.768.   We recall that this first step  in the analysi s calls for an initial, threshold examination in 
order to determine whether there is a relationship between an otherwise WTO-inconsistent  
measure and the protection of human, animal or plant life or health .2173 We note that Indonesia 
has identified food safet y and food security2174 as the objectives being addressed by this Measure. 
The co -complainants do not question that food safety falls under the purview of the protection of 
human, animal or plant life or health under subparagraph  (b) of Article  XX. They have however 
contested that "food security " is covered under subparagraph  (b). 
7.769.   New Zealand has thus argued that Indonesia is conflating the concepts of "food safety " 
and "food security " and questioned whether the latter objective, as used by Indonesia, would fa ll 
under the Article XX(b) exception.2175 In its view, Indonesia seems to be equating "food security " 
                                                
2168 Indonesia's first written submission, para. 154; second written submission, para. 238.  
2169 Indonesia's Executive Summary, para. 18; second  written submission, para. 197.  
2170 Indonesia's second written submission, para. 110 (referring to Exhibits IDN -59 and  IDN-60); and oral 
statement at the second substantive meeting, para. 33.  
2171 Indonesia's responses to Panel question No. 18 (referring to Exhibit IDN –26). 
2172 New Zealand's second written submission, para. 270; United States' second written submission, 
para. 191.  
2173 See Appellate  Body Report, Colombia – Textiles , para.  5.67, in the context of Article  XX(a) and 
Argentina – Financial Services , para.  6.203, in the context of Article  XIV(c) of the GATS, which mirrors 
Article  XX(d) of the GATT  1994.  
2174 In its second written submission, Indonesia maintained that a number of measures, including 
Measure  7, were necessary for, inter alia , food security. Indo nesia indicated as follows:  
… 
(b) the requirement that imports of fresh horticultural products not be harvested more than six 
months from the date of importation, the domestic harvest period limitations, restrictions on 
end-use, the harvest time period, li mitations for animal products, the storage capacity 
requirement, the positive list, and the reference price are justified under Article XX (b) of the 
GATT because these measures are necessary for food safety and food security . 
Indonesia 's second written su bmission, para. 207(b).  
The Panel observes that, although Indonesia has indicated a food security objective for measures other 
than Measure  7, this is the first instance that the Panel finds specific argumentation from Indonesia defending 
a measure as hav ing a food security objective. We have therefore decided to examine this issue within our 
analysis of Indonesia 's defence of Measure  7 under Article  XX(b).   
2175 New Zealand 's opening statement at the second substantive meeting, para. 37; New Zealand refers 
to, for example, Indonesia 's second  written submission, paras. 123, 207(b), section III.D.2.  WT/DS477/R • WT/DS478/R  
 
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  to protecting local producers rather than ensuring people have safe food.2176 The United  States 
agreed with New Zealand2177 and submitted that, as the party invoki ng Article XX(b), Indonesia 
bears the burden to explain its objective of "food security " and demonstrate the connection 
between "food security " and the protection of human, animal or plant life or health.2178 For the 
United States, Indonesia has given no expl anation on the relationship between "food security and 
the protection of human health ".2179  
7.770.   Indonesia however maintained that the concepts of food safety and food security are 
inextricably linked.2180 According to Indonesia, f ood insecurity and under -nutrition are persistent 
threats in poorer communities, as demonstrated by the alarmingly high rate of stunting, or chronic 
malnutrition that results in under -development.2181 For Indonesia, securing food supply presumes 
access to not only enough food to meet caloric i ntake needs, but also food that is safe for human 
consumption. Indonesia considered that the co -complainants' arguments seek to detract from 
Indonesia's legitimate objectives of protecting, simultaneously, the safety and security of its food 
supply through  a suite of measures, including measures relating to imported food products, 
consistent with Indonesia's obligations to both its trading partners and its citizens.2182 
7.771.   We observe that Indonesia has not provided us with any persuasive argumentation on 
whether its food securit y concerns would fall within subparagraph (b). Nonetheless, as we explain 
below, if we were to examine whether there is a relationship between Indonesia's food security 
policy objective , as defined above,  and Measure  7, our conclusion would  be that there is none .   
7.772.   We thus proceed to examine the evidence regarding the design of the measure at issue, 
including its content, structure, and expected operation  to establish whether a relationship exists 
between Measure  7 and the policy objectives put forward by Indonesia .2183 We understand that a 
measure that does not expressly refer to a human, animal or plant life or health objective may still 
be found to have such a relationship with human, animal or plant life or health following an 
assessment of the design of the measure at issue, including its content, structure, and expected 
operation.2184 In this respect, as described in Section 2.3.2.7 above , Measure 7 consists of the 
implementation  of a reference price  system  by the Ministry of Trade on imports of chilli and fresh 
shallots  for consumption.2185 Indonesia implements this Measure by means of Article 5(4) of 
MOA 86/2013  and by Article 14B of MOT 16/2013 , as amended by MOT 47/2013.  Pursuant to 
these provisions, importation  is suspended  when the domestic market price falls below the pre -
established reference price . Whenever  the reference price system is activated, imports are 
temporarily suspended , independently of whether an im porter holds an RIPH and/or an I mport 
Approval . Already authorized import volumes do not "carry over " to the next validity period.2186 
Imports are resumed when  the market price again reaches the reference price. We recall that, in 
Section  7.2.11.3 above , we concluded that M easure 7 is inconsistent with Article  XI:1 of the GATT 
1994 because, by virtue of its design, architecture and revealing structure, it constitutes a 
restriction having a limiting effect on importation.  
7.773.   We observe that nothing in the text of the regulations  implementing this measure and, in 
particular, Article 5(4) of MOA 86/2013 and by Article 14B of MOT 16/2013, as amended, refers to 
food safety or food security as policy objective s. We note that in its initial section, MOT 16/2013, 
                                                
2176 New Zealand's opening statement at the second  substantive meeting, para. 37 (referrint  to Exhibit 
IDN-64). New Zealand underlines that, while acknowledging the po litical appeal of trade barriers to promote 
domestic production, the paper notes that these policies tend to fail on three counts: they lead to higher 
domestic prices which increases poverty, they stifle economic growth and, "ironically, they fail to recog nize the 
crucial role of international trade … in Indonesia's own food security", p.7.  
2177 United States' res ponse to Panel question No. 122 (referring to  paragraph 37 of New Zealand's oral 
statement at the first substantive meeting ). 
2178 United States' respon se to Panel question No. 122 (referring to Appellate Body Report, Brazil – 
Retreaded Tyres , paras. 144 –145; Appellate Body Report , EC – Seal Products , para. 5.169).  
2179 United States' second written submission, paras. 123 and 207.  
2180 Indonesia's response to Panel question No. 121.  
2181 Indonesia 's response to Panel question No.  18 (referring to Exhibit IDN -26, showing that in 2007, an 
estimated 7.7 million children under 5 years of age (36.8 %) were stunted ). 
2182 Indonesia's respo nses to Panel question No. 121 ( referring to New Zealand's oral statement, 
para. 37). 
2183 See Appellate  Body Reports, US – Shrimp , paras. 135-142; EC – Seal Products , para.  5.144; 
Colombia – Textiles , para.  5.68. 
2184 Appellate  Body Report, Colombia – Textiles , para.  5.69, in the context of Arti cle XX(a).  
2185 New Zealand's Panel Request , pp. 1 -4; United States' Panel Request , pp. 1 -4; New Zealand' s first 
written submission, para. 109; United  States'  first written submission, paras. 75 -76. 
2186 See Indonesia 's response to Panel question No.  13.  WT/DS477/R • WT/DS478/R  
 
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  as amended, mentions th e "protect[ion of] consumers, promot[ion] [of] business certainty and 
transparency, and [the] simplif[ication] [of] the licensing process and the administration of 
imports "2187 as the basis of this regulation. Although it could be argued that the protection o f 
consumers  may fall under the scope of the protection of human, animal or plant life or health , an 
argument that we note Indonesia has not put forward2188, we see no other basis allowing us to 
conclude that Measure 7 was designed to protect food safety or fo od security.  
7.774.   We observe that the text of these regulations rather points to objectives that are not 
related to those policies . For instance, MOA  86/2013 refers generally to the simplification of the 
"import process of horticulture products " and to "providi ng certainty in the servicing of Import 
Recommendation of Horticulture Products " as its rationale.2189 What is more, Article 2 of 
MOA 86/2013 expressly confirms the underlying rationale by stating that "[t]his Regulation is 
intended to be the legal basis for issuing RIPH as a requirement for the issuance of import 
approval " and, similarly, Article 3 of MOA 86/2013 provides that "this Regulation is intended to … 
increase the effectiveness and efficiency of horticulture product import management; and … 
provide c ertainty in RIPH issuing service ".2190 In its initial part, MOA  86/2013 also refers to several 
domestic regulations and laws concerning a wide array of subjects, including quarantine measures 
for the importation of fresh fruits and vegetables, the Horticultur e Law and the Food law, and even 
the law regarding the ratification of the WTO Agreement. We fail to see, however, how any of 
these legal instruments constitutes  relevant evidence that the reference price system for chillies 
and shallots  was instituted  to protect food safety in the sense of addressing Indonesia's alleged 
concerns on the harmful oversupply of perishable food items in equatorial heat and the 
consequences of extreme price volatility on the domestic availability of a continuous supply of 
chillies and shallots .2191 The same applies to food security in the sense of securing access to 
enough safe and nutritious food .2192 
7.775.   Having examined the design of Measure  7, we fail to see any connection with food safety 
or food security that could lead us to conclude  that Measure  7 is "not incapable "2193 of protecting 
human, animal or plant life or health.  We concur with the co -complainants that Indonesia has not 
referred to anything in the text, structure, or legislative history of the Measure  7 suggesting that 
the obje ctive pursued by this Measure is the protection of food safety or food security . We note 
that, in paragraph 154  of its first written submission, Indonesia mentions that the reference price 
system for chillies and shallots "is an integral part of Indonesia' s food safety and  security plan. " 
We have examined the evidence provided by Indonesia by means of Exhibit IDN -25. This is a 
brochure entitled "Agency for Food Security, at a glance ". We have examined this brochure and we 
have not located any mention of Mea sure 7; the sole allusion to reference prices relates to a 
domestic corn reference price applied in Indonesia in order to support the local community food 
distribution institution. We understand that this allusion has no relation to the reference prices fo r 
chillies and shallot at issue in this dispute, which are applied as a border measure to control 
imports.  
7.776.   We therefore conclude that  Indonesia has not demonstrated that there is a relationship 
between Measure  7 and the protection of human, animal or plan t life or health . Accordingly, we 
find that Indonesia has not demonstrated that Measure  7 is provisionally justified under 
subparagraph  (b) of Article XX of the GATT  1994.   
7.3.15.2.4   Conclusion  
7.777.   In the light of the foregoing, we find that Indonesia has failed to dem onstrate that 
Measure  7 is justified under Article  XX(b) of the GATT  1994.  
                                                
2187 Exhibit JE -15. 
2188 Indonesia speaks of harmful oversupply of perishable food items in equatorial heat and the 
consequences of extreme price volatility on the domestic availability of a continuous supply of chillies  and 
shallots. Indonesia 's second written submis sion, para. 197.  
2189 Exhibit JE -15. 
2190 Article 2 and 3, Exhibit JE -15. 
2191 Indonesia's second written submission, para. 197.  
2192 Indonesia's responses to Panel question No.  121 ( referring to New Zealand's oral statement, 
para. 37). 
2193 Appellate  Body Report, Colomb ia – Textiles , para.  5.68. WT/DS477/R • WT/DS478/R  
 
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  7.3.16   Whether Measure  8 (Six -month harvest requirement) is justified under 
Article  XX(b) of the GATT  1994  
7.3.16.1   Arguments  of the Parties  
7.3.16.1.1   Whether Measure 8 is provisionally justified under subpa ragraph (b) of 
Article XX of the GATT 1994.  
7.3.16.1.1.1   Indonesia  
7.778.   Indonesia explains that  in addition to requiring importers to obtain adequate storage 
capacity to stock the import quantities anticipated for each validity period, Measure  8 is necessary 
to ensure food safety2194, namely to ensure that consumers have access to fresh, nutritious, 
chemical - and preservative -free horticultural products.2195 According to Indonesia, the requirement 
has no bearing on whether horticultural products can be stored for longer than six m onths .2196 
Indonesia explains that, i n order to facilitate inspection procedures, health authorities prefer that 
horticultural products are stored domestically , instead of at the origin country , within six months of 
harvest time. Accordingly, Indonesia argues  that allowing imports at a later date would render the 
verification of compliance with proper storage procedures impossible, particularly given the 
prevailing equatorial climate.2197 Indonesia explains that , as it requires importers to obtain 
adequate storag e capacity to house anticipated imports as a consequence of Measure 5, storage 
capacity is already available in Indonesia for importers who wish to store horticultural products for 
longer than six months.2198 For Indonesia, it is not difficult to understand w hy its health authorities 
would prefer such produce to be stored locally as opposed to entering the market at a much later 
date when it is impossible to verify that proper storage procedures have been followed. Indonesia 
sustains that in its equatorial cli mate, proper food storage is of utmost importance.2199 
7.779.   Indonesia contends that not all fresh fruits can be stored for longer than six months 
without any degradation in quality and nutritional value.2200 Indonesia argues that the application 
of hazardous chemical  substances may be used to preserve horticultural products for longer 
periods.2201 However, it argues, research suggests that  fresh fruits stored for several months can 
be unsafe, with tropical fruits having a post -harvest life of a few weeks at most2202, and re course 
to controlled atmosphere may modify flavour, composition, nutritional value, and quality.2203  
7.3.16.1.1.2   New Zealand  
7.780.   In New Zealand's view, Indonesia fails to demonstrate that the objective of the measure is 
protecting human health2204, and only barely asserts this  objective without any supporting 
evidence. New Zealand argues that the design and structure of the regulations do not demonstrate 
that the policy objective of the six -month harvest requirement is protecting human health. 
New Zealand observes that the actu al purpose of the regulations in which the six -month harvest 
requirement is contained as a prerequisite for obtaining an RIPH is stated as being to "increase the 
effectiveness and efficiency of horticulture product import management " and "provide certainty  in 
RIPH issuing service ".2205 In this respect, New  Zealand contends that the underlying rationale of 
the requirements is rather to promote domestic production at the expense of imports.2206   
                                                
2194 Indonesia's second written submission, para. 201.  
2195 Indonesia's second written submission, para. 218; opening statement at the second substantive 
meeting, para. 33.  
2196 Indonesia's first written submission, para. 151.  
2197 Indonesia 's first written submission, para. 151.  
2198 Indonesia's first written submission, paras. 88 and 150.  
2199 Indonesia's first written submission, paras. 88 and 150.  
2200 Indonesia's second written submission, paras. 110 and 219 (referring to Exhibit IDN -73). Accordi ng 
to Indon esia, avocados and grapes last eight weeks at most; mangoes three  weeks;  oranges 12 weeks; and 
carrots six  weeks; opening statement at the second substantive meeting, para. 33.  
2201 Indonesia's second written submission, para. 219 (referring to Exhibits IDN -55,IDN-56; and 
IDN-73); Indonesia's opening statement at the secon d substantive meeting, para. 33 ). 
2202 Indonesia's second written submission, para. 220 (referring to Exhibit IDN -74). 
2203 Indonesia's second written submission, para. 220 (referring to  Exhibit IDN -75). 
2204 New Zealand's second written submission, paras. 278 -279. 
2205 New Zealand's second written submission, para. 279 (referring to Article 3 of MOA 86/2013 , Exhibit 
JE-15). 
2206 New Zealand's first written submission, paras. 70 -71. WT/DS477/R • WT/DS478/R  
 
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  7.781.   New Zealand asserts that , even if the first element of Article XX(b) were satisfied, 
Indonesia has not explained why the measure is necessary to protect human health, or how it 
contributes to food safety. New Zealand finds two of Indonesia's arguments contradictory. First, 
Indonesia argues that its equatorial climate affect s food safety, yet claims that it is better to store 
products in Indonesia.2207 Second, Indonesia argues that it has "limited capacity " to store imported 
horticultural products2208, yet claims that "storage capacity is already available in Indonesia for 
importer s who wish to store horticultural products for longer than [six] months ".2209 New Zealand 
contends that no evidence has been produced by Indonesia to support either proposition.2210 New 
Zealand observes that, in its second written submission, Indonesia claims th at the purpose of  the 
measure is to ensure that horticultural products are fresh, nutritious, chemical and preservative -
free, safe and of good quality, and argues that not all fresh fruit can be stored for longer than six 
months, and may be exposed to haza rdous chemicals in order to last longer.2211 In New Zealand's 
view, the measure is arbitrary as it makes no distinction based on factors such as storage life: 
some horticultural products have a storage life that is longer than six months2212, as previously 
ackno wledged by Indonesia.2213 Moreover, New Zealand does not accept that the purpose of the 
six-month harvest requirement is to protect against "hazardous chemicals ": food safety control 
and the six -month harvest requirement are separately regulated through Indon esian laws that are 
not at issue in this dispute.2214 New Zealand observes that none of the exhibits cited by Indonesia 
support its assertions.2215 For the sake of argument, New Zealand holds that, even if the measure 
did contribute to the protection of human he alth by enhancing food safety, its trade -restrictiveness 
(i.e., import prohibition on horticultural products harvested more than six months previously) 
outweighs any possible contribution towards such objective.2216 In New Zealand's view, after 
weighing and b alancing the relevant factors, it follows that Indonesia has not established that a 
six-month harvest requirement is "necessary " for the purposes of protecting human health.2217 For 
these reasons, New  Zealand does not consider it is necessary to elaborate on a less trade -
restrictive alternative measure. New  Zealand notes, however, that Indonesia already requires a 
health certificate and a phytosanitary certificate for fresh horticultural products. Indonesia has not 
explained why these requirements, which seem to be designed precisely to achieve the objective 
Indonesia claims for its six -month harvest requirement , would not be adequate to ensure that 
imported horticultural products are safe. Accordingly, New Zealand suggests these existing 
requirements should be  considered as less trade -restrictive alternative measures.2218 
7.3.16.1.1.3   United  States  
7.782.   The United States argues that Indonesia has not established that the six -month 
requirement has any connection to the protection of human health – either as an objective or in 
terms of an actual contribution.2219 With regards to the objective pursued by the measure, the 
United States contends that Indonesia has not presented any evidence suggesting that the six -
                                                
