INDONESIA – IMPORTATION OF HORTICULTURAL PRODUCTS, ANIMALS AND ANIMAL PRODUCTS REPORT OF THE PANEL
Document: REPORT OF THE PANEL
Date: 22 December 2016
Document codes: WT/DS477/R; WT/DS478/R
Complainant: New Zealand
Respondent: Indonesia
Third parties: Australia, Brazil, Canada, China, EU, India, Japan, Norway, Paraguay, Singapore, Taiwan, Argentina, South Korea, Thailand
Dispute stage: Appellate Body
Agreements cited: Art. XI:1  GATT 1994Art. 4.2  AgricultureArt. 3.2, 2.2(a)  Import LicensingArt. III:4  GATT 1994

INDONESIA – IMPORTATION OF HORTICULTURAL PRODUCTS,
ANIMALS AND ANIMAL PRODUCTS
REPORT OF THE PANEL
 •

LIST OF ANNEXES
ANNEX A
PRELIMINARY RULING OF THE PANEL
Contents Page
Annex A-1 Preliminary Ruling of the Panel A-1

ANNEX B
WORKING PROCEDURES OF THE PANEL
Contents Page
Annex B-1 Working Procedures of the Panel B-1
ANNEX C
ARGUMENTS OF THE PARTIES
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 executive 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 THIRD 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 summary 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 summary 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
 •

ANNEX E
IMPORT LICENSING PROCEDURES FOR HORTICULTURAL 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

WTO CASES CITED 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 Goods,
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 /

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/DS340/R, Add.1 and Add.2 / WT/DS342/R,
Add.1 and Add.2, adopted 12 January 2009, 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 and Corr.1 /
WT/DS398/R, Add.1 and Corr.1, adopted 22 February 2012, as modified 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
Appellate 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

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 Honduras,
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 Communities – Export Subsidies on Sugar, Complaint by
Brazil, WT/DS266/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. 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 Appellate 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 – Trademarks 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
Appellate 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

Short Title Full Case Title and Citation
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and Paper,
WT/DS44/R, adopted 22 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 States – 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/DS244/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 Report, 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 Appellate 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

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
Blouses
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

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, adopted 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

ABBREVIATIONS USED IN 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 and 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 companies 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 Tariffs 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 Number 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/PER/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 Trade 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 Certain Agricultural Products
RI Registered Importer of Horticultural Products
WT/DS477/R • WT/DS478/R

Abbreviation Description
RIPH Horticultural Products Import Recommendation ( Rekomendasi
Impor Produk Hortikultura)
SPS Agreement Agreement on Sanitary and Phytosanitary Measures
TBT Agreement Agreement on Technical Barriers to Trade
WT/DS477/R • WT/DS478/R

1 INTRODUCTION
1.1 Complaints 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 Understanding 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 (Import 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 with 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 terms of reference.3 At its meeting on 20 May 2015, the Dispute
Settlement Body (DSB) established a single panel pursuant to the requests 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 as will assist the DSB in making the recommendations or in giving
the rulings provided 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 paragraph 7 of Article 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 DSB held in the Centre William 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 Procedures of the Panel in Annex B.
WT/DS477/R • WT/DS478/R

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 Article 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 parties, 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 supported the request.12
1.12. On 20 January 2016, the Panel issued a communication where it declined Australia, Brazil,
Canada and the European Union 's joint request for enhanced third party rights in these
proceedings.
1.3.3 Request for a preliminary 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 practice 14 and in the interest of the efficiency of the proceedings, more
detailed reasons in 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 Panel'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 letter 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 for 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, para. 1.3.
WT/DS477/R • WT/DS478/R

constituted 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 resolve 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 . I t e mphasizes 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 institutions 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, capacity-building, finance,
etc.). Indonesia's Farmers Law applies to agricultural commodities 24 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
Farmers 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 products 28 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, Articles 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 Articles 31(1) to (3) of the Farmers Law, Exhibit JE-3.
WT/DS477/R • WT/DS478/R

designated entry points 29 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 points 34) 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 balancing 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 t he 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 regulates 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 halal 46 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 Articles 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

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 Panel
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 Panel 53; and (ii) MOT 46/2013, as
amended54, and MOA 139/2014, as amended 55, 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 imported 57; namely, API -U,
which is granted only to companies importing certain goods for trading purposes 58; 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 Application process and related requirements
2.11. Prior to importation, applicants must complete the following steps:

49 Article 59 of the Animal Law Amendment, 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 enactment 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, 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/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/Permentan/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 Minister 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 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 (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. 20; 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 to 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

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
Horticultural Products (RI) must be obtained 61; (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 Horticultural Products Import Recommendation (Rekomendasi Impor Produk
Hortikultura or RIPH) from the Ministry of Agriculture63,
c. Obtain an Import Approval (Surat Persetujuan Import) from the Ministry of Trade64, and
d. Undergo a technical inquiry65, carried out by a Surveyor66 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 registered, 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. Importers 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
applications may be submitted at any time electronically. 73 The documentation submitted is then
verified for completeness74, after which, an "Assessment Team"75 checks its veracity and conducts
a field inspection.76 Both the document verification and the field inspection 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 designation within the next two working days; otherwise 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 16/2013, 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 16/2013, 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 amended, Exhibit JE-10.
77 Article 8(4) of MOT 16/2013, as amended, Exhibit JE-10.
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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 electronically.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 May 85, and applications
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 shallots for consumption, RIPHs
are issued for three-month periods and 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 RIPH 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 JE-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.
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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 Technical inquiry at the port of origin
2.19. Once the Import Approval has been issued, all imports of fresh and processed horticultural
products, 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
products 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 Ministry 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 Appendix 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 electronically 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 materials 107, in a similar manner and
within identical timelines as th ose described above in paragraph 2.14 above with respect to
horticultural products. RI designations 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 system.
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.
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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 46/2013,
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 applicants 111 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 following 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 complete 121, 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 Certificate 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 139/2014, 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 amended, 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.
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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 place after the establishment of this Panel.
2.29. Concerning the g eneral importer identification , from January 2016 126, API registrations are
valid as long as importers have on-going business activities. Importers holding an API are required
to re-register at the issuing agency every five years commencing from the issuance date.127
2.30. With respect to the i mport licensing regime for horticultural products 128, 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 time 130, API-Us
wishing to import fresh horticultural product have two one -month application windows (December,
for imports scheduled for the January -June semester; 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 reduce 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 products 135, 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 validity 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
September to 31 December), with a corresponding reduction in the number of application windows
from four per year to three .138 Furthermore, the listing of animals and animal products in
Appendices 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 submission, 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 came 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 (MOT 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 (MOA 58/2015) of 25 December 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.
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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 chilled carcass and meat.141
2.3 The measures at issue
2.3.1 Introduction
2.32. As explained above, the co-complainants have challenged a total of 18 measures concerning
Indonesia's import licensing regimes for horticultural 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 REGIME FOR HORTICULTURAL PRODUCTS
DISCRETE ELEMENTS OF THE REGIME:
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, sale 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 products as a whole.
B. IMPORT LICENSING REGIME FOR ANIMALS AND ANIMAL 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 windows and validity periods
Measure 12 Periodic and fixed import terms
Measure 13 80% realization 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 REQUIREMENT
Measure 18 Sufficiency of domestic production to fulfil domestic demand

