Notice of initiation of an examination procedure concerning an obstacle to trade, within the meaning of Council Regulation (EC) No 3286/94, consisting of trade practices maintained by Canada in relation to certain geographical indications for wines

(2002/C 124/05)

On 6 December 2001, the Commission received a complaint, pursuant to Article 4 of Council Regulation (EC) No 3286/94(1) (hereinafter "the Regulation").

1. Complainant

The complaint was lodged by the Conseil Interprofessional du Vin de Bordeaux ("CIVB"). The CVIB is a trade organisation representing winegrowers amd traders in Bordeaux and was set up in 1948. The CIVB is made up of representatives of winegrowers and traders who are chosen by their respective organisations, proposed by each of the production and trader federations and appointed by the State. The CIVB represents all winegrowers and over 85 % of traders in the Bordeaux region.

CIVB is an association acting on behalf of Community enterprises within the meaning of Articles 2(6) and 4(1) of the Regulation.

2. Product

This complaint concerns wines with the geographical indication "Bordeaux" or "Médoc".

The wines under examination are classified in the combined nomenclature (CN) under the codes 2204 21 12, 2204 21 42, 2204 29 12 and 2204 29 42.

The examination which the Commission is initiating may also cover other products which appear to be affected in a similar way to the wines under investigation and in particular those in respect of which interested parties that make themselves known within the time limits mentioned below (see point 8), provide evidence that the alleged practices are applicable.

3. Subject

The complaint concerns a trade barrier allegedly caused by Canada, which adversely affects the Community exports of the products in question to the Canadian market.

The challenged Canadian practice is based on the legislation adopted by Canada to implement the Agreement on trade-related aspects of intellectual property rights (TRIPs). This Act came into force on 1 January 1996 and amended the Canadian Trade-Marks Act. It is referred to in the complaint as the C-57 Amendment.

According to the complainant, the C-57 Amendment deprives the geographical indications at issue (Bordeaux and Médoc) of a standard of protection in compliance with the protection requirements laid down by TRIPs for geographical indications for wines.

4. Allegation of obstacles to trade

The complainant claims that Canada by maintaining the abovementioned trade measure violates Articles 23(1) and (2) as well as Article 24(3) of the TRIPs.

The complaint contests Sections 11.14 and 11.15 of the C-57 Amendment, where it is stated that: "No person shall adopt in connection with a business, as a trademark or otherwise, a protected geographical indication identifying a wine in respect of a wine not originating in the territory indicated by the protected geographical indication; or a translation, in any language of the geographical indication in respect of that wine."

Canada implemented Article 23 of the TRIPs via a registration system allowing special protection to be conferred on geographical indications for wines and spirits. Nonetheless, subsections 11.18(3) and (4) of the C-57 Amendment provides that: "Nothwithstanding Sections 11.14 and 11.15 and paragraphs 12(1)(g) and (h), nothing in any of those provisions prevents the adoption, use or registration as a trademark or otherwise, in connection with a business, of the following indications; in respect of wines: ... (m) Bordeaux; ... (r) Médoc; (s) Médoc ...". Accordingly, "Bordeaux" and "Médoc" geographical indications are excluded from the special protection provided for in Section 11.14 of the C-57 Amendment.

The complainant also claims that the C-57 Amendment is in breach of the so-called "standstill obligation" provided for by Article 24(3) of TRIPs.

The complainant has provided sufficient prima-facie evidence that the contested measures are inconsistent with the obligations of Canada under the WTO Agreement, in particular with Articles 23(1), 23(2) and 24(3) of TRIPs, and that they thereby constitute an obstacle to trade within the meaning of Article 2(1) of the TBR.

5. Allegation of adverse trade effects

The complainant contends that it is suffering, and is threatened with further, adverse trade effects within the meaning of Article 2(4) of the Regulation.

The alleged obstacles to trade identified in CIVB's complaint, i.e. the qualification of "Bordeaux" and "Médoc" as generic under Canadian law, appear, to deprive the complainant of its intellectual property rights in "Bordeaux" and "Médoc" in Canada, thus causing adverse trade effects.

The adverse trade effects referred to above could have a material impact on a specific region of the Community, namely the Bordeaux reigon in France where most of the exported wine is produced.

Under such circumstances, there appears to be prima facie evidence of adverse trade effects as defined in Article 2(4) of the Regulation.

6. Community interest

A correct implementation of the TRIPs Agreement by Canada is undeniably in the interest of the Community. The protection and enforcement of these rights, and in particular of denominations of origin, is of great importance for the economy of several regions of the Community. In this connection, there is a need to examine the WTO compatibility of the Canadian trade practices concerning protection of geographical indications.

The Commission is currently negotiating an agreement with Canada on trade in wine and spirits, aimed, among other things, at improving the protection of EC denominations of origin, in particular by ending their generic usage, in that country. If successfully concluded, this agreement could represent an appropriate means to protect the Community interests in this field.

Given the above circumstances, it is considered to be in the Community's interest to initiate an examination procedure.

7. Procedure

Having decided, after consultation of the Advisory Committee established by the Regulation, that there is sufficient evidence to justify initiating an examination procedure for the purpose of considering the legal and factual issues involved, and that this is in the interest of the Community, the Commission has commenced an examination in accordance with Article 8 of the Regulation.

Interested parties may make themselves known and make known their views in writing, in particular by addressing the specific issues raised in the complaint, and by providing supporting evidence.

Furthermore, the Commission will hear parties who so request in writing when making themselves known, provided that they are a party primarily concerned by the result of the procedure.

This notice is published in accordance with Article 8(1)(a) of the Regulation.

8. Time limit

Any information relating to the matter and any requests for hearings should be sent in writing to: European Commission Directorate-General for Trade Mr Ignacio Garcia Bercero, DG Trade D/3

CHAR 9/74

B - 1049 Brussels Fax (32-2) 299 32 64.

Any such information or request for a hearing should reach the Commission not later than 30 days following the publication of this notice.

(1) Council Regulation (EC) No 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community's rights under international trade rules, in particular those established under the auspices of the World Trade Organisation (OJ L 349, 31.12.1994, p. 71), as last amended by Regulation (EC) No 356/95 (OJ L 41, 23.2.1995, p. 3).