2207 New Zealand' s second written submission, para. 280 (referring to Indonesia's first written 
submission, paras. 88 and 151).  
2208 New Zealand's second written submission, para. 280 (referring to Indonesia's first written 
submission, para. 148).  
2209 New Zealand's second writt en submission, para. 280 (referring to Indonesia's first written 
submission, paras. 88 and 151).  
2210 New Zealand's second written submission, para. 280.  
2211 New Zealand's opening statement at the second substantive meeting, paras. 82 -83 (referring to 
Indonesia 's second  written submission, paras. 110 and  218).  
2212 Exhibit IDN -73, showing , inter alia , that onions have a storage life greater than six months.  
2213 New Zealand's opening statement at the second substantive meeting, paras. 82 -83 (referring to 
Indonesia's f irst written submission,  para. 150); response to Panel question N o. 123 (referring to Exhibit IDN -
54, showing that apples and pears can be stored up to 12 months under controlled atmosphere conditions that 
use low oxygen and high carbon dioxide levels to s low down respiration).  
2214 New Zealand's opening statement at the second  substantive meeting, para. 84 ( referring to MOA 
88/2011 concerning Food Safety Control over the Import and Export of Fresh Food of Plant Origin ).  
2215 New Zealand's response to Panel ques tion No. 123 (referring to Exhibit IDN -55, a Jakarta Post 
article from 2012, which refers to Indonesia's import licensing regime but focuses on labelling requirements 
and a (former) measure reducing the number of entry gateways, neither of which are being challenged in this 
dispute; and IDN -56, a photograph of "China -imported oranges", with a caption stating that "every kilogram of 
imported fruits contained 9.5 -21.1 milligrams of formalin. The WHO stipulates that the level of formalin must 
not higher than 6 0 milligrams." , which, in New Zealand's view does not support Indonesia's assertion that "In 
certain cases, fruits are exposed to hazardous chemicals in order to last longer"  and does not show that the 
six-month harvest requirement has a food safety object ive). 
2216 New Zealand's first written submission, paras. 268 -270. 
2217 New Zealand's second written submission, para. 281.  
2218 New Zealand's second written submission, para. 282.  
2219 United States' second written submission, paras. 185 and 189.  WT/DS477/R • WT/DS478/R  
 
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  month harvest requirement aims at ensuring food safety. Further, Indonesia ha s not rebutted the 
evidence submitted by the co -complainants that the actual purpose of all of Indonesia’s import 
licensing requirements, including the six -month harvest requirement, is the protection of domestic 
producers from competition from imports.2220 The United States contends that, even if the 
objective of the measure were, in part, the protection of human health, the second element of 
Article XX(b) would not be satisfied because Indonesia has not shown how the measure would 
contribute to food safety, let alone make  a contribution rising to the level of being "necessary ".2221 
The United States observes that Indonesia has not even asserted that the requirement is 
"necessary " for food safety  purposes , merely stating that health authorities "prefer " products to be 
stored locally. The United States also notes that there is no evidence in the text of the measure to 
suggest that the Ministries of Agriculture or Trade inspect horticultural products while they are 
stored in Indonesia, which is the crux of Indonesia ’s argument. Moreover, Indonesia’s reference to 
its "equatorial climate " undermines rather than supports its argument that, for food safety 
purposes, it is better for importers to store products in Indonesia.2222  
7.783.   According to the United States, the evidence shows that certain horticultural products 
could be safely stored for more than six months2223, thus confirming that the measure is not 
"necessary " for the protection of human health.2224 Indonesia has already acknowledged that this 
requirement "has no bearing " on whether products can be sold to consumers more than six 
months after harvest, and that some products "can be stored for more than six months .  . . when 
properly refrigerated ".2225 Indonesia’s exhibits also confirm the safety and widespread use of 
controlled  atmosphere storage.2226 Likewise, Indonesia presents evidence on formaline content in 
imported oranges without even suggesting that its measure is related to such concerns.2227 As the 
World Health Organization recommends maximum residue limits for formalin abov e those 
reported, the food safety argument that the exhibit was intended to support remains unclear. 
Moreover, the exhibit does not suggest any connection between the six -month requirement and 
freshness.2228 The United States observes that one exhibit mention s Indonesia’s import licensing 
regulations, focusing primarily on aspects of the regulation that are not relevant to this dispute.2229 
Thus, none of Indonesia's exhibits support its defence concerning the six -month harvest 
requirement.  
7.784.   The United States holds  that Indonesia’s argument ignores the fact that Indonesia already 
has health and SPS requirements in place that apply to horticultural products, including 
requirements that all imported horticultural products be accompanied by a Health Certificate and 
an SPS Certificate, which, along with the products to be imported, must be inspected in the 
country of origin before shipment.2230 Hence, the United States suggest s that a less trade -
restrictive and reasonably available alternative measure would be to continue t o rely on such 
requirements and not impose, in addition, the six -month requirement, which is highly trade -
restrictive and makes no apparent contribution to food safety.2231  
7.3.16.1.2   Whether Measure  8 is applied in a manner consistent with the chapeau  of 
Article XX  
7.785.   The parties' arguments about the chapeau  of Article XX of the GATT  1994 are explained in 
Section  7.3.5.1.2 above . 
                                                
2220 United States' sec ond written submission, para. 186.  
2221 United States' second written submission, para. 187.  
2222 United States' second written submission, para. 187.  
2223 According to the United States, Exhibits IDN -54 and IDN -73 confirm that apples, potatoes, pears, 
and carrots,  inter alia , can be stored s afely for longer than six months . 
2224 United States' oral statement at the second substantive meeting, para. 50; response to Panel 
question No. 123.  
2225 United States' oral statement at the second substantive meeting, para. 50 (refe rring to Indonesia's 
first written submission, paras. 150 -151).  
2226 United States' oral statement at the second substantive meeting, para. 50 (referring to Exhibit 
IDN-75, stating that controlled atmosphere storage is "used worldwide on a variety of fresh fr uits and 
vegetables" and its benefit s "have been amply demonstrated "). 
2227 United States' response to Panel question No. 123, referring to Indonesia's second written 
submission, para. 110; and Exhibit IDN –56. 
2228 United States' response to Panel question No. 1 23. 
2229 United States' response to Panel question No. 123 (referring to Exhibit IDN -55, mentioning labelling 
and a now -expired requirement restricting imports to certain ports of entry).  
2230 United States' second written submission, para. 187 (referring to Art icles 21 -22(g) -(h) of 
MOT 16/2013, as amended, Exhibit JE -21). 
2231 United States' second written submission, para. 188.  WT/DS477/R • WT/DS478/R  
 
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  7.3.16.2   Analysis by the Panel  
7.3.16.2.1   Introduction  
7.786.   The task before the Panel is to determine whether Measure  8 (Six -month harves t 
requirement ) is justified under Article XX(b) of the GATT  1994. We commence with the text of the 
relevant provision and the relevant legal standard.  
7.3.16.2.2   The relevant legal provision  
7.787.   Article XX of the GATT 1994 reads, in relevant part, as follows:  
Article XX  
General Exceptions  
Subject to the requirement that such measures are not applied in a manner which 
would constitute a means of arbitrary or unjustifiable discrimination between countries 
where the same conditions prevail, or a disguised restriction on inte rnational trade, 
nothing in this Agreement shall be construed to prevent the adoption or enforcement 
by any Member of measures:  
 (a) ... 
 (b) necessary to protect human, animal or plant life or health;  
… 
7.788.   The legal standard under this provision is explained  in Section  7.3.8.2.2 above . We 
commence by examining whether Indonesia has demonstrated that Measure  8 is provisionally 
justified by subparagraph  (b) of Article XX of the GATT  1994.  
7.3.16.2.3   Whether Indonesia has demonstrated that M easure  8 is provisionally 
justified under Article  XX(b) of the GATT  1994  
7.789.   We begin our analysis of Measure 8 by considering whether, as claimed by Indonesia, 
Measure  8 is provisionally justified by subparagraph  (b) of Article XX of the GATT  1994. Thus we 
shall examine whether Indonesia has demonstrated that Measure  8 is designed to protect human, 
animal or plant life or health and, if so, whether it is necessary in order to achieve such protection.  
7.790.   As to whether Measure  8 is designed to protect human, anima l or plant life or health2232, 
we note that Indonesia argued that this measure is necessary to ensure food safety, which it 
explains as consumers having access to fresh, nutritious, chemical - and preservative -free 
horticultural products.2233 Indonesia explained that, in order to facilitate inspection procedures, 
Indonesian health authorities prefer that horticultural products are stored domestically instead of 
at the origin country within six  months of harvest time. According to Indonesia, allowing imports 
after six months from harvest would render the verification of compliance with proper storage 
procedures impossible, particularly given the prevailing equatorial climate in Indonesia.2234 
Indonesia also contended that not all fresh fruits can be stored for longer t han six months without 
                                                
2232 In its second written submission, Indonesia indicated as follows:  
… 
(b) the requirement that imports of fresh horticultural products not  be harvested more than six 
months from the date of importation, the domestic harvest period limitations, restrictions on 
end-use, the harvest time period, limitations for animal products, the storage capacity 
requirement, the positive list, and the refere nce price are justified under Article XX (b) of the 
GATT because these measures are necessary for food safety and food security . 
Indonesia's second written submission, para. 207(b). The Panel observes that, although Indonesia has 
indicated a food security objective for Measure  8, the specific argumentation put forward by Indonesia with 
respect to Measure 8 does not appear to include food security concerns.  
2233 Indonesia's second written submission, para. 218; opening statement at the second substantive 
meetin g, para. 33.  
2234 Indonesia's first written submission, para. 151.  WT/DS477/R • WT/DS478/R  
 
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  any degradation in quality and nutritional value2235, and that the application of hazardous chemical 
substances may be used to preserve horticultural products for longer periods.2236 In this respect, 
Indonesia submitted that research sugge sts that fresh fruits stored for several months can be 
unsafe, with tropical fruits having a post -harvest life of a few weeks at most2237, and recourse to 
controlled atmosphere may modify flavour, composition, nutritional value and quality.2238  
7.791.   The co -complaina nts submitted that Indonesia failed to demonstrate that the objective of 
the measure is protecting human health and argued that the design and structure of the 
regulations do not demonstrate a policy objective of protecting human health.2239 New Zealand 
obser ved that the actual purpose of the regulations in which the six -month harvest requirement is 
contained as a prerequisite for obtaining an RIPH is stated as being to "increase the effectiveness 
and efficiency of horticulture product import management " and "provide certainty in RIPH issuing 
service ".2240 New Zealand contended that the underlying rationale of the requirements is to 
promote domestic production at the expense of imports.2241 The United States agreed and 
contended that Indonesia has not rebutted the ev idence submitted by the co -complainants that 
the actual purpose of all of Indonesia’s import licensing requirements, including the six -month 
harvest requirement, is the protection of domestic producers from import competition. In its view, 
Indonesia did no t present any evidence suggesting that the six -month harvest requirement aims at 
ensuring food safety.2242  
7.792.   As mentioned above, this first step in the analysis calls for an initial, threshold examination 
in order to determine whether there is a relationship b etween an otherwise WTO -inconsistent 
measure and the protection of human, animal or plant life or health.2243 Indonesia identified food 
safety2244 as the objective being pursued by this Measure. The co -complainants did not question 
that food safety falls under t he purview of the protection of human, animal or plant life or health 
under subparagraph  (b) of Article XX.  However, they did  question the existence of a relationship 
between Measure  8 and the protection of human health, and in particular, food safety.2245 We 
proceed to examine the evidence regarding the design of the measure at issue, including its 
content, structure, and expected operation, to establish whether such a relationship exists.2246 
7.793.   As described  in Section 2.3.2.8 above , Measure 8 consists of the requirement that all 
imported fresh horticultural products have been harvested less than six months prior to 
importation.2247 Indonesia implements this measure by means of Article 8(1)(a) of MOA 86/2013.  
Pursuant to this provision,  in order to obtain an RIPH for fresh horticultural products, an RI  must 
produce a statement committing  not to import  horticultural  products harvested over six months 
prior to importation . We recall that, in Section  7.2.12.3 above , we concluded that Measure  8 is 
inconsistent with Article  XI:1 of the GATT 1994 because, by virtue of its design, architecture and 
revealing structure, it constitutes a prohibition on importation . 
7.794.   As we mentioned in paragraph  7.631 above , we observe that nothing in the text of the 
regulations implementing this measure and, in particular, Article 8 of MOA  86/2013, refers to the 
                                                
2235 Indonesia's second written submission, paras. 110 and 219 (referring to Exhibit IDN -73). According 
to Indon esia, avocados and grapes last eight weeks at most; mangoes three  weeks;  oranges 12  weeks; and 
carrots six  weeks; opening statement at the second substantive meeting, para. 33.  
2236 Indonesia's second written submission, para. 219 (referring to Exhibits IDN -55, IDN -56; Exhibit 
IDN-73); opening statement at the second substantive meeting, pa ra. 33.  
2237 Indonesia's second written submission, para. 220 (referring to Exhibit IDN -74). 
2238 Indonesia's second written submission, para. 220 (referring to Exhibit IDN -75). 
2239 New Zealand's second written submission, paras. 278 -279. United States' second wri tten 
submission, para. 186.  
2240 New Zealand's second written submission, para. 279 (referring to Article 3 of MOA 86/2013, Exhibit 
JE–15). 
2241 New Zealand's first written submission, paras. 70 -71. 
2242 United States' second written submission, para. 186.  
2243 See Appellate  Body Report, Colombia – Textiles , para.  5.67, in the context of Article  XX(a) of the 
GATT 1994 and Argentina – Financial Services , para.  6.203, in the context of Article  XIV(c) of the GATS, which 
mirrors Article  XX(d) of the GATT  1994.  
2244 Indonesia' s first executive summary, para. 17; second written submission, para. 201. As explained 
in footnote  2174 above, Indonesia also argued that the objective of this measure is food security. We address 
this issue in Section  7.3.15.2.3  above.  
2245 New Zealand's second wri tten submission, paras. 278 -279; United States' second written 
submission, paras. 186 -187. 
2246 See Appellate  Body Reports, US – Shrimp , paras. 135–142; EC – Seal Products , para.  5.144; 
Colomb ia – Textiles , para.  5.68. 
2247 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand' s first 
written submission, para. 111; United  States'  first written submission, paras. 80 and 204.  WT/DS477/R • WT/DS478/R  
 
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  protection of human, animal or plant life or health as the policy objective of this measure. On the 
contrary, we note that MOA  86/2013 refers generally to simplification of the "import process of 
horticulture products " and to "providing certainty in the servicing of Import Recommendation of 
Horticulture Products " as its rationale.2248 We fail to see how the text of MOA  86/2013 could 
support Indonesia's contention that Measure 8 was formulated to address food safety concerns.  
7.795.   We nevertheless acknowledge, as we have observed before, that a measure that does not 
expressly refer to protecting human, anim al or plant life or health may be found to have a 
relationship with protecting human, animal or plant life or health following an assessment of the 
design of the measure at issue, including its content, structure, and expected operation.2249 In this 
vein, we observe that Measure 8 imposes a ban on horticultural products that have been harvested 
more than six months prior to their importation and that Indonesia linked this measure to food 
safety arguing that, i n order to facilitate inspection procedures, health  authorities prefer that 
horticultural products are stored domestically , instead of at the origin country , within six months of 
harvest time. Indonesia justified the need for such inspections and the length of the period by 
alleging that some horticultural  products cannot be stored for longer than six months without any 
degradation in quality and nutritional value2250, that research suggests that fresh fruits stored for 
several months can be unsafe2251, and that recourse to controlled atmosphere may modify flavou r, 
composition, nutritional valu e and quality.2252  
7.796.   The e vidence submitted to the Panel shows that certain horticultural products c an be safely 
stored for more than six months. For instance, Exhibits US -34 and IDN-54 explain that in the case 
of apples and pea rs, controlled atmosphere storage using low oxygen concentration content 
permits this product to be stored for up to 12 months.2253 However , Exhibit  IDN-73, including 
information from the FAO regarding storage of horticultural crops,  indicates that some horticultural 
products have a short storage life .2254 We note that, in Exhibit IDN-54, in an academic article  
entitled "Maximizing the Nutritional Value of Fruits & Vegetables ", Dr Diane M. Barrett mentions 
that "[m]ost perishable commodities, however, are stored under refrigerated conditions, and 
storage life may range from 8 –10 days for highly perishable fruits like berries to 8 –10 weeks for 
less-perishable commodities like squash, pumpkin, apples, grapes, and pears. " Dr Barrett also 
explains that  "loss of nutrie nts during fresh storage may be more substantial than consumers 
realize, so consumers should be educated about proper storage. Fruits and vegetables should be 
consumed soon after harvest, or postharvest handling conditions must be controlled such that 
nutrient degradation does not occur ".2255 
7.797.   Given the evidence before us, we agree that food safety, in the sense of  consumers' access 
to fresh, nutritious, chemical - and preservative -free horticultural products,  is associated with the 
storage of certain horticultu ral products for more than six months after harvest. Thus, in 
prohibiting the importation of horticultural products harvested more than six months before 
importation, Indonesia may be said to be pursuing, at least in the sense that Indonesia describes 
food safety, a food safety objective in connection with some products.2256 In our view, Measure  8 
is not incapable of protecting food safety by prohibiting imports of horticultural goods that may be 
unsafe for human consumption, and this would therefore indicate the existence of a relationship 
between this measure and the protection of human, animal or plant life or health .2257 Although not 
all horticultural products harvested more than six months prior to their importation pose a threat 
to food safety, the existence  of a number of horticultural products that do is sufficient for us to 
conclude that there is a relationship between Measure 8 and the objective of food safety, and that 
this Measure can be said to have been designed , at least in part,  to protect  human hea lth.  
                                                