2.3.2 Import licensing regime for horticultural 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.
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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, importers 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 Approvals 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
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 in 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 days 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 follows:
(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 in 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 issuance 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 customs. 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 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 importer. Exhibit JE-10.
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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 13 151 and 30 152 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 products, the country of origin, and entry point , while the Import Approvals include
the type of imported product, the quantity requested 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 not coincide with
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, 24 156, 25A157,
26158 and 27A159 of MOT 16/2013, as amended.

149 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand's first
150 Article 6(3) and (4) of MOA 86/2013 provide as follows:
(3) RIPH includes;
a. RIPH number;
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 11, 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 Minister, 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 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.
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
155 Article 14A of MOT 16/2013, as amended, provides 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 period" Exhibit
JE-10.
156 Article 24 of MOT 16/2013, as amended, provides as follows:
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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 realized 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 designations. 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 5 162 and 8 163 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 Import 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 included 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 and 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, as 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 and/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, can 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 Products. Exhibit JE-10.
160 Article 14A 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, para. 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 in 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 consumption.
(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:
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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 prohibits 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 Council 165 which are later published as
part of Indonesia's five -year Development Plans. The Ministry of Agriculture communicates its
specified time periods 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 periods set by the Ministry of Agriculture by issuing Import
Approvals in accordance with the specified time 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 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. 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 Agriculture
Practices/GAP; b. post-harvest packing house registration issued by authorized agency from the
country of origin; 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 time 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 Questions nos. 18 and 34.
166 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1-4; New Zealand's first
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) item 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 capacity …" 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.
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Indonesia implements th is M easure by means of Articles 7 170, 8 171, 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 a n 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 products.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 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 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, 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 needs of its industrial production process and are prohibited from trading and/or transferring these
Horticultural 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
electronic 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 47/2013, 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 amended 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.
174 Articles 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 submission, 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 0703.10.29.00 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 the 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 0709.60.10.00
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.
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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 takes 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 chilli; IDR 28,000 for bird's eye chilli; 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 over 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 86/2013, 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 prohibition 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 amended 190; and
Articles 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 question 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
189 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.
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 integral 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.
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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 46/2013, 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 importers 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 Articles 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 fixed 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 Recommendations, 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 volatility, 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
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 quarter, 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) Import 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 15 of MOT 46/2013, as amended (Exhibit JE-10), provides as follows:
(1) A Certificate of Health 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).
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elements specified in Recommendations once they have been issued .199 This measure is
implemented by Indonesia through Articles 30 200 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% realization 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 establishment 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 Recommendation; 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 Representatives 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
Registered 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 Enterprises, 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 other 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 Ministerial 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
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:
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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 3 210, 17211, 25(2) 212 and 26 213 of MOT 46/2013, as
amended, and Articles 32214 and 39(d)215 of MOA 139/2014, as amended.

(1) RI-Animals and Animal Products or companies that have already obtained 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 included 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 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.
(3) The reports, as described in paragraph (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 Control 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 violated 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
210 Article 3 of MOT 46/2013, as amended, provides as follows:
(1) Animals, as described in Article 2, paragraph (2), can be imported in order to:
a. improve genetic 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 carcasses, meats, and/or offals, as
listed in Appendix 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:
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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 carcasses, 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 imported 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: Domestic purchase requirement for beef
2.60. Measure 15 consists of the requirement imposed upon importers of large ruminant meats to
absorb local beef .220 Indonesia implements this Measure pursuant to Articles 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, provides:
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.
214 Article 32 of MOA 139/2014, 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, catering, 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 special 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/international 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 intended 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 Operators, 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 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.
216 Animals, as described in Article 2, paragraph (2), of MOT 46/2013, as amended, Exhibit JE-21.
217 Article 3. a.-d. of of MOT 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 Operators, 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, as 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;
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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 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.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 issued 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 amended, 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 24 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
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 postponed 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 paragraph (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 paragraph (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.
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MOT 2/2015, as a whole.228 We refer to the various 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 culture Law, Articles 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 FOR FINDINGS AND RECOMMENDATIONS
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 perform 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 certain 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 added 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 requirement 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 importation 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 done 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 Production 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

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, distribution 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 finds 241 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 with 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 submission, 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
presented any argumentation concerning Article 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". 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 challenged
measures with Article 2.2(a). Nor has the United States at this point definitively 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 Request; United States' first written submission, para. 395; second written
submission, para. 242.
WT/DS477/R • WT/DS478/R

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
recommends the DSB that Indonesia bring the challenged measures 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 PARTIES
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 THE 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 adopted 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-complainants' 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 aspects 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. References 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 submitted 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.
246 United States' comments on the Interim Report of the Panel, para. 4.
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6.3 Structure of the findings
6.5. According to the United States, panel reports frequently contain a section in which the panel
sets out its approach 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 burden 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
argued 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 suggested 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 Measures 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 Agriculture 252 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, paras. 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 to
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 government 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.
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6.6 Evidentiary 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 regime 256 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 context of the
Panel's analysis of Me asure 1 258 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-complainants 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 the 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 meaning of the challenged measure.268