2248 Exhibit JE -15. 
2249 Appellate  Body Repor t, Colombia – Textiles , para.  5.69, in the context of Article  XX(a).  
2250 Indonesia's second written submission, paras. 110 and 219 (referring to Exhibit IDN -73. According 
to Indonesia, avocados and grapes last eight weeks at most; mangoes three  weeks;  orange s 12 weeks; and 
carrots six  weeks; Indonesia's opening statement at the secon d substantive meeting, para. 33 .  
2251 Indonesia's second written submission, para. 220 (referring to Exhibit IDN -74). 
2252 Indonesia's second written submission, para. 220 (referring t o Exhibit IDN -75). 
2253 Exhibit IDN -54; See also  Exhibit USA -34 (Controlled Atmospheric Storage (CA) : Washington State 
Apple Commission ). 
2254 Exhibit IDN -73. 
2255 Exhibit IDN -54, p.  44. 
2256 Indonesia's second written submission, para. 218; opening statement at the s econd substantive 
meeting, para. 33.  
2257 Appellate  Body Report, Colombia – Textiles , para.  5.68. WT/DS477/R • WT/DS478/R  
 
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  7.798.   Having completed the threshold examination to determine whether there is a relationship 
between an otherwise WTO -inconsistent measure and the protection of human, animal or plant life 
or hea lth, we proceed to determ ine whether Indonesia has demonstra ted that Measure  8 is 
"necessary " to protect  human health . We recall that the "necessity test " involves a process of 
"weighing and balancing " a series of factors, including the importance of the objective, the 
contribution of the measure to that objective,  and the trade -restrictiveness of the measure  at 
issue.2258 In this respect, Indonesia argues that Measure 8 is necessary to ensure food safety2259, 
namely that consumers have access to fresh, nutritious, chemical - and preservative -free 
horticultural products.2260 Indonesia explains that, in  order to facilitate inspection procedures, 
health authorities prefer that horticultural products are stored domestically , instead of in the origin 
country , within six months of harvest time. Accordingly, Indonesia argues that al lowing imports at 
a later date would render the verification of compliance with proper storage procedures impossible, 
particularly given the prevailing equatorial climate.2261 The co -complainants responded by 
asserting  that Indonesia did not explain why the m easure is necessary to protect human health, or 
how it contributes to food safety. 2262 
7.799.   We recall that the Appellate Body has observed that the weighing and balancing exercise 
under the necessity test can be understood as "a holistic operation that involves p utting all the 
variables of the equation together and evaluating them in relation to each other after having 
examined them individually, in order to reach an overall judgement. "2263 We further recall that it is 
incumbent upon Indonesia to demonstrate that Mea sure 8 is necessary to protect human health. 
In this context, we observe that Indonesia has not addressed each of the individual variables 
under this test, i.e. the importance of the objective, the contribution o f the measure to that 
objective  and the trad e-restrictiveness of the measure . Indonesia has only made some general 
comments  about  this measure, such as that the health authorities prefer that horticultural 
products are stored domestically within six months of harvest time in order to facilitate insp ection  
of stored imported horticultural products .  
7.800.   Although  Indonesia d id not specifically address the importance of the objectives pursued 
by this measure in the context of its necessity  analysis,  we acknowledge that food safety in the 
sense understood by  Indonesia is an important objective and we note that the co -complainants d id 
not contest this. We thus proceed to the second step under the necessity test, namely the alleged 
contribution of Measure 8 to food safety  and thereby the protection of human hea lth. Indonesia did 
not present arguments or evidence specifically addressing the alleged contribution of Measure 8 to 
this objective , although it referred to its health authorities' preference regarding storage of  
horticultural products  domestically , and it maintained that allowing imports at a later date would 
render the verification of compliance with proper storage procedures impossible, particularly given 
the prevailing equatorial climate.2264  
7.801.   Concerning the contribution of Measure  8 to the stated policy objective of food safety, 
Indonesia has not provided any particular argumentation or evidence in this respect. Indonesia 
simply argued that the six -month harvest requirement  for fresh horticultural products is to ensure 
that fresh horticultural products "consumed by Indonesian people " are still nutritious, safe and of 
good quality.2265 Nonetheless, Measure 8 appears to be more concerned with the management of 
inspection procedures than with food safety issues posed by some horticultural products  that have 
been harvested more than six months prior to importation. This is confirmed, for instance, by the 
fact that Indonesia allows for the storage of horticultural products in its territory for longer than  six 
months.2266 We concur with the co -complainants that this me ans that Indonesia allows for the sale 
                                                
2258 Appellate Body Report, EC – Seal Products , para. 5.169 (referring to Appellate Body Reports, Korea 
– Various Measures on Beef , para. 164; US – Gambling , para. 306; and Brazil – Retreaded Tyres , para. 182).  
2259 Indonesia's second written submission, para. 201.  
2260 Indonesia's second written submission, para. 218; Indonesia's opening statement at the second 
substantive meeting, para. 33.  
2261 Indonesia's first written su bmission, para. 151.  
2262 New Zealand' second written submission, paras. 278 –280. United States' second written 
submission, para. 187.  
2263 Appellate  Body Report, Brazil – Retreaded Tyres , para. 182. See also , Appellate  Body Report, 
Colombia – Textiles , para.  5.75. The Appellate Body explains that, whether a particular degree of contribution 
is sufficient for a measure to be considered "necessary" cannot be answered in isolation from an assessment of 
the degree of the measure's trade -restrictiveness and of the re lative importance of the interest or value at 
stake. Appellate  Body Report, Colombia – Textiles , para.  5.77 
2264 Indonesia's first written submission, para. 151.  
2265 Indonesia's second written submission, para. 218; Indonesia's opening statement at the second 
substantive meeting, para. 33.  
2266 Indonesia's first written submission, paras. 151.  WT/DS477/R • WT/DS478/R  
 
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  to consumers of horticultural products that have been harvested more than six months before. 
This is also confirmed by Indonesia's statement that its health authorities have a preference for 
such products to be stored  locally where they can be readily inspected to ensure quality. We thus 
fail to see how Measure  8 contributes to ensuring that fresh horticultural products consumed by 
Indonesian people  are still nutritious, safe and of good quality when this Measure does not concern 
itself with the harvesting time of products actually sold to consumers. Indeed, Measure  8 only 
regulate s the harvesting time of imported products for purposes of allowing their importation. T his 
calls into question any  contribution Measure 8 can be said to make to the stated policy objective of 
ensuring food safety and thereby protecting human health.  
7.802.   Moving now to the trade -restrictiveness of the measure  and the existence of less trade -
restrictive measures that are reasonably available, we note that Indonesia has chosen to impose 
an absolute ban on the importation of horticultural products that have been harvested for more 
than six months prior to importation. To us, this is the most trade -restrictive measure that 
Indonesia could have chosen to  address its food safety concerns. In this connection, we note the 
Appellate Body's statements that "[a] measure with a relatively slight impact upon imported 
products might more easily be considered as 'necessary' than a measure with intense or broader 
restrictive effects ".2267 We also  recall that the Appellate  Body has explained that an alternative 
measure may be found not to be "reasonably available " where "it is merely theoretical in nature, 
for instance, where the responding Member is not capable of takin g it, or where the measure 
imposes an undue burden on that Member, such as prohibitive costs or substantial technical 
difficulties ".2268 We observe that, as pointed out by  the co -complainants2269, Indonesia  already has 
health and SPS requirements in place that a pply to horticultural products, including requirements 
that all imported horticultural products be accompanied by a Health Certificate and a Phytosanitary 
Certificate, which, along with the products to be imported, must be inspected in the country of 
origin before shipment. Indeed,  we recall that Article  21 of MOT 16/2013, as amended2270, 
provides that every horticultural produ ct imported by a PI or an RI  must first undergo verification 
or technical inquiry at its port of origin. Article  22 further specifies t he data that will be verified, 
including a Health Certificate and a Phytosanitary Certificate for fresh horticultural products. New 
Zealand submitted that Indonesia  did not explain why these certification requirements , which 
seem to be designed precisely t o achieve the objective Indonesia claims for its six -month harvest 
requirement , would not be adequate to ensure that imported horticultural products are safe. The 
United States echoe d New Zealand's argument and suggest ed that a less trade -restrictive and 
reasonably available alternative measure would be to continue to rely on such certification 
requirements and not  impose, in addition, the six -month requirement, which is highly trade -
restrictive and makes no apparent contribution to food safety.2271 We note th at Indonesia did not 
seek to rebut these arguments.  
7.803.   On the basis of the evidence presented by the co -complainants and in the absence of an 
effective rebuttal by Indonesia, we consider the existing health and phytosanitary certificate s for 
fresh horticultu ral products  at the port of origin can achieve the food safety objective of ensuring 
consumers access to fresh, nutritious, chemical - and preservative -free horticultural products. 
Moreover, as the measure already exists in Indonesia, it is clear that such a measure would not 
suffer from being "merely theoretical in nature " because Indonesia is  "not capable of taking it ". 
Nor would the measure "impose  an undue burden " on Indonesia because it is already in place.  
7.804.   Bearing in mind Indonesia's lack of argumentat ion concerning the "necessity " of Measure  8 
and the absence of any evidence supporting the contribution of Measure  8 to the protection of 
human health and the high degree of trade -restrictiveness that this measure involves, we conclude 
that Indonesia has n ot demonstrated that Measure 8 is necessary to protect human, animal or 
plant life or health in the sense of Article XX(b) of the GATT 1994.  Accordingly, we find that 
Indonesia has not demonstrated that Measure  8 is provisionally justified under subparagra ph (b) 
of Article XX of the GATT  1994. Accordingly, the Panel does not need to proceed to make findings 
under the chapeau of Article XX of the GATT  1994. Notwithstanding this decision, given that this 
finding may be appealed and that the Appellate Body wil l need sufficient facts on the record to 
address any argument under the chapeau  of Article XX  of the GATT  1994, we will nevertheless 
                                                
2267 Appellate  Body Report , Colombia – Textiles , para.  5.104 (referring to Appellate  Body Report, Korea 
– Various Measures on Beef , para. 163 ). 
2268 Appellate  Body Report,  US – Gambling, para. 308. See also , Appellate  Body Report, Colombia – 
Textiles , para.  5.74. 
2269 United States' second written submission, para. 187, referring to Articles 21 -22(g) -(h) of 
MOT 16/2013, as amended, Exhibit JE -10. New Zealand's second written submission , para. 282.  
2270 Exhibit JE -10. 
2271 United States' second written submission, para. 188  WT/DS477/R • WT/DS478/R  
 
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  assum e arguendo  that Measure  8 is provisionally justified under subparagraph  (b) of Article XX of 
the GATT  1994 and will ex amine whether Measure  8 is applied in a manner consistent with the 
chapeau  of Article XX.   
7.3.16.2.4   Whether Measure  8 is applied in a manner consistent with the chapeau  of 
Article XX  
7.805.   As explained in Section  7.3.1 above , Indonesia ar gued that its import licensing regimes for 
horticultural products and animals and animal products as a whole  are applied in a manner 
consistent with the chapeau  of Article XX of the GATT  1994. It did so without making any relevant 
distinctions between the individual measures at issue2272 and it conflated all three defences under 
subparagraphs (a), (b) and (d) of Article  XX of the GATT  1994. We recall that t he burden of 
demonstrating that the inconsistent measures that are provisionally justified under one of t he 
subparagraphs of Article  XX of the GATT  1994 are consistent with the requirements of the chapeau  
rests with Indonesia.2273 Given the manner in which Indonesia formulated its defence, t he Panel 
will examine whether Indonesia's import licensing regimes for horticultural  products and animals 
and animal products as a whole, including the individual measures therein, are applied in a 
manner consistent with the chapeau , with respect to all three relevant subparagraphs of Article XX 
of the GATT  1994.  
7.806.   The task bef ore the Panel is therefore to determine whether, as argued by Indonesia2274, 
Indonesia’s import licensing regimes for horticultural products and animals and animal products 
comply with the requirements of the chapeau  of Article XX because they are not applied  in a 
manner that constitutes a means of arbitrary or unjustifiable discrimination between countries 
where the same conditions prevail, or a disguised restriction of international trade. We commence 
with the first element of the chapeau and proceed to exam ine whether Indonesia has 
demonstrated that its import licensing regime s do not constitute a means of arbitrary or 
unjustifiable discrimination. We will thus consider the design, architecture, and revealing structure 
of these measures in order to establish  whether the import licensing regimes as a whole, in their 
actual or expected application, constitute a means of arbitrary or unjustifiable discrimination 
between countries where the same conditions prevail.2275 We recall  that, in order for a measure to 
be ap plied in a manner which constitutes  "arbitrary or unjustifiable discrimination between 
countries where the same conditions prevail ", three elements must exist: (i) the application of the 
measure must result in discrimination; (ii) the discrimination must b e arbitrary or unjustifiable in 
character; and (iii) this discrimination must occur between countries where the same conditions 
prevail.2276  
7.807.   With reference to these three elements, Indonesia argued that there is no discrimination 
between imported and domesti c products .2277 Regarding subparagraph  (a), Indonesia contended 
that pursuant to Law No 33/2014, domestic products are also required to have a Halal label2278; 
for subparagraph  (b), Indonesia submitted that the distinctions existing between imported and 
domestic  products are not in any way more onerous than necessary and provided as an example 
the regulation concerning quarantine of animal and plant products as applying to all imports, 
                                                
2272 Indonesia briefly addressed the compliance of the "individual elements" of its import licensing 
regime with the chapeau  in paragraphs 248 through 251 of its second writte n submission. Indonesia argued 
that none of the individual measures results in discrimination because: "the same legal, technical and 
administrative requirements are applied on all trading partners" (para. 249); custom enforcement measures 
understandably d o not apply to domestic products as by definition they are border measures; and, as far as 
halal assurance and food safety are concerned, the requirements are applied on a non -discriminatory basis. As 
to whether the individual measures concerned constitute  disguised restrictions of international trade, Indonesia 
argued that, in the present case, there is no lack of transparency due to the publication of each requirement 
and response to applications (para. 249).  
2273 Appellate Body Report, EC – Seal Products , para. 5.297 (referring to Appellate Body Report, US – 
Gasoline , pp. 22 -23, DSR 1996:I, p. 21).  
2274 Indonesia's second written submission, paras. 146 -148. 
2275 Appellate Body Report, EC – Seal Products , para. 5.302 (referring to Appellate Body Report, US – 
Shrim p, para. 160).  
2276 Appellate Body Report, US – Shrimp , para.  150. 
2277 Indonesia refers to the Appellate Body Report on US – Gambling , para. 351, finding that the 
occurrence of discrimination must be determined by articulating the standard between domestic and foreign 
services. Indonesia's secon d written submission, para. 150;  See also  Indonesia's second written submission, 
para. 249.  
2278 Indonesia cites Article 4 of Law No. 33/2014 concerning Halal Product Assurance, which states: 
"products that enter, circulate,  and traded in the territory of Indonesia must be certified halal", Exhibit IDN -47. 
Indonesia's second written submission, para. 150.  WT/DS477/R • WT/DS478/R  
 