255 Indonesia's comments on the Interim Report of the Panel, para. 12.
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.
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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 respect 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
paragraphs 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 quantitative 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 referred 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 Reports, Japan – Alcoholic Beverages II, para. 5.2; Australia – Salmon, para. 7.3; Japan –
Suspension, paras. 6.16–6.17; US – Continued Suspension, paras. 6.17–6.18; India – Agricultural Products,
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

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 paragraphs 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 Panel"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
"limiting 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 were 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 -complainants 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
extensive 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 reference.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 Interim 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, para. 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 Interim 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.
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shall address 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 repealed 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 due 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 importation can be attributed to the intrinsic elements of 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 imported 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 towards some 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 Interim 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 Panel, 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 the 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 comments 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

but not as to others…" 296 and thus 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 measures 304, 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 measures 306, 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 requirement, Indonesia has already brought its measure into compliance, the
United States was of the view that such a request went beyond the Panel's terms 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 to 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
305 New Zealand's comments on Indonesia's comments on the Interim Report of the Panel, para. 9.
307 United States' comments on Indonesia's comments on the Interim Report of the Panel, 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

"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 defined 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
paragraph 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 the 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

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 Article 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

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 justified 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 order 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 sets 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 measures.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, continuing 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 Article 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 Report 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

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 Indonesia 331 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 parties 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 parties 336; situations
where third parties maintain measures similar to the measures at issue 337, or where
practical considerations arise 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 Reports, 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 Reports, EC –
Tariff Preferences, Annex A, para. 7(d); EC –Export Subsidies on Sugar (Australia, Brazil and Thailand),
335 Panel Report, EC and certain member States – Large Civil Aircraft, para. 7.166.
336 Panel Reports, EC – Bananas III (Guatemala and Honduras), 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

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, Brazil, 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 ruling 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 examining 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 easures 1 (Limited application
windows and validity periods ), 2 ( Periodic and fixed import terms ), 3 ( 80% realization
requirement) and 5 ( Storage ownership 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,
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, 138, 141, 147, 163; Indonesia's second written submission, paras. 75, 177.
WT/DS477/R • WT/DS478/R

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 jurisdiction.
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 measures 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 intervention 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
decisions 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 Appellate 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 Measures 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 largely 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

importers decide of their own accord not to ship their products after a certain date.353 New Zealand
responded 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 shipments 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 Articles 13A,14, 21, 22 and 30 356 of MOT 16/2013, as amended ; and
Article 29 of MOA 139/2014, as amended by MOA 2/2015, and Articles 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 import 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 products 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 importation.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 able 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 periods)
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 Measures 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 importer. 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 response 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.
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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 commercial 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 of entry than those specified on their import permits.364
7.14. As described in Sections 2.3.2.2 and 2.3.3.3 above, Measures 2 and 12 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 authorizations.
7.15. We observe that the co -complainants are challenging Measures 2 and 12 because they
allegedly constitute restrictions having a limiting effect on importation 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-complainants 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 importers.
7.16. While the 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 conclude 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 Measures 3 and 13: 80% realization requirement
7.18. With respect to Measures 3 and 13, Indonesia argued that the 80% realization requirement
is n ot 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.
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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 restrictions allegedly having a limiting effect on importation 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 derives 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 any limitations placed on an importer's ability
to import caused by the storage capacity requirem ent for horticultural products are self-
imposed.370 New Zealand responded 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 own 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 ability to import caused by this requirement 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 States' second written submission, para. 86.
373 Appellate Body Report, US – COOL, para. 291. (emphasis original)
WT/DS477/R • WT/DS478/R

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 measure 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 jurisdiction.
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)(ii) 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 d eciding 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 Nonetheless, 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 dispute.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 the 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 started 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 horticultural 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 structured its submissions 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 GATT 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 windows 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 States' responses to Panel
questions Nos. 6 and 79.
WT/DS477/R • WT/DS478/R

Article 4.2 of the Agreement 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 Licensing 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
interpretative 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.
386 Appellate Body Report, EC – Bananas III, para. 204.
388 United States' response to Panel question No. 79.
WT/DS477/R • WT/DS478/R

invoked a defence under Article XX. 389 Given that Article XI:2(c)(ii) of the GATT 1994 concerns
measures that 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 Blouses 391 that the burden of identifying and
establishing affirmative 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 decided 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 1994
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 Indonesia'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.
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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 domestic
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 Panel Report, Japan – Semi-Conductors, para. 104 and Panel Report,
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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 listed 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 within the scope of Article XI:1 of the GATT 1994
7.2.3.2.1 Prohibitions and restrictions 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 the 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
something, 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 export 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 restriction 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
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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 Elimination 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 that 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 – Import 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 have 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
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 Appellate Body Report, Argentina – Import Measures, para. 5.217 (referring to the Appellate Body
Reports, China – Raw Materials, paras. 319-320).
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reject a licence application. 410 In particular, the 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 and impose[d] a significant burden on importers that [was] unrelated to
their normal importing activity".411 In reference to the 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 opportunities 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 argued 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 demonstrate
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 Reports, China – Raw Materials, para. 7.957.
411 Panel Report, Argentina – Import Measures , para. 6.479 (finding upheld by the Appella te Body
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, paras. 319-320).
414 Appellate Body Report, Argentina – Import Measures, para. 5.217 (referring to the Appellate Body
Reports, China – Raw Materials, paras. 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.
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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 design, 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 as 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 effect 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 flows 425 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 permitted 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,
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 –
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, paras. 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 –
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).
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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 procedures 429, New Zealand submitted that the
characterization 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, the 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 Article 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 . O n 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 restrictions as well as prohibited non–automatic licensing procedures, 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,
430 New Zealand's opening statement at the second substantive meeting 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 through 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 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).
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 the
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 written submission, paras. 95-96; opening oral statement at the second
436 United States' second written submission, paras. 96; response to Panel question No. 11.
437 The United States argued that they are not automatic because they impose substantive prohibitions
and restrictions on the type and quantity of products that can be imported, 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 part 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.
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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 the 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 restriction 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 contended 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.
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of GATT 1994". According to the co -complainants, as Article XI:2(c) applies explicitly to "import
restrictions 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 Panel 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 application 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 working days from 9-17 December 2014.
WT/DS477/R • WT/DS478/R

seasonality and the time it takes to package and ship product to Indonesia, negatively affects
suppliers, 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 ended 451, 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 an 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, paras. 100-102.
460 United States' first written submission, para. 157.
WT/DS477/R • WT/DS478/R

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 exclude US horticultural products from the Indonesian 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 2014 465, 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 arguments 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 -discriminatory 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 –
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 th e 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, para. 166.
469 Indonesia's first written submission, para. 134.
470 Indonesia's second written submission, para. 159.
WT/DS477/R • WT/DS478/R

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 horticultural 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 Panel
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 inconsistent with Article XI:1 of the GATT 1994 because it constitutes a
restriction having a limiting effect on the importation of horticultural imports into Indonesia and
limits the competitive opportunities of importers and imported products.475 As explained in Section
7.2.3 above, prior panels have followed a two -step test where by they first establish whether the
complainant has 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 has demonstrated that the
measure at issue has a limiting effect on importation.
7.74. The co-complainants argued that Measure 1 constitutes a restriction on importation 476, 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 argued that the components of Indonesia's import licensing regime for animals,
animal products and horticultural products, which include Measure 1, constitute prohibitions or
restrictions 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 licences or other measures".479
7.75. Indonesia did not contest the co -complainants' characterization 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-complainants 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 submission, para. 155.
477 New Zealand's first written submission, para. 284; United States' first written submission, fn. 283.
478 New Zealand's first written submission, para. 284.
479 United States' first written submission, para. 142. (emphasis original)
480 Indonesia'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

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 mentioned 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 Articles 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 to 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
applications 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 Zealand's first written submission, para. 88; 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

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 Approval 489, 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 integrated into Measure 1:
Import licensing for horticultural products: Measure 1 scenario

7.81. To ensure that we understood and analysed correctly the design, architecture, and revealing
structure of this Measure a s well as its resulting operation in practice , the Panel devised a
hypothetical 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 fourteen), 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 no. 94.
WT/DS477/R • WT/DS478/R

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 application 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 application 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 Approval 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 disagreed 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 elements 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 Zealand'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 Zealand 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 (referring 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

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 when there would be no imports to Indonesia. Regarding Indonesia's argument that the RIPH
will be issued within seven days, we note 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, the effect on importation 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 resulting 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 WTO 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 volume of
imports decreased 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 period 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

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 having 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, 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).
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 –
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

opportunities" available to imported products.508 New Zealand claims that this has a consequential
limiting effect on imports contrary 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 of 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 requirement 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 outset 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 written 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

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 apparel 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 -complainants' contention that Measure 2 constitutes a
restriction on importation 528, and that it is not a duty, tax, or other charge, and, therefore, is
within the scope of Article XI:1.529 New Zealand argued that the components of Indonesia's import
licensing regime for 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. 137.
525 Indonesia's first written submission, para. 138.
527 New Zealand's Panel Request , pp. 1-4; United States' Panel Request , pp. 1 -4; 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.
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 second written submission, para. 165.
WT/DS477/R • WT/DS478/R

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-complainants have demonstrated that Measure 2 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 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 imported 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 that 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 penalty, 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
contended 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
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 % realization 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
WT/DS477/R • WT/DS478/R

impact on the "competitive opportunities" available to imported products 540, with a consequential
limiting effect on imports, contrary to Article XI:1 of the GATT 1994.541
7.108. Similarly, the United States stressed 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 United 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 imports.
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 particular, 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
advantage 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 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.547 We thus share 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
547 New Zealand's second written submission, para. 198.
548 New Zealand's second written submission, para. 199.
WT/DS477/R • WT/DS478/R

(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 Conclusion
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 its design, architecture and revealing structure, it constitutes
a restriction having a limiting effect on importation.
7.2.7 Whether Measure 3 (80% realization requirement) 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 imports they request in their horticulture 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 Approval 550, 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 businesses. 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 within 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. 209.
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).
557 United States' first written submission, fn. 306.
558 United States' first written submission, para. 170.
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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 requirement 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 India 566 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 impact 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 submission, para. 170.
560 United States' first written submission, para. 170.
561 United States' first written submission, paras. 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,
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

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 Indonesia.577
7.2.7.2 Analysis by the 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 importation of horticultural imports 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 that the co-complainants argued 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 argued that the components of Indonesia's
import 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.

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 written 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

7.125. As with the previous measures 585, 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 products 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 -complainants' argumentation is the alleged limiting
effect on importation as a result of the incentives created by the 80% realization requirement.
New Zealand thus argued 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 submitted that each RI must lower the quantity it requests in
its Import Approval 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 contended 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 penalties 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
possibility 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
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, paras. 171-173.
590 United States' first written submission, para. 171 (referring to Exhibit USA-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

prospect of having their RI designation revoked and therefore not being able to import products for
at least two years is a powerful 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 explains 594, 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 shallots dropping below the reference p rice. As we explain in Section 2.3.2.3
above, this would mean the suspension of imports altogether.
7.132. We observe that Indonesia has argued 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 caused 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 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 obligation to satisfy
an export commitment imposed by India599 amounted to an import restriction, where the degree 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.
596 Appellate Body Report, Argentina – Import Measures, para. 5.2 17 (referring to the Appellate Body
Reports, China – Raw Materials, paras. 319-320).
597 Exhibit USA-21.
598 Exhibit USA-28 and NZL-53.
WT/DS477/R • WT/DS478/R

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 the quantity of products they are allowed to import.
7.2.7.3 Conclusion
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 having 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 period 605 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 XX(b).608

601 New Zealand's first written submission, 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 written submission, para. 221.
WT/DS477/R • WT/DS478/R