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  exports, as well as domestic transportation2279; concerning subparagraph  (d), Ind onesia contended 
that no discrimination exists between importing countries because its import licensing regimes are 
applied invariably between all importing countries and , therefore, "it would logically follow that 
customs enforcement, by virtue of its def inition  …, refers to the import or export of goods ".2280 For 
Indonesia, as there is no discrimination,  it is unnecessary to further determine if the discrimination 
is unjustifiable or arbitrary, or if it takes place between countries in which like conditions  
prevail.2281 Should the Panel find otherwise, Indonesia considered that the resulting discrimination 
would not be arbitrary or unjustifiable because the chapeau  of Article XX does not prohibit 
discrimination per se , but rather arbitrary or unjustifiable discr imination.2282  
7.808.   The co -complainants disagreed and pointed out that Indonesia did not make any attempt 
to meet its burden under the chapeau  of Article XX in its first written submission, and that its 
limited arguments in its second submission are insufficient to sustain its claim.2283 With respect to 
the discrimination elements, New Zealand submitted that Indonesia has the burden of proving that 
Article XX provides a justification for each of its measures, demonstrating that each of these 
elements does not apply. In New Zealand's view, Indonesia did not do so, nor did Indonesia 
demonstrate that any of the challenged measures appl ies to domestic products or explain any 
rational basis for discriminating between domestic and foreign products . For example, it argued, 
Indonesia did not explain why it restricts the use, sale and distribution of imported products alone . 
In relation to whether discrimination occurs between countries where the same conditions prevail, 
New Zealand observed that Indonesia made frequent referen ce to its equatorial climate . According 
to New Zealand, this does not justify, for example, the Indonesian harvest period measure, as the 
same climatic conditions prevail for domestic as well as imported products once they are in 
Indonesia.2284 New Zealand re called that the Appellate Body has confirmed that one of the most 
important factors in an assessment of the first element of the chapeau is whether the 
discrimination can be reconciled with, or is rationally related to, the policy objective with which the 
measure has been provisionally justified under the subparag raphs of Article XX of the 
GATT  1994.2285 New Zealand considered that the text, structure and history of the import licensing 
regulations and the framework legislation pursuant to which Indonesia’s im port licensing regimes 
were established, show that the actual purpose of the challenged measures is to restrict imports of 
agricultural products when domestic production is deemed sufficient as part of Indonesia's policy 
to achieve self -sufficiency in food .2286 Thus, according to New Zealand, the import licensing 
regimes at issue are implemented through regulations made under these overarching laws2287, 
which carry into effect, through the challenged measures, the self -trade -restricting objectives. 
Hence, for New  Zealand, Indonesia failed to show that any of its measures can be reconciled with 
or is rationally connected to the policy objectives in Article XX.2288 
7.809.   In the same vein, t he United States submitted that the measures at issue arbitrarily or 
unjustifiably dis criminate against imports because they impose significant restrictions on trade and 
bear little or no relationship to the policy objectives with respect to which Indonesia seeks to 
                                                
2279 Indonesia cites Consideration (d) of Law 16/1992 concerning Animal, Fish and Plant Quarantine , 
Exhibit IDN -67. Indonesia 's second written submission, para. 150.  
2280 Indonesia refers to Article 1(1) of Law No. 17/2006 concerning Customs, Exhibit IDN -66. 
Indonesia's second written submission, para. 150.  
2281 Indonesia's second written submission, para. 151.  
2282 Indonesia's second  written submission, para. 152 ( referring to Appellate Body Report, US – 
Gasoline , p. 23 ). 
2283 New Zealand's second written submission, para. 300, where New Zealand observes that the sole 
reference to the chapeau in Indonesia's first wri tten submission is at pa ra. 124;  opening statement at the 
second substantive meeting, para. 48; United States' oral statement at the second substantive meeting, para. 
67. 
2284 New Zealand's second written submission, para. 308.  
2285 New Zealand's opening statement at the second substan tive meeting, paras. 49 -50 (referring to 
Appellate Body Reports, EC – Seal Products , para. 5.306).  
2286 New Zealand's second written submission, para. 303 (referring to its first written submission, 
paras.  2, 15-18 and  67-71). 
2287 For example, New  Zealand cites : Article 36B(1) of the Animal Law Amendment  (Exhibit JE -5), 
stating that importation of animals and animal products should only be done "if domestic production and 
supply of Livestock and Animal Product has not fulfill pu blic consumption"; Articles 14 -36 of the  Food Law 
(Exhibit JE -2), providing that imports of food are only allowed to the extent of any domestic shortfall; Article 
30(1) of the  Farmers Law  (Exhibit JE -3), prohibiting importation of agricultural commodities when the 
availability of domestic agricultural commodities is sufficient for consumption and/or government food 
reserves.  
2288 New Zealand's opening statement at the second substantive meeting, para. 50; New Zealand's 
second written submission, paras. 307 -309. WT/DS477/R • WT/DS478/R  
 
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  justify them under the Article XX subparagraphs.2289 Regarding the public mora ls exception under 
Article XX(a), the United States argued that Measures  6 and 14 ( use, sale and distribution 
requirements), which prohibit or restrict imported products’ access to retailers and consumers, 
result in arbitrary and unjustifiable discriminati on. Such restrictions serve only to impose burdens 
on importation that do not exist for domestic products.2290 In fact, domestic horticultural products 
are not required to be sold through distributors, and domestic animal products are not barred from 
traditio nal and other markets. R esponding to Indonesia's assertion that domestic products are also 
required to have a halal label2291, the United States clarifies that compliance with halal labelling or 
other requirements is not at issue in this dispute: the challeng ed measures are restrictions on the 
sale, use, and transfer of imported horticultural products (Measure  6); prohibition on the sale of 
imported beef and other animal products in traditional or modern markets (Measure  14); and 
limitation on the total quanti ties of imported horticultural products based on the importer’s 
ownership of storage capacity (Measure  5).2292 In its view, Indonesia offered no arguments under 
the chapeau  to address the arbitrary and unjustifiable nature of these restrictions. Responding to  
Indonesia's contention that discrimination, if it exists, is not arbitrary because the import licensing 
requirements and the rationale of the Indonesian decision -makers regarding certifications are 
"available to all applicants "2293, the United States recalle d that, in assessing the arbitrary or 
unjustifiable discrimination element of the chapeau , one of the most important factors is whether 
the discrimination can be reconciled with, or is rationally related to, the policy objective with 
respect to which the m easure has been provisionally justified under one of the subparagraphs of 
Article XX.2294 The United States believes that Indonesia’s arguments do not explain how the 
discrimination arising from the measures it seeks to justify under Article XX is rationally related to 
protecting halal, ensuring food safety, or securing compliance with customs enforcement. Thus 
Indonesia failed to show that its measures do not constitute arbitrary and unjustifiable 
discrimination.2295 
7.810.   Regarding the protection of human health unde r Article XX(b),  the United States submitted 
that restrictions based on the domestic harvest period (Measure  4), importers’ storage capacity 
(Measure  5), the use, sale and transfer of imported products (Measure  6), and the six -month 
harvest requirement (Me asure  8), the reference price (Measures  7 and 16) and domestic purchase 
requirements (Measure  15), constitute arbitrary and unjustifiable discrimination. In its view, each 
of these restrictions bears little, if any, relationship to the objective of protect ing human, animal or 
plant life or health. Because the restrictions are not rationally connected to the objective, they 
result in burdensome costs and limitations on the importation of horticultural and animal 
products.2296 Countering Indonesia's assertion that "[t]he distinctions which exist between 
imported and domestic products are not in any way more onerous than necessary ", citing a 
provision of its quarantine law as an example2297, the United States asserts that Indonesia 
provides no evidence or explanation  of what distinctions exist between imported and domestic 
products under this and other laws, or how these distinctions apply to the measures Indonesia 
seeks to justify under Article XX(b).2298 The United States considers that  Indonesia's purpo se for 
citing t he quarantine law remains unclear, as none of the measures at issue relates to quarantine 
of imports.2299 
7.811.   With respect to Article XX(d), the United States contended that Indonesia showed no 
rational connection between the application windows and validity peri ods (Measures  1 and 11), 
fixed licence terms (Measures  2 and 12), realization requirements (Measure  3 and 13), storage 
capacity requirements (Measure  5), and use, sale, and transfer restrictions (Measures  6 and 14) 
and the stated objective of securing comp liance with customs laws. Because these restrictions do 
not relate to the objective of securing compliance with Indonesia’s customs laws, they exist solely 
                                                
2289 United States' second written submission, para. 235.  
2290 United States' second written submission, para. 236.  
2291 United States' oral statement at the second substantive meeting, para. 6 8 (referring to Indonesia's 
second written submission, para. 150 (referring to Article 4 of Law No. 33/20 14 concerning Halal Product 
Assurance at Exhibit IDN -47, stating that "products that enter, circulate, and traded in the territory of 
Indonesia must be certified halal") ). 
2292 United States' oral statement at the second substantive meeting, para. 68.  
2293 Indon esia's second written submission, paras. 153 -154. 
2294 United States' oral statement at the second substantive meeting, para. 71 (referring to Appellate 
Body Report, EC – Seals  Products , para. 5.306).  
2295 United States' oral statement at the second substantive meeting, para. 71.  
2296 United States' second written submission, para. 237.  
2297 Indonesia's second written submission, para. 150 (referring to Consideration (d) of Law 16/1992 
concerning Animal, Fish and Plant Quarantine, Exhibit IDN -67). 
2298 United States' oral  statement at the second substantive meeting, para. 69.  
2299 United States' oral statement at the second substantive meeting, para. 69.  WT/DS477/R • WT/DS478/R  
 
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  to restrict imports and protect the domestic industry and, therefore, result in arbitrary and 
unjust ifiable discrimination.2300 Turning to Indonesia's argument that no discrimination arises from 
any of its measures because its import licensing regimes apply equally to all importing 
countries2301, the United States considered that it does not address the fact t hat Indonesia’s 
regimes do result in discrimination against imported products vis -à-vis domestic products.2302 In 
any event, the United States observed that Indonesia did not submit all the relevant customs or 
food safety laws or regulations related to its Ar ticle XX(d) defences, or specify  which aspects of 
these laws are relevant to the analysis under the chapeau .2303 Therefore, the United States 
contended that the Panel and the co -complainants have no basis upon which to evaluate 
Indonesia's assertion.  
7.812.   Turning to our own analysis, we observe that Indonesia maintained that there is no 
discrimination between imported and domestic products in its import licensing regimes. It put 
forward a number of examples. For instance, with reference to subparagraph  (a), Indone sia 
contended that pursuant to Law No 33/2014, domestic products are also required to have a Halal 
label.2304 However, as pointed out by the United States, compliance with Halal labelling or other 
requirements is not at issue in this dispute.2305 Indeed, from th e evidence on the record, we 
understand that Halal requirements are regulated in instruments other than measures at issue in 
this dispute. Therefore, the fact that domestic products are also subject to Halal requirements is 
not of relevance for our analysi s of discrimination in the sense of the chapeau  of Article  XX 
because we are to examine whether there is discrimination with respect to the relevant measures 
at issue in this dispute and, in particular, those aspects of the measures that we have found to b e 
inconsistent with Article XI:1 of the GATT  1994. In this sense, we are not to examine whether 
Halal requirements also apply to the measures at issue but rather whether these measures result 
in discrimination in terms of the chapeau of Article XX of the G ATT 1994.  
7.813.   We recall that Indonesia put forward defences under subparagraph  (a) with respect to 
Measure  5 (Storage ownership and capacity requirements), Measure  6 (Use, sale and distribution 
requirements for ho rticultural products), Measure  9 (Indonesia's import licensing regime for 
horticultural products as a whole), Measure  14 (Use, sale and distribution of imported bovine meat 
and offal requirements) and Measure  17 (Import licensing regime for animals and animal products 
as a whole) . We understand that t hese measures and, in particular, the restrictions that they 
impose, are not equally applicable to domestic products. We note that Indonesia's regulations 
implementing these measures specifically provide that they apply to importation. For instance, 
MOT 16/2013, as amended, is entitled "Provisions of the Import of Horticultural Products "; 
MOT 46/2013, as amended, is entitled "Provisions of the Import or Export of Animals and Animal 
Products "; MOA 139/2014, as amended, is entitled "Importation  of carcasses, meats, and/or their 
processed products into the Territory of the Republic of Indonesia "; MOA 86/2013 is entitled 
"Import Recommendations of Horticulture Products ". Although the measures at issue are mostly 
customs related and would therefore only apply on importation, we found in Sections 7.2.9.2 , 
7.2.10.2 , 7.2.13.2 , 7.2.18.2  and 7.2.21.2 above  that these measur es affect the competitive 
opportunities of importers and imported goods. In our view, this shows that there is discrimination 
between domestic and imported goods in the sense of that prohibited by the chapeau  of Article  XX. 
Furthermore, Indonesia did not p rovide the Panel with evidence showing that similar or equivalent 
measures are applied to domestic products. For instance, with reference to Measure  14, 
domestically produced goods may be sold directly in traditional markets where Indonesian  
consumers carr y out an important proportion of their purchases. However, imported products must 
go through a distributor, i.e. importers cannot sell imported goods directly in traditional markets, 
thus affecting the competitive opportunities of imported goods and import ers.   
7.814.   Likewise, Indonesia's reference, with respect to subparagraph  (b), to the regulation 
concerning quarantine of animal and plant products as applying to all imports, exports, as well as 
domestic transportation2306, is inapt  because, as argued by the Unit ed States, none of the 
                                                
2300 United States' second written submission, para. 238.  
2301 Indonesia's second written submission, para. 150 (referring, in th e context of Article XX(d), to Law 
No. 17/2006 concerning Customs, Article 1(1), Exhibit IDN -66). 
2302 United States' oral statement at the second substantive meeting, para. 70.  
2303 United States' oral statement at the second substantive meeting, para. 70.  
2304 In paragraph 150 of its second written submission, Indonesia cites Article 4 of Law No. 33/2014 
concerning Halal Product Assurance which states: "products that enter, circulate, and traded in the territory of 
Indonesia must be certified halal", Exhibit IDN -47. 
2305 United States' oral statement at the second substantive meeting, para. 68.  
2306 Indonesia cites Consideration (d) of Law 16/1992 concerning Animal, Fish and Plant Quarantine , 
Exhibit IDN -67. WT/DS477/R • WT/DS478/R  
 
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  measures at issue relates to quarantine of imports.2307 We recall that Indonesia put forward 
defences under this subpa ragraph with respect to Measure  4 (Harvest period requirement), 
Measure  5 (Storage ownership and capacity requirements ), 6 (Use, sale and distribution 
requiremen ts for horticultural products),  Measure  7 (Reference prices for chilli and fresh shallots 
for consumption), Measure  8 (Six-month harvest requirement), Measure  9 (Indonesia's import 
licensing regime for horticultur al products as a whole), Measure  10 (Prohibition of importation of 
certain beef and offal products, except in emergency circumstances), Measure  14 (Use, sale and 
distribution of imported bovine meat and offal requirements), Measure  15 (Domestic purchase 
requirement for beef), Measure  16 (Beef reference price) and Measure  17 (Import licensing regime 
for animals and animal products as a whole) . As we explained above, these measures affect the 
competitive relationship between imported and local products. In ad dition to the example of 
Measure  14, another instance that shows that the measures affect the competitive opportunities of 
importers and imported goods is Measure  16. We understand that no domestic distributor and 
market participant other than importers ap pears to be obliged to purchase a certain amount of 
local beef in order to be able to conduct its business. With respect to Measure  8 (Six -month 
harvest requirement), we understand that no domestic distributor and market participant other 
than importers is  subject to the requirement to only market horticultural products which have been 
harvested no later than six months before the  sale. We thus  understand that no similar restriction 
exists for domestic products. To us, this shows that discrimination exists between domestic and 
imported goods in the sense of that prohibited by the chapeau  of Article  XX.  
7.815.   Concerning subparagraph  (d), Indonesia contended that no discrimination exists between 
importing countries, as the import licensing regime is applied invaria bly between all importing 
countries.2308 However, Indonesia does not address the discrimination against imported products 
vis-à-vis domestic products.2309 In fact, Measures  1 and  11 (Limited application windows and 
validity periods), Measures  2 and 12 (Periodic and fixed import terms), Measures  3 and 13 (80 % 
realization requirement), Measure  5 (Storage ownership and capacity requirements), 
Measure  6 (Use, sale and distribution requirements for horticultural products), 
Measure  9 (Indonesia's import licensing regim e for horticultural products as a whole), and 
Measure  17 (Import licensing regime for animals and animal products as a whole), and in 
particular, the restrictions that they impose, are not equally applicable to domestic products. For 
instance, in response to a question from the Panel asking whether the same storage ownership 
and capacity requirements (Measure  5) apply to domestic distributors and market participants2310, 
Indonesia responded that the relevant legislation, Law 18/2012, does not specifically ment ion the 
storage facility requirement but that having storage for distributors and market participants is 
necessary for food safety reasons.2311 We thus understand Indonesia's failure to respond to the 
Panel's direct question to mean that distributors and mark et participants other than importers in 
Indonesia are not required to own their storage facilities or to guarantee that those facilities are 
large enough to hold a certain amount of products.2312  
7.816.   Considering the design, structure and expected operation of th ese measures as well as the 
evidence made available to the Panel, we are therefore of the view that discrimination exists 
between domestic and imported goods with respect to the import licensing regimes as a whole and 
the individual measures therein. We thus conclude that Indonesia's import licensing regimes for 
horticultural products and animal and animal products, including the restrictions which have been 
challenged individually and which we have found  to be  inconsistent with Article XI:1 of the 
                                                
2307 United States' oral statement at the second substantive meeti ng, para. 69.  
2308 Indonesia refers to Article 1(1) of Law No. 17/2006 concerning Customs, Exhibit IDN -66. 
2309 United States' oral statement at the second substantive meeting, para. 70.  
2310 Panel Question no.  98 read as follows:  
Article 8(e) of MOT  16/2013, as am ended by MOT 47/2013, requires that importers applying for 
designation as a RI are to provide "proof of ownership of storage facilities appropriate for the 
product's characteristics", while Article 8(2)(c) of MOA 86/2013 requires importers to include a 
statement of ownership of storage as part of their RIPH applications. Are domestic distributors 
and market participants in the horticultural supply chain required to own storage facilities? Please 
cite and submit the relevant legislation to this effect.  
2311 Indonesia's response to Panel question No.  98 was as follows:  
The legislation concerning storage facilities for domestic distributors and market participants is 
Law 18/2012 "Concerning Food " (Exhibit IDN –6). Pursuant to Article 71, all parties involved in 
the food supply chain are required to control food risks in order to ensure food safety.  This 
includes storage, transport and/or distribution of food.  Although the storage facility requirement 
is not explicitly mentioned, having storage for distributors and m arket participants in the food 
supply chain is necessary to ensure food safety.  (footnotes omitted)  
2312 This is also the understanding of the United States in its comments on Indonesia's response to Panel 
question No.  98. WT/DS477/R • WT/DS478/R  
 