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 semester 613, and that based on this
information, the 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 2012 615 but that the import quantity fell precipitously
after the promulgation 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 2014 616 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 2016 618, 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 recalls 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 quantities 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.
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 submission, 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).
618 United States' 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

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
ensuring 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 licence requests".630
7.143. In addition, Indonesia submits that this measure can 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 product 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 claim 633,
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 importation 634, 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 argued 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 submission, 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 written 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

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
Section 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 measures 640, we proceed to examine whether the co -complainants
have demonstrated that Measure 4 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 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. 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. 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 periods, the Ministry of
Agriculture is guided by the objectives and determinations made by the Food Security Council 643
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. Accordingly, 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 periods 646 and thus restricting the ability of imported products to compete in the
domestic marketplace.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 have 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

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 manner 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 imports.651
7.151. It thus appears that Measure 4 is designed within the context of other components of
Indonesia's import licensing 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 periods 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 horticultural
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 from Dr Yul Harry 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
relatively 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 – limited 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, especially 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/stable
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 Kalimantan 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

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 importation:
a. Indonesia imported approximately 980,000 kilograms of mangoes in 2011 and one
million kilograms in 2012 654 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 2016 657, 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
measures 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 production 662, and found that 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 Conclusion
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 having a limiting effect on importation.

654 United States' 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).
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

7.2.9 Whether Measure 5 (Storage ownership and capacity requirements ) is
inconsistent with 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 recalls 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 their 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 products imported
over the entire six -month period on a one -to-one ratio.673 Responding to Indonesia's arguments,
New Zealand contends 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
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

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 specified 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 barrier 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 -complainants' 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. According to Indonesia, this is so as the co-complainants are arguing that importers

675 United States' first written submission, para. 187.
676 United States' first written submission, fn. 330.
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.
WT/DS477/R • WT/DS478/R

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 commence by observing that the co-complainants argued 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 argued 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' characterization 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 scope 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 explicitly from the scope of Article XI:1 of the GATT 1994.
7.169. As with the previous measures 692, 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,
architecture, and revealing structure of Measure 5, within its relevant context.
7.170. As described in Section 2.3.2.5 above , w e 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 requires 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 instance, New Zealand argued 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

685 New Zealand's first written submission, para. 250; United States' first written submission, para. 188.
686 New Zealand's first written submission, para. 250; United States' first written submission, para. 191.
687 New Zealand's first written submission, para. 284; 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
WT/DS477/R • WT/DS478/R

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 explained 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 argued 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 disagreed and argued 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 argued, by ignoring the possibility of multiple 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 imports. 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 sell 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. 25.
696 United States' first written submission, para. 189.
697 United States' first written submission, para. 190.
699 United States' first written submission, para. 189 (referring to Exhibit USA-28); New Zealand'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

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 expensive 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 , i mporters
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 Conclusion
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 having 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 imports 704, 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 PIs 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

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

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. 249.
710 New Zealand's first written submission, para. 255 (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. 257 (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. 256 (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. 256 (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, paras. 90 and 156).
720 New Zealand's second written submission, para. 248 (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.
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import horticultural products as materials for use in their own industrial production process and
are prohibited from 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 Indonesia'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 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 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 imports 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, para. 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).
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
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.
732 Indonesia's second written submission, para. 189.
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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 contrary to Article XI:1 of the GATT 1994.
In particular, we are to determine whether by prohibiting 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 commence by observing that the co-complainants argued 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 observe that Indonesia has not contested the co -complainants' characterization 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 measures 740, 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 , w e 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 written 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; United States' first written submission, paras. 70-72.
WT/DS477/R • WT/DS478/R

consumers but only to distributors and that those products imported for further processing cannot
be sold or 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 products.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 through 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 agreed and also referred 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 importation 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 supply 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 levels of imports are brought into Indonesia.748
7.196. We thus observe that the co -complainants' 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 disincentives and undue burden s on importation.749Accordingly, business
operators are compelled to take decisions and act without due regard to commercial
considerations, only as permitted by one's importer status 750 because the costs associated with
importation increase for both RIs (having to sell to distributors 751) 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. 249.
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.
747 United States' first written submission, 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).
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.
752 United States' first written submission, para. 195.
WT/DS477/R • WT/DS478/R

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 eliminating 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 Conclusion
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 having 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 1994 757 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
754 New Zealand 's first written submission, para. 258 (referring to Panel Report, Brazil – Retreaded
Tyres, paras. 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, 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 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 importation.
756 Panel Report, India – Quantitative Restrictions, paras. 5.142-5.143.
757 New Zealand's first written submission, para. 267.
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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 Trade 759 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 2015 763 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 effect 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 Prices 767 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 prices 769 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. 259 (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 second 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 Materials,
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).
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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 constitutes 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 statement at the first substantive
785 United States' second written submission, para. 34 (referring to Indonesia 's opening statement at
the first substantive meeting of the Panel, para. 25).
786 United States' second written submission, para. 34.
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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 shallots 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 contrary 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 importation 794, and that it is not a duty, tax, or other charge, and, therefore, is
within the scope of Article XI:1.795 New Zealand argued 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, import 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 submission, 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 written 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. 284; United States' first written submission, fn. 338.
796 New Zealand'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

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 chillies and IDR 25,700/kg for shallots, 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 appears to be two -fold: on the one
hand, they consider that the design, structure and operation of Measure 7 results in both a straight
import ban when the reference price system is triggered 809; 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, we 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 question 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 question 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 States' 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

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
addition, 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 price.
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 Indonesia'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 "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. 814 As New Zealand
pointed out, the panel in China – Raw Materials considered the consistency of limiting exports
below certain prices 815 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 prices below that reference price.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 submission, 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 question No. 39, para. 110.
WT/DS477/R • WT/DS478/R

system, as the reference price calculation methodology and parameters are not published 820 and
the reference price can be re -evaluated at any time. 821 On the other hand, the design and
structure of this Measure incentivizes 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 triggered.
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 submission, 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 " Horticultural 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 monthly 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 period, and by 90% from 2011 to 2015.
828 Indonesia's response to Panel question No. 37.
WT/DS477/R • WT/DS478/R

Domestic and Reference Prices for Big RED and Curly RED Chillies, 2012-2015 (Rupees
per kilogram)

Domestic and Reference Prices for Fresh Shallots, 2012-2015 (Rupees per kilogram)

Source: Indonesia's response to Panel question No. 38. Exhibit 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

7.2.11.3 Conclusion
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 having 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. 270; second written submission, para. 276.
830 New Zealand's first written submission, para. 268 (referring to Article 8(1), MOA 86/2013, Exhibit
JE-15).
831 New Zealand's first written submission, para. 268 (referring to Article 8(1)(a), MOA 86/2013, Exhibit
JE-15).
832 New Zealand's first written submission, para. 268 (referring to Article 14, MOA 86/2013, Exhibit
JE-15).
833 New Zealand's first written submission, para. 269 (referring to Appellate Body Report, China – Raw
Materials, para. 319).
834 New Zealand's first written submission, para. 269 (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. 276 (referring to Appellate Body Report, China –
Raw Materials, para. 319).
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

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 Agreement 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 limitation 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 not 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 importation 851, and that it is not a duty, tax, or other charge, and, therefore, is
within the scope of Article XI:1.852 New Zealand argued that the components of Indonesia's import
licensing regime for animals, animal products and horticultural products, which include Measure 8,

842 United States' first written submission, para. 205 (referring to MOA 86/2013, 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 submission, para. 258; United States' first written submission, fn. 342.
WT/DS477/R • WT/DS478/R

constitute prohibitions or restrictions made effective through an "import licence" or, alternatively,
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 -complainants' 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 -complainants 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 measures 857, 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
importation. 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 consists 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 horticultural 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 claimed 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 States 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 submission, 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' first 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

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 Zealand 868, 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 argued 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 attempted 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 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. 873 Whilst w e do not think that th ese are valid
arguments 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 Conclusion
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 submission, para. 208.
868 New Zealand's first written submission, para. 269 (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 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).
870 New Zealand'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 submission, 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

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 Indonesia 879, 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 ) summarized 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 Zealand's first written submission, para. 283 (referring to Panel Report, US – Poultry (China),
para. 7.450).
WT/DS477/R • WT/DS478/R

restricts imports of horticultural products 888, New Zealand argues that Indonesia has again sought
to r ely 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 86/2013 891, 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 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 "892 and to prohibit importation
"when the availability of domestic Agricultural 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
components 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
applications.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 submission, 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, paras. 50 and 51.
WT/DS477/R • WT/DS478/R

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 working days.900
7.254. Responding to the co -complainants' argument that Indonesia's import licensing for certain
horticultural 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 imports 901, 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 fall 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 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 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 Zealand 909 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

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 commence by observing that the co-complainants argued that Measure 9 constitutes a
restriction on importation 911, and that it is not a duty, tax, or other charge, and, therefore, is
within the scope of Article XI:1.912 New Zealand argued 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 submitted 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 measures 917, 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 operation 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
measures, 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. 178).
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
919 See for instance New Zealand'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 submission, 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

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 al so 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 sufficient."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
submitted 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 Measure 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 Indonesia'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 Appellate 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. 178).
934 New Zealand's first written submission, para. 272; United States' first written submission, para. 215.
935 New Zealand's first written submission, paras. 198-202 and 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

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 effects of each measure are compounded 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 unfavourable 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 i s
compounded or exacerbated as a result of their inherent interaction as part of Indonesia's import
licensing regime as a whole.

937 See paragraph 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. 172 (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

7.2.13.3 Conclusion
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 having 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 the 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 carcass and secondary cuts and that this 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 XI: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 bovine 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 measures 945, the prohibition on
importation 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, paras. 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, Argentina — 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 submission, para. 30.
949 New Zealand's second written submission, para. 30.
WT/DS477/R • WT/DS478/R

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 Approval 953
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 are 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 139/2014 960; 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 written 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 question No. 1.2, para. 25.
958 Indonesia's first written submission, paras. 34, 96 and 164.
959 New Zealand'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

(ii) approval is ob tained by a second Minister 966; 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 Indonesia 971 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 Indonesia 975, 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 submission, para. 137 (referring 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).
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

prohibiting 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 submission 983, 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 points 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 2009 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 No. 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

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 -complainants' charact erisation of Measure 10 as an import
prohibition o n unlisted products 999 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 characterisation or even the existence of this Measure. We thus commence
our analysis by recalling the description of Measure 10 put forward by the co -complainants 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 meats 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 claimed 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
submitted that Article 26 of MOA 139/2014, as amended , provides that 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,
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 written 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 submission, para. 260.
1004 New Zealand's first written submission, fn.65; United States' first written submission, fn. 192.
WT/DS477/R • WT/DS478/R

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 confirms 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 all 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 Law 1012; the Animal Law and its Amendment 1013;
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 determination".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 question 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

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 Amendment 1023 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 Amendment 1026 establishes that every person
wishing to import 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 the 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 certain 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
products 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 indicative 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 enterprises 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 response 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 question 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

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 the 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 same 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 requires 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 regulations 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 Conclusion
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 inconsistent 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 to 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

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 which 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 often 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 quarter 1044,
which constitutes 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,
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,
1047 New Zealand's first written submission, para. 151 (referring to Article 12(3) , MOT 46/2013, Exhibit
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, para. 9, Exhibit NZL-21).
1051 New Zealand's first written submission, para. 152.
1052 New Zealand's first written submission, para. 154 (referring to Panel Reports, Colombia – Ports of
WT/DS477/R • WT/DS478/R

imported animals and animal products, thereby limiting imports contrary to Article XI:1 of the
GATT 1994.1053
7.303. New Zealand further 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 origin1061, 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

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
implementation 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 . A ll applications for MOA-Recommendations or Import Approvals can be
submitted online at INATRADE 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 submission, 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 written 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

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 -complainants1079,
Measure 11 is inconsistent with Article XI:1 of the GATT 1994 because it constitutes a restriction
having a limiting effect on importation 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 scope 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-complainants 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 structure 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 the 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. 163.
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 submission,
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
WT/DS477/R • WT/DS478/R