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  GATT  1994, result in discrimination between imported and domestic products in the sense of the 
chapeau  of Article  XX of the GATT  1994.  
7.817.   The next question is whether such discrimination is arbitrary or unjustifiable. We recall that 
one of the most important factors in an assessment of arbitrary or unjustifiable discrimination is 
the question of whether the discrimination can be reconciled with, or is rationally related to, the 
policy objective with respect to which the measure has been provisionally justified under o ne of 
the subparagraphs of Article XX.2313 In Brazil – Retreaded Tyres , the Appellate Body considered 
this factor particularly relevant in assessing the merits of the explanations provided by the 
respondent as to the cause of the discrimination.2314 
7.818.   Indonesia ar gued that, in contrast to the US – Shrimp  case, information on its import 
licensing regime, the application procedures, as well as the rationale underpinning the granting of 
import licences, is  readily accessible to all.2315 For this reason, Indonesia conside red that we 
should find that its measures do not constitute a means of "arbitrary discrimination ". Furthermore, 
Indonesia contended that it should not be obliged to engage in negotiations with the complainants 
regarding a domestic law over which it has ful l autonomy.2316 In our view, Indonesia appears to 
misunderstand the Appellate Body's reasoning in US – Shrimp . The fact that the application 
procedures and their rationales are known to importers is not a determining factor in deciding 
whether the discriminat ion can be reconciled with, or is rationally related to, the policy objective 
with respect to which the measure has been provisionally justified under one of the subparagraphs 
of Article XX. It is for Indonesia to show how the discrimination arising from t he measures it seeks 
to justify under Article XX can be reconciled with, or is rationally related to, protecting the public 
moral of Halal (under Article XX(a)), ensuring food safety (under Article XX(b)), or securing 
compliance with customs enforcement (u nder Article XX(d)).  
7.819.   As explained in Section  7.3.4 above , we concluded that Indonesia put forward defences 
under Article  XX(a) with respect to Measure  5 (Storage ownership and capacity requirements), 
Measure  6 (Use, sale and distribution requirements for horticultural products), Measure  9 
(Indonesia's import licensing regime for horticultural products as a whole ), Measure  14 (Use, sale 
and distribution of imported bovine meat and offal requirements) and Measu re  17 (Import 
licensing regime for animals and animal products as a whole ). We recall that subparagraph  (a) 
concerns the protection of public morals. Indonesia maintained that these measures are necessary 
to protect the public moral of Halal  but did not e xplain how the discrimination arising from these 
measures can be reconciled with, or is rationally related to, protecting the public moral of Halal. 
For instance, Indonesia did not explain how the discrimination arising from the requirement to own 
storage facilities with a certain capacity, instead of leasing or renting them, and from allowing 
importers to bring into Indonesia only a quantity equal to the owned storage capacity, has any 
connection with the protection of halal requirements or with public mor als. Our understanding of 
the evidence before us is that relevant imported goods can only come into Indonesia if 
accompanied by the necessary Halal certifications, and that in the case of fresh horticultural 
products, there are no halal requirements. We fa il to understand what the storage 
ownership/capacity requirements have to do with the objective of protecting halal requirements 
given that such protection is already ensured through a different set of regulations. We can find no 
rational connection betwee n the storage measure and the protection of public morals. The same 
goes for the use, sale and distribution requirements for horticultural products  and for imported 
bovine meat and offal addressed in Measures 6 and 14. We recall that these requirements pro hibit 
or restrict imported products' access to retailers and consumers and that these limitations do not 
apply to domestic products. Bearing in mind that both imported and domestic products are subject 
to Halal regulations, we do not understand how the res ulting discrimination can be reconciled with, 
or is rationally related to, protecting halal regulations.  
7.820.   Regarding the protection of human, animal or plant life or health under Article XX(b), we 
recall, as explained in Section  7.3.4 above , that we concluded that Indonesia put forward defences 
under Article  XX(b) with respect to Measures  4 (Harvest period requirement), 5  (Storage 
ownership and capacity requirements), 6  (Use, sale and distribution requirements f or horticultural 
products), 7  (Reference prices for chilli and fresh shallots for consumption), 8  (Six-month harvest 
requirement), 9  (Indonesia's import licensing regime for horticultural products as a whole), 
10 (Prohibition of importation of certain beef  and offal products, except in emergency 
                                                
2313 See Appellate Body Reports, US – Shrimp , para. 165; and Brazil – Retreaded Tyres , paras. 227, 
228, and 232; EC – Seal Products , para. 5.306.  
2314 Appellate Body Report, Brazil – Retreaded Tyres , para. 227.  
2315 Indonesia's second written submission, paras. 153 –154.  
2316 Indonesia's second written submission, paras. 153 –154. WT/DS477/R • WT/DS478/R  
 
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  circumstances), 14  (Use, sale and distribution of imported bovine meat and offal requirements), 
15 (Domestic purchase requirement for beef), 16  (Beef reference price), 17  (Import licensing 
regime for animals and ani mal products as a whole) and 18 (Sufficiency of domestic production to 
fulfil domestic demand) . Indonesia did not explain how the discrimination arising from these 
measures can be reconciled with, or is rationally related to, protecting human, animal or  plant life 
or health . For instance, we fail to see how the discrimination resulting from the reference price 
system, which leads to an import prohibition when triggered and still has a limiting effect on 
importation when inactive, can be reconciled with, or is rationally related to, protecting human, 
animal or plant life or health . Indonesia's reference to Consider ation (d) of Law  16/1992 
concerning Animal, Fish and Plant Quarantine in this respect2317 fails to persuade us that such a 
relationship exists  because , as we explained above, none of the measures at issue relates to 
quarantine of imports. The same goes  for the harvest period requirements, the storage ownership , 
capacity requirements and other measures at issue . We find no relationship to the protection of 
human life or health and Indonesia does not suggest one.  
7.821.   With respect to Article XX(d), as explained in Section  7.3.4 above , we concluded that 
Indonesia put forward defences under Article  XX(d) with respec t to Measures  1 and 11 (Limited 
application windows and validity periods), Measures  2 and  12 (Periodic and fixed import terms), 
Measures  3 and 13 (80 % realization requirement), Measure  5 (Storage ownership and capacity 
requirements), Measure  6 (Use, sale a nd distribution requirements for horticultural products), 
Measure  9 (Indonesia's import licensing regime for horticultural products as a whole), and 
Measure  17 (Import licensing regime for animals and animal products as a whole). Indonesia did 
not explain how the discrimination arising from these measures can be reconciled with, or is 
rationally related to, securing compliance with its WTO -consistent laws and regulations. We recall 
that Indonesia referred to these laws and regulations as being those necessa ry to secure 
compliance with customs requirements. We are not persuaded that the discrimination arising from 
these measures can be reconciled with, or is rationally related to, the objective of securing 
compliance with Indonesia's customs laws. For instanc e, we fail to see how the discrimination 
resulting from the storage ownership and capacity requirements has any rational connection with 
customs enforcement, because enforcing customs can be achieved irrespective of the ownership or 
the size of the storage  facilities. The same goes for the 80 % realization requirement and the other 
measures at issue .   
7.822.   The co -complainants argued that the actual policy objective behind all these measures is 
to achieve self -sufficiency through domestic production by way of res tricting and, at times, 
prohibiting imports. We concur with New Zealand that the text, structure and history of the import 
licensing regulations and the framework legislation pursuant to which Indonesia’s import licensing 
regimes were established, show tha t this is the case2318, as we explained in Section 2.2.1 above . 
The Animal Law, Animal Law Amendment, Horticulture Law, Food Law and Farmers Law explicitly 
provide that imports are made contingent on the availability of suffici ent domestic supply to satisfy 
domestic demand. For instance, Article  36 of the Food Law establishes that imports of food "can 
only be done if the domestic [f]ood [p]roduction is insufficient and/or cannot be produced 
domestically ".2319 Similarly, Article 30 of the Farmers Law establishes a prohibition from importing 
agricultural commodities "when the availability of domestic Agricultural Commodities is sufficient 
for consumption and/or Government food reserves ".2320 In the same vein, Article 36B(1) of the 
Animal  Law Amendment provides that the "[i]mportation of [l]ivestock and [a]nimal [p]roduct 
from overseas into the Territory of the Republic of Indonesia can be perform[ed] if domestic 
production and supply of Livestock and Animal Product has not fulfil[ed] publ ic consumption " 
(emphasis added). Likewise, Article 88 of  the Horticulture Law  provides that  imports of 
horticultural products must observe several criteria, including the availability of domestic 
horticultural products and the established production and c onsumption targets for horticultural 
products.2321 We recall that these overarching laws are implemented through the regulations 
issued2322 by the Ministry of Trade and the Ministry of Agriculture that regulate Indonesia's import 
                                                
2317 Consideration (d) of Law 16/1992 concerning Animal, Fish and Plant Quarantine reads as follows: 
"that the ever -increasing international and intra -national movement of animals, fish, and plants through trade, 
exchange, and dist ribution enhances the likelihood of the introduction and dissemination of pests and diseases 
of animals, fish, and plants that may do damage to these biotic natural resources".( Exhibit IDN -67). 
Indonesia's second written submission, para. 150.  
2318 New Zealan d's second written submission, para. 303 (referring to its first written submission, 
paras.  2, 15-18 and  67-71). 
2319 Exhibit JE -2. 
2320 Exhibit JE -3. 
2321 Exhibit JE -1. 
2322 MOT 16/2013, as amended, and MOA  86/2013 set out Indonesia's import licensing regime for 
horticultural products in force at the time of the e stablishment of the Panel; and  MOT 46/2013, as amended, WT/DS477/R • WT/DS478/R  
 
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  licensing regimes. These impleme nting regulations carry out the task of, among other things, 
ensuring sufficiency of domestic production by means of a series of import restrictions and 
prohibitions. In addition to the texts of the laws, the evidence in our record supports our 
understandi ng. For instance, as pointed out by the United States, we find correspondence by 
government officials charged with administering the measures at issue where they openly discuss 
how and why they restrict imported products. Specifically, the Ministry of Agri culture Director of 
Horticulture explains that Indonesia imposes these restrictions to ensure that imported 
horticultural products do not compete with local products during their harvest season.2323 
Similarly, the Minister of Agriculture was reported as stati ng that "[i]mports are only for covering 
domestic shortfalls " and that "meat imports will be gradually reduced and import restrictions will 
be tightened ".2324  
7.823.   Like the Appellate Body in Brazil – Retreaded Tyres , we have "difficulty understanding how 
discrimi nation might be viewed as complying with the chapeau of Article XX when the alleged 
rationale for discriminating does not relate to the pursuit of or would go against the objective that 
was provisionally found to justify a measure under a paragraph of Arti cle XX".2325  
7.824.   In the light of the foregoing, w e conclude that the measures at issue, which include 
Indonesia's import licensing regimes for horticultural products and animals and animal products as 
a whole and the individual measures therein, are applied in a  manner that constitutes a means of 
arbitrary or unjustifiable discrimination contrary to the requirements of the chapeau  of Arti cle XX 
of the GATT  1994, given  the absence of a rational connection between the discrimination and the 
policy objectives protec ted under subparagraphs (a), (b) and (d) of Article XX  of the GATT  1994.  
7.825.   Concerning the third element, namely the discrimination between countries where the 
same conditions prevail, Indonesia did not provide relevant argumentation. We recall that , in 
deter mining which "conditions " prevailing in different countries are relevant in the context of the 
chapeau , subparagraphs (a), (b) and (d) of Article XX provide pertinent context in the sense that 
the "conditions " relating to the particular policy objective un der the applicable subparagraph are 
relevant for the analysis under the chapeau .2326 We also recall that, s ubject to the particular 
nature of the measures and the specific circumstances of the c ase, the provisions of the 
GATT  1994 with which a measure has bee n found to be inconsistent may also provide useful 
guidance on the question of which "conditions " prevailing in different countries are relevant in the 
context of the analysis under the chapeau . In particular, the type or cause of the violation that has 
been found to exist may inform the determination of which countries should be compared with 
respect to the conditions that prevail within those countries.2327 As with other elements of the 
analysis under the chapeau , Indonesia has not provided the Panel with re levant argumentation in 
support of its contention that different conditions applied in the sense of the chapeau . In 
particular, it has not developed argumentation on which countries and which conditions we are to 
examine. We recall that it is incumbent upo n Indonesia to demonstrate that its measures are 
applied in a manner consistent with the chapeau of Article XX . We note that  New Zealand observed 
that Indonesia made frequent reference to its equatorial climate in the context of its defence. 
According to N ew Zealand, this does not justify, for example, the discrimination found in the 
Indonesian harvest period measure, because the same climatic conditions prevail for domestic as 
well as imported products once they are in Indonesia.2328 In our view , Indonesia di d not suggest 
explicitly that its equatorial climate resulted in different prevailing conditions between itself and 
the co -complainants thereby justifying its discriminatory application of the import licensing 
regimes . Had it done so, we would agree with N ew Zealand that Indonesia's reliance on its climatic 
conditions could not justify treating New Zealand or the United States differently with respect, for 
example, to Measure  5 (Storage ownership and capacity requirements) or Measure  8 (Six month 
                                                                                                                                                  
and MOA  139/2014, as amended2322, do the same for Indonesia's import licensing regime for animals and 
animal products.  
2323 United States' secon d written subm ission, para. 240  (referring to its first written submission, 
paras.  62, 63; and Exhibit US -25. See also  Exhibit NZL -39).  
2324 Exhibits NZL -1 and USA -10. See also  Exhibit USA -11, where the it is reported that the Minister of 
Agriculture used an statement on how meat imports would be limited: "Previously, Agricultural Minister 
Suswono said that the Ministry of Agriculture will decrease its meat imports in 2012 by establishing that 
imports do not exceed 20% [of total domestic demand] or a volume of 85,000 tons – lowered from the 90,000 
tons in total realized meat imports in 2011. 'Meat imports of 85,000 tons in 2012 will come from imports of 
283,000 heads of live cattle, and 34,000 tons of meat,' said Suswono to Agrofarm".  
2325 Appellate Body Report, Brazil – Retre aded Tyres , para. 227. 
2326 Appellate Body Report, EC – Seal Products , para. 5.300.  
2327 See Appellate Body Report s, US – Gasoline , p. 23 -24, DSR 1996:I, pp. 21 -22; US – Shrimp , para. 
150; EC – Seal Products , para.  5.300 . 
2328 New Zealand's second written submissio n, para. 308.  WT/DS477/R • WT/DS478/R  
 
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  harvest re quirement ). This is because the climatic condition s of New Zealand and the 
United  States are irrelevant to the application of these Measures.  
7.826.   In the light of our earlier conclusion that the measures at issue are applied in a manner 
that constitutes a mean s of arbitrary or unjustifiable discrimination and in  the absence of any 
relevant argumentation from Indonesia concerning whether different conditions appl y in the sense 
of the chapeau, we conclude that Indonesia has failed to demonstrate that its Measures  are 
applied in a manner that does not constitute a means of arbitrary or unjustifiable discrimination 
between countries where the same conditions prevail.  
7.827.   As discussed in  Section  7.3.16.2.3 above , the Panel does not conside r it necessary to 
make findings under the chapeau of Article XX of the GATT  1994 because it has found that 
Measure  8 is not provisionally justified under subparagraph  (b) of Article  XX. However, assuming 
arguendo  that Measure  8 is provisionally justified u nder this subparagraph, the Panel considers 
that Indonesia has failed to demonstrate that its import licensing regimes for horticultural products 
and animals and animal products as a whole, and the individual measures therein , including 
Measure  8, are appl ied in a manner consistent with the chapeau  of Article  XX of the GATT  1994.  
7.3.16.2.5   Conclusion  
7.828.   In the light of the foregoing, we find that Indonesia has failed to demonstrate that 
Measure  8 is justified under Article  XX(b) of the GATT  1994.   
7.3.17   Conclusion concerning  Indonesia's defences under Article s XX(a), (b) and (d) 
with respect to Measures 9 through 17  
7.829.   We have found in Section  7.3.16.2.4 above  that, assuming arguendo  that Measure  8 is 
provisionally justified under subparagraph  (b) of Article XX of the GATT  1994, the Panel consider s 
that Indonesia has failed to demonstrate that its import licensing regimes for horticultural products 
and animals and animal products as a whole, and the individual measures therein , including 
Measure  8, are applied in a manner consistent with the chapeau  of Article  XX of the GATT  1994.  
We recall that Measure  9 consists  of Indonesia's import licensing regime for horticultural products  
as a whole.  We also recall that Measures  10 through 1 6 are individual c omponents of Indonesia's 
import licensing regime for animals and animal products  and that Measure  17 consists of  
Indonesia's import licensing regime for animals and animal products  as a whole . Indonesia has 
therefore failed to demonstrate that these Measur es are applied in a manner consistent with the 
chapeau  of Article  XX of the GATT  1994.  Bearing in mind that compliance with the chapeau  of 
Article XX is a  necessary  requirement in order for a measure to find justification under this 
provision, we refrain f rom continuing our analysis of Indonesia's defences under Article XX(a), (b) 
or (d) of the GATT  1994 for Measures  9 through  17.2329  
7.830.   We therefore find that Indonesia  has failed to demonstrate  that Measures  9 through  17 are 
justified under Articles XX(a), (b) or (d) of the GATT  1994, as appropriate.  
7.4  Claims pursuant to Article  4.2 of the Agreement on Agriculture  
7.4.1   Arguments of the Parties  
7.831.   Most of the arguments of the p arties concerning the consideration of the 18 measures at 
issue as restrictions on importation p ursuant to Article XI:1 of the GATT  1994 apply mutatis 
mutandi  to the present claims. For all other arguments, we refer to Annexes  C-1 through C -6. 
7.4.2   Analysis by the Panel  
7.832.   We recall that, in Section 7.2 above , we found that Me asures  1 through 18 are inconsistent 
with Article XI:1 of the GATT  1994 because they constitute prohibitions or restrictions on 
importation. We also found in Section 7.3 above  that Measures 1 through 18 are not justified 
under Articles XX(a), XX(b) or XX(d) of the GATT  1994, as appropiate.  
7.833.   We further recall that "[a] panel has to address those claims on which a finding is 
necessary in order to enable the DSB to make sufficiently precise recommendations and rulings so 
                                                
2329 See Section  7.3.4 for an account of these defences.  WT/DS477/R • WT/DS478/R  
 
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  as to a llow 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' ".2330 The Panel considers 
that its findings pertaining to the inconsistency of Measures  1 through  18 with Article  XI:1 of the 
GATT  1994 and the absence of a justification under Articles XX(a), XX(b) or XX(d) of the 
GATT  1994 ensures the effective resolution of this dispute. Accordingly, the Panel concludes that it 
is not required to continue its analy sis and make specific findings on the consistency of these 
Measures with Article  4.2 of the Agreement on Agriculture.  
7.5  Claims pursuant to Article III:4 of the GATT  1994  
7.5.1   Introduction  
7.834.   Both New Zealand and the United States included in their panel request s claims pursuant 
to Article III:4 o f the GATT  1994 against Measure  6 (Use, sale and distribution requirements for 
horticultural products), Measure  14 (Use, sale and distribution of imported bovine meat and offal 
requirements) and Measure  15 (Domestic purchase requireme nt for beef). However, only 
New Zealand has provided substantive arguments in support of its claims under this p rovision. In 
response to Panel question N o. 4, the United  States explained that it "has not presented any 
argumentation concerning Arti cle III:4 of the GATT 1994 and has not asked the Panel to make 
findings concerning the inconsistency of the challenged measures with Article III:4. Nor has the 
United  States at this point definitively withdrawn these claims ". The United  States has not 
presented any subsequent argumentation or request for findings by the Panel under this provision. 
Accordingly, in the absence of any argumentation concerning its claims pursuant to Article III:4 of 
the GATT  1994, we find that the United States has failed to ma ke a prima facie  case with respect 
to its claims pursuant to this provision.  
7.835.   Consequently, our analysis below only concerns New Zealand's claims pursuant to 
Article  III:4 of the GATT  1994.  
7.5.2   Whether Measure  6 (Use, sale and distribution requirements for ho rticultural 
products) is inconsistent with Article III:4 of the GATT  1994  
7.5.2.1   Arguments of the Parties  
7.5.2.1.1   New Zealand  
7.836.   New Zealand claims that Measure  6, insofar as it is considered by the Panel to be an 
internal measure, is contrary to Article  III:4 of the GATT  1994.2331 New Zealand submits that the 
restrictions inherent to Measure  6 only apply to imported products and not to domestic 
products.2332 In New Zealand's view, because the only factor that determines whether Measure  6 
applies is origin, the covered imported an d domestic horticultural products are "like" for the 
purposes of Article  III:4 of the GATT  1994.2333 New Zealand further submits that MOT 16/2013 
falls within the definition of "laws, regulations and requirements " in Article III:4.2334 For 
New Zealand, Measure  6 affects the internal sale, distribution and use of imported horticultural 
products because it explicitly prescribes the use, sale and distribution channels through which 
imported horticultural products may be channelled, namely only through distributors o r in 
industrial production processes.2335 New Zealand argues that Measure  6 accords imported products 
less favourable treatment than "like" domestic products,2336 formally treating imported 
horticultural products differently from their domestic equivalents.2337  
7.837.   New Zealand states that Indonesia does not appear to contest that Measure  6 falls within 
the scope of Article III:4 of the GATT 1994, but rather relies on defences under Article XX of the 
GATT  1994.2338 New Zealand contends that in doing so Indo nesia appears to  understand 
                                                
2330 Appellate Body Report, Australia – Salmon , para. 223 (referring to Article 21.1 of the DSU).  
2331 New Zealand's first written submission, para. 410. 
2332 New Ze aland's first written submission, para. 412 (referring to Articles 7 and 15 of MOT 16/2013, 
Exhibit JE -8)  
2333 New Zealand's first written submission, para. 412.  
2334 New Zealand's first written submission, para. 413.  
2335 New Zealand's first written submission, p ara. 414.  
2336 New Zealand's first written submission, paras. 415 and 417.  
2337 New Zealand's first written submission, para. 416 (referring to Articles 7 and 15 of MOT 16/2013, 
Exhibit JE -8),  
2338 New Zealand's opening statement at the second substantive meeting of the Panel, para. 67.  WT/DS477/R • WT/DS478/R  
 
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  New Zealand's argument as challenging restrictions on the sale of fresh horticultural products in 
traditional, open -air markets. New Zealand understands that fresh imported horticultural products 
are not prohibited from sale in traditional, ope n-air markets. Rather, New Zealand asserts that 
fresh horticultural products imported by an RI must be transferred to a distributor and RIs are 
prohibited from trading or transferring the horticultural products directly to consumers or retailers. 
Similarly , New Zealand asserts that a PI may only import horticultural products as raw materials or 
supplementary materials for industrial production products. New Zealand claims that no such 
restriction is imposed on the like domestic product.2339 
7.5.2.1.2   Indonesia  
7.838.   With resp ect to New Zealand's alleged claim that the restriction from sale in traditional, 
open-air Indonesian market, accords less favourable treatment than like domestic products, 
Indonesia responds that this requirement applies uniformly to imports and domestic products. For 
Indonesia, Measure  6 does not accord "less favourable treatment " to like domestic products within 
the meaning of Article III:4.2340 
7.5.2.2   Analysis by the Panel  
7.839.   We recall that in Section  7.2.10.3 above , we found that Mea sure 6 is inconsistent with 
Article  XI:1 of the GATT 1994 because, by virtue of its design, architecture and revealing 
structure, it constitutes a restriction having a limiting effect on importation . We also found that 
Indonesia has failed to demonstrate t hat Measure  6 is justified under Articles  XX(a), (b) and (d) of 
the GATT  1994. We further recall that "[a] panel has to address those claims on which 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' ".2341 The Panel considers 
that its findings pertaining to the inconsistency of Measure  6 and the absence of justification under 
Articles XX(a), XX(b) or XX(d) of the GATT  1994 ensures the effective resolution of this dispute. 
Accordingly, the Panel considered  that it is not required to continue its analysis and make specific 
findings on the  consistency of Measure  6 with Article III:4 of the GATT  1994.  
7.840.   Accordingly, the Panel declines to rule on the consist ency of Measure  6 with Article  III:4 of 
the GATT  1994.  
7.5.3   Whether Measure  14 (Use, sale and distribution of imported bovine meat and offal 
requirements) is inconsistent with Article III:4 of the GATT 1994  
7.5.3.1   Arguments of the Parties  
7.5.3.1.1   New Zealand  
7.841.   New Zealand claims that Measure  14, insofar as it is considered by the Panel to be an 
internal measure, is contrary to Article  III:4 of the GATT  1994.2342 New Zealand submits that the 
restrictions inherent to Measure  14 only apply to imported bovine meat and offal and not to 
domestic products .2343 For New Zealand, because the only factor that determines whether the use, 
sale and distribution restrictions apply is o rigin, imported and domestic bovine meat and offal are 
"like" for the purposes of Article  III:4 of the GATT  1994.2344 New Zealand also argues that 
MOA 139/2014 and MOT 46/2013  are "laws, regulations and requirements "2345 and that they 
undoubtedly affect the inte rnal sale and use of imported bovine meat and offal.2346 According to 
New Zealand, the Indonesian regulations affect the "use" of animals and animal products by 
explicitly prescribing the use to which imported bovine meat and offal may be put. These uses are 
limited to those listed in the relevant regulations, namely use in industry, hotels, restaurant, 
catering and other special needs. In addition, New Zealand argues, Indonesian regulations also 
affect the internal sale and offering for sale of imported bovin e meat and offal because imported 
                                                
2339 New Zealand's second written submission, para. 262.  
2340 Indonesia's second written submission, para. 276.  
2341Appellate Body Report, Australia – Salmon , para. 223 (referring to Article 21.1 of the DSU).  
2342 New Zealand's first written su bmission, para. 398. 
2343 New Zealand refers to Article 32 of MOA 139/2014 (Exhibit JE -26) and Article 17 of MOT 46/2013 
(Exhibit JE -18). 
2344 New Zealand's first written submission, para. 400.  
2345 New Zealand's first written submission, para. 401.  
2346 New Zealand's  first written submission, para. 402.  WT/DS477/R • WT/DS478/R  
 
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  bovine meat and offal cannot be sold directly to consumers, at either modern markets (such as 
supermarkets or hypermarkets) or traditional markets (such as wet markets, small shops or stalls, 
or street carts).2347  
7.842.   New Zealan d further argues that the measures accord less favourable treatment to 
imported products than "like" domestic products. New Zealand recalls that an analysis of 
"treatment no less favourable " requires an examination of the "design, structure, and expected 
operation of the measure " to discern its implications on the conditions of competition between 
imported and like domestic products.2348 New Zealand contends that Measure  14 formally treats 
imported bovine meat and offal differently from their domestic equivale nts because domestic 
bovine meat and offal are not restricted in the use to which they may be put in the Indonesian 
domestic market or to certain points of sale.2349 New Zealand thus argues that the Indonesian 
regulations drastically reduce the "commercial op portunity to reach " consumers in an analogous 
fashion to the dual retail system in Korea  – Various Measures on Beef .2350 New Zealand concludes 
that Indonesia’s formally different treatment for like imported and domestic animals and animal 
products therefore a ffects the conditions of competition to the detriment of imported products and 
accords treatment that is "less favourable " to imported animals and animal products.2351 
New Zealand further submits that it is not aware of, and Indonesia has not introduced evide nce of, 
any equivalent restrictions that are applicable to like domestic products.2352 New Zealand contends 
that the treatment accorded to imported bovine meat and offal is both formally different to that 
accorded to Indonesian bovine meat and offal, and less  favourable, as it prevents the sale of 
imported product in outlets where domestic beef is permitted to be sold.2353 
7.843.   New Zealand further argues that Indonesia fails to address the prohibition on imports of 
bovine meat and offal products for sale in "modern ma rkets" (such as supermarkets).2354 New 
Zealand submits that Indonesia only attempts to rebut its arguments regarding the prohibition on 
sale of meat products in traditional markets.2355 New Zealand concludes that Indonesia has not 
rebutted the prima facie  case m ade by N ew Zealand that the prohibition  on the use, sale and 
distribution of imported bovine meat and offal is inconsistent with Article III:4 of the GATT.2356 
7.5.3.1.2   Indonesia  
7.844.   With respect to New Zealand's alleged claim that the restriction from sale in traditional , 
open-air Indonesian market, accords less favourable treatment than like domestic products, 
Indonesia responds that this requirement applies uniformly to imports and domestic products. 
Indonesia further contends that Measure  14 does not accord less favour able treatment to imports 
than like domestic products within the meaning of Article III:4.2357 
7.5.3.2   Analysis by the Panel  
7.845.   We recall that in Section  7.2.18.3 above , we found that Measure  14 is inconsistent with 
Article  XI:1 of the GA TT 1994 because, by virtue of its design, architecture and revealing 
structure, it constitutes a restriction having a limiting effect on importation . We also found that 
Indonesia has failed to demonstrate that Measure  14 is justified under Articles  XX(a) a nd (b) of the 
GATT  1994. We further recall that "[a] panel has to address those claims on which 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' ".2358 The Panel considers 
that its findings pertaining to the inconsistency of Measure  14 and the absence of justification 
under Articles XX (a) and (b) of the GATT  1994 ensures the effective resolution of this dispute. 
                                                
2347 New Zealand's first written submission, para. 403.  
2348 New Zealand's first written submission, para. 404 (referring to Appellate Body Report, Thailand – 
Cigarettes (Philippines),  para. 129).  
2349 New Zealand's first writt en submission, para. 405 (referring to  Article 17 of MOT 46/2013, 
Exhibit  JE-18 and Article 32 of MOA 139/2014, Exhib it JE-26). 
2350 New Zealand's first written submission, paras. 404 -406. 
2351 New Zealand's first written submission, para. 407.  
2352 New Zealand's s econd written submission, para. 129.  
2353 New Zealand's second written submission, para. 130.  
2354 New Zealand's second written submission, para. 131.  
2355 New Zealand's second written submission, para. 132.  
2356 New Zealand's second written submission, para. 133.  
2357 Indonesia's first written submission, para. 188.  
2358 Appellate Body Report, Australia – Salmon , para. 223 (referring to Article 21.1 of the DSU).  WT/DS477/R • WT/DS478/R  
 
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  Accordingly, the Panel considers  that it is not required to continue its analysis and make specific 
findings on the consistency of Measure  14 with Article III:4 of the GATT 1994 . 
7.846.   Accordingly, the Panel declines to rule on the consistency of Measure  14 with Article  III:4 
of the GATT  1994.  
7.5.4   Whether Measure  15 (Domestic purchase requirement for beef) is inconsistent 
with Article  III:4 of the GATT 1994  
7.5.4.1   Arguments of the Parties  
7.5.4.1.1   New Zea land 
7.847.   New Zealand claims that Measure  15, insofar as it is considered by the Panel to be an 
internal measure, is contrary to Article  III:4 of the GATT  1994.2359 Because Measure  15 is based 
exclusively on a product’s origin, as, by its design, it requires domes tically produced beef to be 
purchased in order to obtain the right to import beef from elsewhere2360, beef produced in 
Indonesia is "like" beef produced elsewhere for the purposes of Article III:4 of the GATT.2361 
New Zealand further argues that MOA 139/2014 is a "law, regulation, or requirement " in the sense 
of Article  III:4 of the GATT  1994.2362 In addition, New Zealand maintains that the domestic 
purchase requirement "affects " the "internal sale, purchase, or use " of imported products within 
the meaning of Articl e III:42363 because it incentivises the purchase of domestically produced beef 
and thereby "affects " the "internal sale, purchase, or use " of beef within Indonesia. Importers are 
not free to purchase imported products in line with their own commercial conside rations. Instead, 
it explains, their purchasing decisions in respect of imported and domestically produced beef are 
distorted in favour of domestically produced products.2364 
7.848.   New Zealand argues that Measure  15 accords less favourable treatment to imported 
products than the treatment granted to like domestic products. In reference to the Appellate Body 
Report on Korea – Various Measures on Beef , New Zealand maintains that the domestic purchase 
requirement modifies the conditions of competition in the relevant m arket to the detriment of 
imported products by according an advantage to the purchase of like domestically produced 
products that is not accorded to imported product. Specifically, it explains, as a consequence of 
the domestic purchase requirement, the pur chase of domestically produced beef provides 
importers with the ability to import beef products through the granting of MOA Recommendations 
which importers would be unable to obtain in the absence of demonstrating compliance with the 
domestic purchase requ irement. In its view, by definition, the purchase of imported products does 
not confer the same advantage.2365 In response to Indonesia's argument whereby Measure  15 is 
not inconsistent with Article  III:4 because "it has never been used to prevent the issuanc e of an 
import licence ", New Zealand contends that this is irrelevant for the purpose of Article III:4.2366 
New Zealand further submits that Measure  15 is analogous to the requirement to purchase 
domestically produced rice considered by the panel in Turkey  – Rice2367 and to the local content 
requirement in Argentina  – Import Measures .2368 
7.5.4.1.2   Indonesia  
7.849.   Indonesia asserts that New Zealand has failed to establish a prima facie  case that 
Indonesia's import licensing procedures are inconsistent with Article III:4 of the GATT . Indonesia 
                                                
2359 New Zealand's first written submission, para. 387.  
2360 New Zealand's first written submission, para. 389 (referri ng to Panel Report Argentina – Import 
Measures , paras.  6.274 -6.276).  
2361 New Zealand's first written submission, para. 389.  
2362 New Zealand's first written submission, para. 390.  
2363 New Zealand's first written submission, para. 391.  
2364 New Zealand's first writte n submission, para. 393.  
2365 New Zealand's first written submission, para. 394.  
2366 New Zealand's second written submission, paras. 152 -154. 
2367 New Zealand's first written submission, para. 395 (referring to Panel Report, Turkey – Rice, 
para. 7.234 ). 
2368 New Zeal and's first written submission, para. 395 (referring to Panel Report, Argentina – Import 
Measures , paras. 6.292 and 6.294 ). WT/DS477/R • WT/DS478/R  
 