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, 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 argued 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 investment 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 be 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 argued 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 explained 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 validity period of the Import Approval 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, para. 48 and fn. 84; United States' first written submission,
para. 112.
1091 United States' first written submission, paras. 156-157, 266-271; second written 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

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 PRODUCTS: 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 46/2013, 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

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 waiting 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 -complainants, 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 provided 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 Section 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
periods 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 first 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 -complainants 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; comments on response by Indonesia to Panel
question no. 94. United States' response to Panel question No. 49; comments on response by Indonesia to
Panel Question 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

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, the 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 Conclusion
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 having 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, the 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 designation 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
1107 New Zealand's first written submission, 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. 163.
1111 New Zealand's first written submission, para. 155.
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

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
restriction 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, which 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 regulations.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 submission, 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 temporarily 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 submission, para. 72 (referring 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 written submission, fn. 407.
1125 United States' first written submission, para. 274.
WT/DS477/R • WT/DS478/R

obtain future Recommendations, revocation of Import Approvals and RI designations 1126, and re-
exportation 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 argues 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 licence but, rather, the inability
of importers to import products of a different type, quantity, 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 refers 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 requirement 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 that 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, Exhibit 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
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

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 importation of animals 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,"
including 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
maintained 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
Measure 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 measures 1146, 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-complainants 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 Recommendations, and
the prohibition of requesting changes to the elements specified in Recommendations once they
have been issued.1147 This measure is implemented by Indonesia through Articles 30, 33(a)-(b) and
39(e) of MOA 139/2014, as amended, 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 submission, 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. 208; 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, paras. 49-51; United States' first written submission, para. 117.
WT/DS477/R • WT/DS478/R

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 have fewer opportunities to import products
into Indonesia.1153
7.345. In the same vein, the United States contended 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 to 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 structured 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 products 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,
1151 New Zealand's first written 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

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 port 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 incentives 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 Import Approvals declined.1160
7.2.16.3 Conclusion
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 having a limiting 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 that 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, para. 164 (referring to Article 13 of MOT 46/2013, Exhibit
JE-18).
WT/DS477/R • WT/DS478/R

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 twice1165; (iii) and the imposition of fines for not complying with the
provisions of MOT 46/2013, including the 80% realization requirement.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 being 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 restriction 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 least 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 magnified 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 vaguely 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, para. 166 (referring to Article 26 of MOT 46/2013, Exhibit
JE-18).
1165 New Zealand's first written submission, para. 166 (referring to Article 27(a) of MOT 46/2013, Exhibit
JE-18).
1166 New Zealand's first written submission, para. 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 written 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
1171 New Zealand's first written submission, 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

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 contends 1179, but rather that the measure is specifically
directed at limiting imports of bovine animals.1180
7.356. Responding to Indonesia'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 United 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 Panel
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, paras. 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

not fulfil this reporting requirement three times 1187 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 they 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
importers 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 XI:1 of the 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 46/2013, 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.
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

has had an adverse impact on trade flows .1200 Indonesia contends that 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 lose 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 -complainants1205,
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 argued that Measure 13 constitutes
a restriction on importation 1206, 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
Measure 13, constitute prohibitions or restrictions made effective through an "import licence" or,
alternatively, an "other measure".1208 The United States submitted 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 description 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 measures 1212, 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 written 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. 164; United States' first written submission,
para. 283.
1206 New Zealand's first written submission, para. 164; United States' first written submission,
para. 283.
1207 New Zealand's first written submission, para. 208; United States' first written submission, fn. 418.
1208 New Zealand's first written submission, para. 203.
1209 United States' 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

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 -complainants' 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 requested
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 greater 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 submitted 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 realization 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 penalties
for not complying with the 80% realization requirement. Indeed, pursuant to Articles 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. Nonetheless, 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
1214 New Zealand's first written submission, para. 166.
1215 New Zealand's second written submission, para. 87.
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

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 explained, 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 3 1223, 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 India 1225 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 Conclusion
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 having 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
1223 United States' first written submission, para. 286.
1224 See paragraph 7.132 above.
WT/DS477/R • WT/DS478/R

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 supermarkets 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. Responding 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 jurisprudence 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 imports 1235, 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. 172-173.
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
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 Reports, Argentina –
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

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 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 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 outlets 1247, 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 argues 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 States' 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 Liquor 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

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 human consumption.1253 Indonesia submits that the 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 commence by observing that the co-complainants argued that Measure 14 constitutes
a restriction on importation 1256, 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 submitted that Article XI:1 applies 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 therefore not excluded explicitly from the scope of Article XI:1 of the GATT 1994.
7.387. As with the previous measures 1262, 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 distribution 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 Articles 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 submission, 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 submission, 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
1264 Article 3. a.-d. of MOT 46/2013, as amended, Exhibit JE-21.
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bovine carcasses, 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 the 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 reach 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 channels or outlets. New Zealand further submitted
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 Measure 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 submitted that an importer that 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 suspended 1271, 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 small 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 Zealand's first written submission, para. 176 (referring to Article 32(2), MOA 139/2014 as
amended, Exhibit JE-28); second written submission, para. 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 States' 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

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 Measure 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 consumption 1276 and limits th e opportunities of
imported products in the Indonesian market . The Measure thus limits 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 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;
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 II 1280 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 46/2013, 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 purchases 1281, sometimes even

1275 Indonesia's second written submission, para. 193.
1276 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.
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 needs" 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 of 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 Retail 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 wet 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, including 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

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 by 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 Conclusion
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 having 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 GATT 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 basis 1287 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, consumers 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, para. 40. We also note that a
2010 survey shows that Indonesian 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 Fruits 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 Alcoholic 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 "restrictions" 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 Zealand's first written submission, para. 189.
1287 New Zealand's first written submission, para. 180 (referring to Absorption Presentation, Slides 4
and 5, Exhibit NZL-38).
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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 beef 1289 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 Argentina – Import Measures confirmed that a suite of trade related
requirements, which included a local content requirement, breached Article XI:1 1293, and that
Indonesia's domestic purchase requirement is structurally akin to the local content requirement
considered 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 unreferenced 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
importers 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 Absorption 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 written 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, para. 136 (referring to Article 5 ofMOA 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.
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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 Requirement 1300, 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 Indonesian 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 of 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 into 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 compliance 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 Self-Sufficiency
Policies Have Depleted 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 Indonesia'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. 142 (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. 46).
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 written submission, para. 298.
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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 requirement 1313, 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
domestic 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 –
Import 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 restriction" 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 Import 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. 303; 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