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  argues that the record demonstrates that the domestic purchase requirement for animal products 
has never been used to prevent the issuance of an import licence.2369 
7.5.4.2   Analysis by the Panel  
7.850.   We recall that in  Section 7.2.19.3 above , we found that Measure 15 is inconsistent with 
Article  XI:1 of the GATT 1994 because, by virtue of its design, architecture and revealing 
structure, it constitutes a restriction having a limiting effect on importation . We also found that 
Indon esia has failed to demonstrate that Measure  15 is justified under Article XX(b) of the 
GATT  1994. We further recall that "[a] panel has to address those claims on which a finding is 
necessary in order to enable the DSB to make sufficiently precise recommen dations 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' ".2370 The Panel considers 
that its findings pertaining to the incon sistency of Measure  15 and the absence of justification 
under Article XX(b) of the GATT 1994 ensures the effective resolution of this dispute. Accordingly, 
the Panel considers  that it is not required to continue its analysis and make specific findings on t he 
consistency of Measure  15 with Article III:4 of the GATT 1994.   
7.851.   Accordingly, the Panel declines to rule on the consistency of Measure  15 with Article  III:4 
of the GATT  1994.  
7.6  Claims under the Import Licensing Agreement  
7.6.1   Introduction  
7.852.   The co -complainants ha ve claimed that, to the extent that the Panel finds that 
Measures  1 and 11 (Limited application windows and validity periods) are non -automatic licensing 
procedures, they are inconsistent with Article  3.2 of the Import Licensing Agreement.2371 In their 
panel requests, the co -complainants have also claimed that, t o the extent that  Indonesia 's import 
licensing regime falls within the scope of Article 2 of the Import Licensing Agreement , these 
measures are also inconsistent with Article  2.2(a) of the Import Licen sing Agreement.2372 Unlike 
with their claims under Article  3.2 of the Import Licensing Agreement, the co -complainants have 
not provide d any supporting argumentation  in relation to their claims under Article  2.2(a) of the 
Import Licensing Agreement . Accordingl y, in the absence of any argumentation, we find that the 
United States and New Zealand have failed to make a prima facie  case of inconsistency of 
Measures  1 and 11 with Article  2.2(a) of the Import Licensing Agreement.  
7.853.   We shall therefore only examine the co-complainants' claims under Article  3.2 of the 
Import Licensing Agreement.  In this respect, w e note that both co -complainants have presented 
arguments jointly for both measures. Indonesia has also followed that approach in its response. 
We shall therefor e follow the same approach in our analysis.  
7.6.2   Whether Measures  1 and 11 (Limited application windows and validity periods) 
are inconsistent with Article  3.2 of the Import Licensing Agreement  
7.6.2.1   Arguments of the Parties  
7.6.2.1.1   New Zealand  
7.854.   New Zealand claims that the l imited application windows and validity periods are non -
automatic import licensing procedures inconsistent with Article 3.2 of the Import Licensing 
Agreement.2373 New Zealand submits that these Measures are non -automatic licensing procedures, 
because applicat ions for MOA Recommendations and Import Approvals may only be applied for 
and granted during limited time periods, and thus cannot be submitted on any working day prior 
to customs clearance; and the administration of the licensing scheme through the imposi tion of 
                                                
2369 Indonesia's second written submission, para. 275.  
2370 Appellate Body Report, Australia – Salmon , para. 223 (referring to Article 21. 1 of the DSU).  
2371 New Zealand 's first written submission, para. 4 21; United States ' first written submission, 
para. 384. 
2372 New Zealand's panel request, fns.  5 and 8; United States' panel request, fns.  5 and 8.  
2373 New Zealand 's first written submission, para . 426; opening statement  at the second substantive 
meeting of the Panel, para.  17. WT/DS477/R • WT/DS478/R  
 
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  limited application windows and validity periods has a restricting effect on imports.2374 
New Zealand further argues that Indonesia's contentions regarding the automaticity of its licensing 
regime are inaccurate because the Indonesian licensing regime  does not satisfy the requirements 
of an "automatic " import licensing procedure within the meaning of Article 2.1 of the Import 
Licensing Agreement.2375  
7.855.   New Zealand notes that the first sentence of Article 3.2 provides that non -automatic 
licensing shall not have additional trade restrictive or distortive effects beyond those caused by the 
imposition of the restriction. For New Zealand, in order to determine whether the relevant import 
licensing administrative procedures have additional trade -restrictive or di stortive effects, it is 
necessary to identify the underlying "measure " that is implemented through these procedures. 
New Zealand argues that there is, however, no legitimate underlying measure implemented by 
Indonesia through the limited application window s and validity periods. New Zealand submits that 
the trade -restrictive and distortive effects resulting from those requirements are additional to the 
underlying restriction and therefore inconsistent with Article 3.2 of the Import Licensing 
Agreement.2376 New Zealand contends that importers are prevented from obtaining import licences 
outside the limited application windows and that this results in a decline in imports at the start of 
each validity period due to the delay between the issuance of Import Approva ls and the processing 
and shipment to Indonesia. New Zealand adds that this also disrupts imports at the end of each 
validity period because importers do not wish shipping or other delays to result in products arriving 
after the end of the validity period of the licence, which could lead to sanctions being implemented 
against the importer.2377 New Zealand argues that, because these import licensing procedures are 
not used to implement an underlying substantive measure, any trade -restrictive or distortive effec t 
will necessarily be "additional " for the purposes of Article 3.2. New Zealand further submits that, 
as such, the measures are inconsistent with the first sentence of Article 3.2 of the Import 
Licensing Agreement.2378  
7.856.   New Zealand adds that the second senten ce of Article 3.2 provides that "non-automatic 
licensing procedures shall correspond in scope and duration to the measure they are used to 
implement, and shall be no more administratively burdensome than absolutely necessary to 
administer the measure ". According to New Zealand, the limited application windows and validity 
periods for MOA Recommendations and Import Approvals are not used to implement any 
legitimate underlying measure, and accordingly any administrative burden imposed by these 
requirements is  also inconsistent with the second sentence of Article 3.2.2379 New Zealand 
contends that MOA Recommendations and Import Approvals must be applied for during limited 
time periods and are valid for three or six months. New Zealand argues that it has demonstrat ed 
that compliance with each of these requirements is extremely burdensome for importers. New 
Zealand asserts that such procedures do not meet the standards of being no more burdensome 
than "absolutely necessary " as required under Article 3.2.2380 New Zealand  concludes that the 
limited application windows and periods for validity of the MOA Recommendations and Import 
Approvals for animals, animal products and horticultural products are non -automatic licensing 
procedures inconsistent with Article 3.2 of the Imp ort Licensing Agreement.2381 
7.857.   Referring to Indonesia's reliance upon Article 1.6 of the Import Licensing Agreement in 
support of its contention that its licensing procedures are "automatic ", New Zealand submits that it 
understands Indonesia's argument to be th at, in order to give  effect to Article 1.6, Article  2.2(a)(ii) 
of the Import Licensing Agreement must be read in a way whereby "applications for licenses [need 
not] be submitted on any working day ".2382 New Zealand contends, however, that Indonesia's 
novel in terpretation of Article 2.2(a)(ii) takes Article 1.6 out of context and is not supported by the 
words of Article 2.2.2383 New Zealand asserts that Article 1.6 acknowledges only that there may be 
circumstances where closing periods are permissible as part of a n otherwise WTO -consistent 
import licensing regime. New Zealand observes that for example, in order for a WTO -consistent 
                                                
2374 New Zealand 's first written submission, para. 4 25; opening statement  at the second substantive 
meeting of the Panel,  para. 21.  
2375 New Zealand 's second wr itten submission, p ara. 68; response to Panel question No.  8. 
2376 New Zealand 's first written submission, paras. 426 -427; opening statement  at the second 
substantive meeting of the Panel,  para. 22.  
2377 New Zealand 's first written submission, para. 429; second written submission,  para. 69.  
2378 New Zealand 's first written submission, para. 431.  
2379 New Zealand 's first written submission, para. 432.  
2380 New Zealand 's first written submission, para. 433.  
2381 New Zealand 's first written submission, para. 434.  
2382 New Zealand 's opening statement  at the second substantive meeting of the Panel, para. 18 . 
2383 New Zealand 's opening statement  at the second substantive meeting of the Panel, para. 19.  WT/DS477/R • WT/DS478/R  
 
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  tariff rate quota (TRQ) to be administered, it may in some cases be necessary for applications to 
be subject to a closing date in order  to allocate the TRQ between applicants. New Zealand's notes 
that such a requirement would fail to meet the requirements of "automatic licensing " set out in 
Article 2.1 (because, inter alia , it would not permit the submission of applications on "any workin g 
day"). However, according to New Zealand, this requirement may still be permissible under 
Article  3.2 as a non -automatic licensing procedure provided that it does not have trade -restrictive 
or distortive effects additional to those caused by the impositi on of the underlying TRQ.2384 
7.6.2.1.2   United States  
7.858.   The United States claims that the limited application windows and validity periods are non -
automatic import licensing requirements inconsistent with Article 3.2 of the Agreement on Import 
Licensing.2385 For the United States, the application for, and receipt of, MOA Recommendations and 
Import Approvals fall within the definition of "import licensing " set out in Article 1.1 of the Import 
Licensing Agreement.2386 The United States contends that Article 3.1 defines non -automa tic import 
licensing procedures in the negative, as "import licensing not falling within the definition contained 
in paragraph 1 of Article 2 " and that Article 2.1 defines "automatic import licensing " as "import 
licensing where approval of the application is granted in all cases, and which is in accordance with 
the requirements of paragraph 2(a) ". Paragraph 2(a), in turn, provides that automatic licensing 
procedures "shall not be administered in such a manner as to have restricting effects on imports ", 
and that procedures shall be deemed to have such trade -restricting effects "unless, inter alia…(ii) 
applications for licences may be submitted on any working day prior to the customs clearance of 
the goods ".2387 The United States asserts that the application wind ows and validity period s fail to 
qualify as "automatic import licensing " and, thus, are classified as "non-automatic import 
licensing ". The United States submits that, applications for MOA Recommendations and Import 
Approvals cannot be submitted on any wor king day prior to the customs clearance of the goods; 
applications may be submitted only during limited applications windows during the month prior to 
the start of an import validity period, i.e. in December or June for horticultural products and in 
Decemb er, March, June, or September, for animals and animal products.2388 The United States 
adds that Indonesia's assertions that its import licensing regimes are "automatic " and 
"transparent " are based on an incorrect legal premise and are factually inaccurate.2389 The United 
States contends that regardless of the number of applications approved, or the lack of discretion 
on the part of Indonesian officials in reviewing these applications, such measures cannot be 
considered "automatic " in any sense of the word.2390 
7.859.   The U nited States adds that the application windows and validity periods have "restricting " 
effects on imports.2391 The United States contends that an evaluation of an import licensing 
procedure under the first sentence of Article 3.2 requires identification of th e "restriction " being 
implemented by the import licensing procedures.  The United States argues, however, that the 
legal instrument s establishing the application windows and validity periods contain no description 
of or reference to a "restriction " separate  from the licensing procedures themselves. The United 
States submits that, on the contrary, MOT  46/2013 suggests only that the purpose of the import 
licensing regime for animals and animal products is "to improve consumer protection, preserve 
natural resou rces, provide business certainty, transparency, and simplify the licensing process and 
the administration of imports "; and, similarly, MOT 16/2013, as amended, which regulates 
horticultural products, states that its purpose is to "protect consumers, promot e business certainty 
and transparency, and simplify the licensing process and the administration of imports ".2392 The 
United States adds that when Indonesia notified MOT 46/2013 to the Committee on Import 
Licensing, the notices did not identify any measure be ing implemented through the import 
licensing procedure. The United States asserts that Indonesia's notification for MOT 16/2013 
indicated no administrative purpose for the regulation, and the notification for MOT 46/2013 stated 
                                                
2384 New Zealand 's opening statement  at the second substantive meeting of the Panel,  para. 20.  
2385 United Stat es' first written submission, paras. 388, 394; opening statement at the second 
substantive meeting, para. 12; response to Panel question No.  8. 
2386 United States ' first written submission, para. 385.  
2387 United States ' first written submission, para. 386; Unit ed States ' opening statement at the second 
substantive meeting, para. 9.  
2388 United States ' first written submission, para. 387.  
2389 United States ' response to Panel question No.  8, paras. 42 -43 and  46.  
2390 United States ' opening statement at the second substan tive meeting, para. 12; response to Panel 
question No.  8. 
2391 United States ' first written submission, para. 387.  
2392 United States ' first written submission, paras. 388 -389. WT/DS477/R • WT/DS478/R  
 
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  that the administrative purp ose was "to establish healthy trade, conductive business environment 
and orderly import and administration ".2393 
7.860.   The United States submits that to the extent the Panel were to consider the requirements 
non-automatic import licensing procedures, however, the r estrictive effects of these requirements 
must be considered "additional " "trade -restrictive or –distortive effects " under the first sentence of 
Article 3.2.2394 The United States contends that these restrictive effects are considerable: 
(1) importers cannot a pply for additional or different import permits outside the limited application 
windows; (2)  imports are restricted at the beginning of each validity period because exporters 
cannot begin conducting the necessary health inspections and shipping the product  until after 
Import Approvals are issued for each period; and (3)  imports are restricted at the end of each 
validity period as importers must stop shipping several weeks prior to the end of each of the 
period s to ensure that their goods arrive in Indonesia  and clear customs before the period's last 
day.2395 
7.861.   The United States argues that the analysis under the second sentence of Article 3.2 also 
must begin with identification of the "measure " that the licensing regime is implementing. The 
United States asserts,  however, that for the reasons outlined above, the application windows and 
validity periods requirements do not implement any identifiable measure.2396 The United  States 
adds that because the application windows and validity period requirements do not impleme nt any 
underlying "measure ", Article 3.2 does not reach those requirements. The United States submits 
that to the extent that the Panel were to consider the requirements non -automatic import licensing 
procedures, however, the application windows and validi ty periods must be considered "more 
administratively burdensome than absolutely necessary to administer the measure ".2397 
7.862.   The United States submits that Indonesia's argument is based on the assumption that its 
import licensing measures are "import licensing p rocedures " within the meaning of the Import 
Licensing Agreement which the United States argues they are not. The United States argues that 
the Import Licensing Agreement distinguishes between "procedures " used to operate import 
licensing regimes, which are  covered by the Import Licensing Agreement, and the substantive 
rules themselves.2398 The United States asserts that Indonesia's import licensing regimes include 
procedures for administering the regimes, i.e. the procedures for applying for recommendations 
and Import Approvals, but the measures challenged by the co -complainants are much broader, 
encompassing substantive rules and requirements, including restrictions and prohibition on 
importations. The United States adds that its challenge to Indonesia's regim es is directed against 
these substantive restrictions and prohibitions.2399 The United States also contends that the 
interpretation proposed by Indonesia would enable a country to impose any requirement either on 
import licensing procedures or on importation itself, no matter how trade -restrictive and  mean 
that, as long as all applications that meet the legal requirements are ultimately granted , the 
regime would be considered automatic.2400 
7.6.2.1.3   Indonesia  
7.863.   Indonesia argues that the complainants have failed to establish  a prima facie  case that its 
import licence application procedures are inconsistent with Indonesia's obligations under 
Article  3.2 of the Import Licensing Agreement. Indonesia argues that its import licensing regime is 
automatic ( i.e. not "discretionary ") and is therefore outside the scope of Article 3 of the Import 
Licensing Agreement.2401 Indonesia submits that the complainants have failed to demonstrate that 
any importer that has met all of the administrative requirements of Indonesia's import licensing 
regime has ever been denied an import licence. Indonesia contends that, on the contrary, any 
importer who fulfils the clearly -defined legal requirements is automatically granted an import 
licence by Indonesia's authorities.2402 Indonesia adds that there is no di scretion granted to the 
agency under either regulation to reject an application that has met all the legal requirements. 
                                                
2393 United States ' first written submission, para. 390.  
2394 United States ' first written submission, para. 390.  
2395 United States ' first written submission, para. 391.  
2396 United States ' first written submission, para. 392.  
2397 United States ' first written submission, paras. 393.  
2398 United States ' opening statement at the second substantive meeting , para. 10. 
2399 United States ' opening statement at the second substantive meeting, para. 11.  
2400 United States ' response to Panel question No.  8, paras. 48 -49. 
2401 Indonesia 's first written submission, para. 175; second written submission, paras. 44 -46 and  66; 
opening statement at the second substantive meeting , para s. 20 and 23. 
2402 Indonesia 's first written submission, para. 175.  WT/DS477/R • WT/DS478/R  
 
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  Indonesia submits that : (i) any person, firm or institution which fulfils the legal requirements of 
the importing Member for engaging i n import operations involving products subject to automatic 
licensing is equally eligible to apply for and to obtain import licences; (ii) applications for licences 
may be submitted on any working day prior to the customs clearance of the goods; and (iii) 
applications for licences when submitted in appropriate and complete form are approved 
immediately on receipt, to the extent administratively feasi ble, but within a maximum of 
10 working days.2403  
7.864.   Indonesia asserts that with respect to the timing of ap plicat ions, Article 8(1) of 
MOT 71/2015 for certain horticultural products and Article 11(3) of MOT 46/2013 for certain 
animals and animal products, Import Approvals must be granted within 2 working days. In 
addition, Indonesia submits that pursuant to Article 1 2(1) of MOA 86/2013 for certain horticultural 
products and Article 25 of MOA 139/2014 for certain animals and animal products RIPH/MOA -
Recommendations must be granted within 7 working days.2404 Indonesia further argues that, in 
fact, during 2013 -2015, no appl ications that fulfilled all the legal requirements were rejected by 
the regulating authority.2405 Indonesia refers to the table submitted in its response to Panel 
Question no. 8 and argues that the table clearly shows that almost all of RIPH/MOA 
Recommendatio ns or Import Approval applications were granted with the exception in 2013 when 
"there was 1 IA out of 555 IA applications for horticultural products and 8 IA out of 1440 IAs 
applications for animals and animal products that were rejected ".2406 Indonesia argu es that MOT 
rejected the Import Approval applications listed as "rejected " because the importer submitted 
incomplete and/or incorrect applications. Indonesia asserts that in 2014, 8 RIPH applications were 
rejected because of incorrect applications.2407 
7.865.   Indone sia refers to Article 1(1) of the Import Licensing Agreement and argues that its 
import licensing for certain horticultural products and for certain animals and animal products 
qualifies as administrative procedures used for the operation of import licensi ng regimes requiring 
the submission of an application and other supporting documentation to MOA and MOT as well as 
other relevant administrative bodies as a prior condition for importation of the relevant products 
into the customs territory of Indonesia.2408 Indonesia notes that without an Import Appr oval from 
the Ministry of Trade  and an RIPH for certain horticultural products and MOA Recommendation for 
certain animals and animal products, an importer cannot import such products into Indonesia. 
Indonesia cont ends that whether Indonesia's import licensing requirements for certain horticultural 
products and certain animals and animal products amount to "import licensing " within the meaning 
of Article 1(1) has not been at issue in this case.2409 
7.866.   Indonesia contends t hat its import licensing regime is not trade restrictive because it is 
applied in a manner that does not produce trade -restrictive effects.2410 Hence, for Indonesia, its 
licensing regime is expressly permitted by Article 2.2 of the Import Licensing Agreement.2411 
Indonesia submits that in the present case there is no causal link between the implementation of 
the import licensing regime and the declined market share of the co -complainants which would be 
expected in the case of a trade -restrictive measure.2412  
                                                
2403 Indonesia 's second written submission, para. 52.  
2404 Indonesia 's second written submission, para. 54;  response to Panel question No.  77. 
2405 Indonesia asserts that, for example, in 2015, there were 271 applications for RIPHs. Indonesia 
further asserts that all applications fulfilled the legal requirements and the Ministry of Agriculture issued RIPHs 
for all 271 applications. According to Ind onesia, in the same year, there were 161 applications for the Ministry 
of Trade for Import Approvals for horticultural products. Indonesia asserts that the Ministry of Trade issued 161 
Import Approvals because all applications fulfilled the legal requireme nts provided by the relevant regulations. 
Regarding animals and animal products, in 2015 there were 239 applications for Import Approvals, and the 
Ministry of Trade issued 239 Import Approvals. In addition, Indonesia argues that in 2015 there were 1, 126 
applications for Import Approvals related to animal products, all 1 ,126 applications fulfilled all the legal 
requirements provided by the relevant regulations, and the Ministry of Trade accordingly issued Import 
Approvals for all 1, 126 appl ications. Indonesi a's first written submission, para. 176 ; second written submission, 
paras. 47, 50; opening statement at the second substantive meeting, para. 18.  
2406 Indonesia 's second written submission, paras. 48 -49. 
2407 Indonesia 's second written submission, para. 49.  
2408 Indonesia 's response to Panel question No.  30. 
2409 Indonesia 's second written submission, paras. 42 -43. 
2410 Indonesia 's opening statement at the second substantive meeting, para. 19.  
2411 Indonesia 's first written submission, para. 177.  
2412 Indonesia argues that, in fact, the complainants ' market share increased. According to Indonesia, in 
relation to fresh horticultural  products, market share of US for orange in 2012 was 11%, in 2013 it was 15% 
and in 2014 was 22%. Indonesia adds that for processed horticultural  products, the US market share for frozen 
sliced potato in 2012 was 33%, in 2013 it was 48%, and in 2014 it was 49%. In addition, Indonesia asserts WT/DS477/R • WT/DS478/R  
 
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  7.867.   Indone sia submits that the second sentence of Article 3.2 of the Import Licensing 
Agreement provides that non -automatic licensing procedures shall correspond in scope and 
duration to the measure they are used to implement, and shall be no more administratively 
burdensome than absolutely necessary to administer the measure. Indonesia contends that its 
import licensing regime for horticultural products, animals, and animal products has a different 
scope and duration depending on whether the importers use the import ed products for raw 
materials or if the importers are traders. Specifically, Indonesia adds that, for horticulture 
products, there are different provisions for importing fresh horticulture products, processed 
horticulture products, or chillies  and shallot.  Similarly, Indonesia asserts that for animals and 
animal products there are different categories with different provisions and that the duration of 
validity for each import licence can be different depending on the products. Indonesia concludes 
that its i mport licensing procedures correspond in scope and duration to the measure they are 
used to implement2413 and thus the complainants' claim arising under Article 3.2 of the Import 
Licensing Agreement must fail.2414  
7.868.   Indonesia contends that the co -complainants' in terpretation of Article 2(2)(a)(ii) of the 
Import Licensing Agreement is incorrect.2415 Indonesia contends that the application windows to 
apply for Import Approvals do not apply for fresh chilli and shallot and processed horticultural 
products, as well as fo r fresh horticultural products imported to be used as raw materials for API -P 
holders. Indonesia asserts that the application window to apply for RIPHs and Import Approvals for 
importers having API -U for certain fresh horticultural products is regulated by  Article 11 of 
MOT 71/2015 and Article 13 of MOA 86/2013. Indonesia further asserts that under Article 11 of 
MOT 71/2015 importers having API -U may submit their application for Import Approval of certain 
fresh horticultural products one month before the be ginning of the period (in December of the 
previous year for the January -June period and in June for the July -December period). Indonesia 
adds that, under Article 13 of MOA 86/2013, an importer may submit an RIPH application in the 
beginning of November of the preceding year for the January -June period and in the beginning of 
May of the same year for the July -December period. Indonesia submits that accordingly, the 
application window is opened two months before the period starts.2416 Indonesia further argues 
that, in relation to animals and animal products, pursuant to MOT 46/2013, the application window 
for applying for Import Approvals ope ns one month prior to the start  of the validity periods and is 
only applicable for products listed under Annex I. Indonesia  adds that there is no application 
window for products listed under Annex II.2417 Indonesia submits that according to the 
complainant's interpretation of Article 2(2)(a)(ii) of the Import Licensing Agreement, an import 
licence application must be accepted on any working day prior to customs clearance, with 
indefinite time. For example, if an importer plans to import US apples in 2025, the importer must 
be allowed to submit his application for an RIPH and an Import Approval in 2016, and the 
Ministries of Agricu lture and Trade must accept the applications and proc ess them within a 
maximum of 10  working days in order not to violate Article 2(2)(a(ii) and (iii) of the Import 
Licensing Agreement.2418 Indonesia disagrees with this interpretation which it believes is bro ad and 
incorrect.2419 
7.869.   According to Indonesia, the ordinary meaning of "prior to " based on Oxford Dictionaries is 
before a particular time or event. Indonesia argues that this ordinary meaning does not suggest 
that "prior to " can be interpreted in indefinite t ime before a particular time or event.2420 Therefore, 
Indonesia submits that this leaves the interpretative question open. Indonesia finds support in the 
Appellate Body findings in Canada – Aircraft , EC – Asbestos  and Japan  – Alcoholic Beverages II2421, 
where th e Appellate Body suggested that the ordinary meaning of the term cannot be determined 
outside the context in which the term is used and without consideration of the object and purpose 
of the agreement at issue.2422 Indonesia asserts that re garding the context  and in line  with the 
object and purpose of the Import Licensing Agreement, a treaty interpreter must read all 
                                                                                                                                                  
that for other grapefruit juice the US market share in 2012 was 11%, in 2013 it was 56% and in 2014 it was 
85%. I ndonesia 's first written submission, para. 178.  
2413 Indonesia 's first written submission, para. 179.  
2414 Indonesia 's first written submission, para. 180.  
2415 Indonesia 's second written submission, paras. 55 -56. 
2416 Indonesia 's second written submission, para. 57.  
2417 Indonesia 's second written submission, para. 58.  
2418 Indonesia 's opening statement at the second substantive meeting, para. 21.  
2419 Indonesia 's second written submission, para. 59.  
2420 Indonesia 's second written submission, paras. 60 -61. 
2421 Indonesia 's second w ritten submission, para. 62 (referring to Appellate Body Reports , US – 
Gasoline , para. 16, Japan – Alcoholic Beverages II , para. 104).  
2422 Indonesia 's second written submission, para. 62.  WT/DS477/R • WT/DS478/R  
 
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  applicable provisions of a treaty in a way that gives meaning to all of them harmoniously.2423 
Indonesia submits that the reading of Article 2(2)(a) (ii) of the Import Licensing Agreement must 
be seen in conjunction with Article 1(6).2424 Indonesia argues that this provision clearly 
acknowledges that an application window for import licensing application procedures is allowed 
under the Import Licensing Ag reement.2425 Indonesia adds tha t it allows 15 working days 
(21 calendar days) for the application window for RIPHs for horticultural products, a one -month 
application window for MOA -Recommendations for animal products, and a one -month application 
window for I mport Approvals. Indonesia further asserts that all applications for RIPHs, MOA 
Recommendations or Import Approvals can be submitted online at INATRADE and  REIPPT, as part 
of Indonesia National Single Window ( "INSW "). Indonesia contends that this is alread y in line with 
Article 1(6) of the Import Licensing Agreement.2426   
7.6.2.2   Analysis by the Panel  
7.870.   We recall that, in Section s 7.2.5.3 above  and 7.2.15.3 above , we found that Measures  1 
and 11 are incons istent with Article XI:1 of the GATT  1994 because , by virtue of their design, 
architecture and revealing structure, they constitute a restriction having a limiting effect on 
importation . We further recall that "[a] panel has to address those claims on whic h 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' ".2427 The Panel considers 
that its findings pertaining to the inconsistency of Measures  1 and 11 with Article  XI:1 of the 
GATT  1994 ensures the effective resolution of this dispute . Accordingly, the Panel considers that it 
is not requ ired to continue its analysis and make specific findings on the consistency of Measures  1 
and 11 with Article 3.2 of the Import Licensing Agreement.  
7.871.   Accordingly, the Panel declines to rule on  the consistency of Measures  1 and  11 with Article 
3.2 of Import Licensing Agreement . 
                                                
2423 Indonesia 's second written submission, para. 63.  
2424 Indonesia 's secon d written submission, para. 64.  
2425 Indonesia 's opening statement at the second substantive meeting, para. 22.  
2426 Indonesia 's second written submission, para. 65.  
2427 Appellate Body Report, Australia – Salmon , para. 223 (referring to A rticle 21.1  of the DSU) . WT/DS477/R • WT/DS478/R  
 
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  8  CONCLUSIONS AND RECO MMENDATION(S)  
8.1.  As described in greater detail above, the Panel finds that: 
a. In respect of Indonesia's request for a preliminary ruling:  
i. Nothing in the wording of Article  6.2 of the DSU precludes a complainant from 
setting out claims in the footnotes to its panel request. Footnotes form part of the 
text of a panel request and may be relevant to the presentation of the legal basis of 
the complaint. The fact that the co -complainants have set out claims pursuant to 
Article 3.2 of the Import Licensing Agreement and Article  III:4 of the GATT  1994 
within footnotes 5, 7, 8, 12 and 14 of their panel requests does not render these 
requests inconsistent with the requirements of Article  6.2 of the DSU;  
ii. Indonesia has failed to demo nstrate that the co -complainants have not sufficiently 
identified their claims pursuant to Article  3.2 of the Import Licensing Agreement and 
Article  III:4 of the GATT  1994 because the language employed in footnotes 5, 7, 8, 
12 and 14 of their panel request s is "conditional  and ambiguous ";  
iii. Indonesia has failed to demonstrate that the co -complainants have not sufficiently 
identified their claims pursuant to Article  3.2 of the Import Licensing Agreement and 
Article  III:4 of the GATT  1994, by referring to the wording of these provisions when 
formulating the relevant claims in footnotes 5, 7, 8, 12 and 14 of the panel requests 
and by not providing a proper or sufficient explanation of how the measures at issue 
are inconsistent with Article  III:4 of the GATT  1994 or Article  3.2 of the Import 
Licensing Agreement ;  
iv. We therefore reject  Indonesia's contention that the manner in which the 
co-complainants formulated their claims pursuant to Article  3.2 of the Import 
Licensing Agreement and Article  III:4 of the GATT  1994 in their panel requests did 
not sufficiently identify their claims and thereby failed to comply with the 
requirements of Article 6.2 of the DSU ;  
v. We further find that t he fact that a co -complainant, in this case the United  States, 
has not argued a claim i ncluded in its panel request, in this case Article  III:4 of the 
GATT  1994, within its first written submission is not relevant for the purpose of 
assessing whether such a claim has been adequately identified in a panel request 
pursuant to Article  6.2 of th e DSU ;  
vi. In the light of our finding  in paragraph 8.1.a. v above , we reject Indonesia's 
contention that it suffered prejudice  as a result of the formulation of those claims. In 
our view, Indonesia  would have been on notice tha t the co -complainants were 
pursuing claims under Article 3.2 of the Import Licensing Agreement and Article  III:4 
of the GATT 1994  and hence Indonesia's due process rights  were not affected by 
virtue of the content of the panel requests ; and  
vii. Concerning Indonesia's request  that we  evaluate the consistency with Article  6.2 of 
the DSU of their first written submissions , the Panel declines to make such an 
evaluation because Article  6.2 regulates the requirements that panel requests must 
satisfy but does not spea k to the requirements of first written submissions.  
b. In respect of the co -complainants' claims under Article XI:1 of the GATT 1994:  
i. Measures  1 through 7, 9 and 11 through 17 are inconsistent with Article XI:1 of the 
GATT  1994 because, by virtue of their de sign, architecture and revealing structure, 
they constitute a restriction having a limiting effect on importation;  
ii. Measure s 8 and 10  are inconsistent with Article XI:1 of the GATT  1994 because , by 
virtue of their design, architecture and revealing structur e, they  constitutes 
prohibition on importation ; and  
iii. Measure  18 is inconsistent as such with Article XI:1 of the GATT  1994 because, by 
virtue of its design, architecture and revealing structure, it constitutes a restriction WT/DS477/R • WT/DS478/R  
 
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  having a limiting effect on impo rtation. Accordingly, the Panel declines to rule on 
whether Measure  18 is also inconsistent as applied  with Article XI:1 of the 
GATT  1994.  
c. In respect to Indonesia's defence under Article XX of the GATT 1994:  
i. Indonesia has failed to demonstrate that Measur es 1, 2 and 3 are justified under 
Article  XX(d) of the GATT  1994;  
ii. Indonesia has failed to demonstrate that Measure 4 is justified under Article XX(b) of 
the GATT  1994;  
iii. Indonesia has failed to demonstrate that Measures  5 and 6 are justified under 
Articles  XX(a), (b) and (d) of the GATT  1994;  
iv. Indonesia has failed to demonstrate that Measure 7 is justified under Article XX(b) of 
the GATT  1994;  
v. Indonesia has failed to demonstrate that Measure  8 is justified under  Article  XX(b) of 
the GATT  1994; and   
vi. Indonesia has failed to demonstrate that Measures  9 through  18 are justified under 
Article s XX(a), (b) or (d) of the GATT  1994, where appropriate.   
8.2.  Concerning the co -complainants ' claims under Article 4.2 of the Agreement on Agriculture, 
the Panel declines to rule because its findings pertaining to the inconsistency of Measures  1 
through 18 with Article  XI:1 of the GATT  1994 and the absence of justification under 
Articles  XX(a), (b) or (d) of the GATT  1994 ensure the effective resolution of this dispute.  
8.3.  With respec t to New Zealand's  claim s under Article III:4 of the GATT 1994, the Panel declines 
to rule because its findings pertaining to the inconsistency of Measures  6, 14 and 15 with 
Article  XI:1 of the GATT  1994 and the absence of justification under Articles XX(a ), (b) or (d) of 
the GATT  1994 ensure the effective resolution of this dispute.  
8.4.  Concerning the co -complainants' claims under Article 3.2 of the Import Licensing Agreement, 
the Panel declines to rule because its findings pertaining to the inconsistency of Measures  1 and 11  
with Article  XI:1 of the GATT  1994 ensure the effective resolution of this dispute.   
8.5.  The Panel further declines to rule on the United States' claims under Article III:4 of the 
GATT  1994 because, in the absence of any argumentation, the  United States has failed to make a 
prima facie  case. The Panel also declines to rule on the co-complainants' claims under 
Article  2.2(a) of the Import Licensing Agreement because, in the absence of any argumentation, 
the United States and New Zealand have failed to make a prima facie  case. 
8.6.  Under Article  3.8 of the DSU, in cases where there is infringement of the obligations assumed 
under a  covered agreement, the action is considered prima  facie to constitute a case of 
nullification or impairment of benefits u nder that agreement. Accordingly, we conclude that to the 
extent that Indonesia has acted inconsistently with Article XI:1 of the GATT  1994, it has nullified 
or impaired benefits accruing to New Zealand and the United  States under that agreement.  
8.7.  Pursuant to Article  19.1 of the DSU, having found that Indonesia acted inconsistently with its 
obligations under Article XI:1 of the GATT  1994 with respect to Measures 1 through 18 , we 
recommend  that the DSB request Indonesia  to bring its measures into conformity w ith its 
obligations under the GATT  1994.  
_________