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
recommendation 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% domestic 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 plan 1332, and also 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 importer 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 139/2014, 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 submission, 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

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 Article XI:1 of the GATT 1994.
7.416. We commence by observing that the co-complainants argued that Measure 15 constitutes
a restriction on importation 1336, 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 submitted 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 and
it is therefore not excluded explicitly from the scope of Article XI:1 of the GATT 1994.
7.418. As with the previous measures 1342, 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 requirement imposed
upon importers of lar ge ruminant meats to absorb local beef .1343 Indonesia implements this
Measure pursuant to Articles 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 contended 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 decisions
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 written submission, para. 189; United States' first written submission,
para. 298.
1337 New Zealand's first written submission, para. 208; 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

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
imposes 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 products 1347; (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 purchase 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 amended, 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 submission, para. 301.
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 response 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 question No. 107.
WT/DS477/R • WT/DS478/R

enactment of MOA 58/2015, which came into force on 7 December 2015 replacing MOA 139/2014,
as amended, importers 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
domestic 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
alternative 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 effect 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 Conclusion
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 having a limiting 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
importation 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
export 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 submission,
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. 193 (referring to Appellate Body Report, Chile – Price
Band System, para. 236).
WT/DS477/R • WT/DS478/R

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 price 1369, 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
importation 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 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:1.1374
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. 196 (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
1368 New Zealand's second written submission, para. 156.
1369 New Zealand's second written submission, para. 157.
1370 New Zealand'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.
1374 United States' first written submission, fn. 462.
1375 United States' first written submission, para. 311.
WT/DS477/R • WT/DS478/R

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 claims 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, importers 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 importation 1383, 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 submitted 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 Article XI:1 of the GATT 1994.

1376 United States' first written submission, para. 312 (referring to Panel Report, China – Raw Materials ,
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.
1382 New Zealand's first written submission, para. 192; United States' first written submission,
1383 New Zealand's first written submission, para. 192; United States' first written submission,
1384 New Zealand's first written submission, 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

7.439. As with the previous measures 1389, 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 structure of Measure 16, within its relevant context.
7.440. As described in Section 2.3.3.7 above , w e observe that 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. 1390 This Measure is implemented by means of
Article 14 of MOT 46/2013, as amended . Pursuant to these provisions , i n the event that the
market price of secondary cuts of beef is below the established reference 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 appears 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
agreed 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 leaves 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 by 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 priced imports.1397
7.444. Concerning 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 price. 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
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 written 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, paras. 191 and 192 (referring to Article 14(1) of
MOT 46/2013, Exhibit JE–18).
1396 New Zealand's first written submission, paras. 195-196.
1397 United States' first written submission, para. 315.
WT/DS477/R • WT/DS478/R

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 domestic 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
Measure 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 effects even when the reference price system 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 Team 1402; and the timing of the introduction of a new
reference 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 their 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 (referring 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 Indonesia 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 current 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

7.450. In this respect, as we explained with respect to Measure 7, the panel 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 Conclusion
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 its design, architecture and revealing structure, it constitutes
a restriction having a limiting effect on importation.
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
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 New 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 measure" 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, paras. 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 submission, para. 172.
1412 New Zealand's first written submission, para. 203.
WT/DS477/R • WT/DS478/R

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 Measures 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 Indonesia 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 importation 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 Article 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 written 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
1421 United States' first written submission, para. 318.
WT/DS477/R • WT/DS478/R

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 implemented 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 imports 1430, 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 submission, para. 55 (referring 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

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 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 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 Zealand 1438, 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 fresh 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 commence by observing that the co-complainants argued that Measure 17 constitutes
a restriction on importation 1442, 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 States submitted 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. 178).
1440 Indonesia's first written submission, para. 170.
1441 New Zealand's first written submission, para. 198. United States' first written submission,
1442 New Zealan d's first written submission, para. 198; second writte n submission, para. 171.
1443 New Zealand's first written submission, para. 208; United States' first written submission, 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

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 measures 1448, 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 claimed 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 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 therefore 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 becomes 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 submitted 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 automatic 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 submission, 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, paras. 6.223-6.225).
1452 New Zealand's first written submission, para. 200; second written submission, paras. 171 and 172.
1453 United States' first written submission, para. 318.
1455 Indonesia's second written submission, para. 68.
1456 Indonesia's second written submission, para. 71.
WT/DS477/R • WT/DS478/R

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 combination 1457 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 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 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 related 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
comply 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 submission, para. 202; second written 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

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 animals and
animal products is characterized by an overall environment which is unfavourable to imports and
importers, impos ing strong disincentives f or commercial operators to conduct importation and
affecting 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 required 1462
does not change the 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 Conclusion
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 having 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 products 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 Zealand's first written submission, para. 202 (referring to Meat Industry Association Statement,
p. 8, Exhibit NZL-12); second written submission, para. 172 (referring to European Union's first opening
statement, paras. 4-5; Australia's third party written submission, 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 Article 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, para. 286.
1466 New Zealand's first written submission, para. 287.
1467 New Zealand's first written submission, para. 288.
WT/DS477/R • WT/DS478/R

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 the 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 create 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. 289 (referring to Appellate Body Report, Argentina –
Import Measures, para. 5.217).
1470 New Zealand's first written submission, para. 289.
1471 New Zealand's first written submission, para. 290 (referring to GATT Panel Report, Japan – Leather
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 Zealand'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

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 condition, 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. Indonesia 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 serves 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

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 written submission, para. 52 (referring to Indonesia's first written submission,
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

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 importation 1492 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 Article 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, Articles 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 importers 1499, as they are
only given market access on the condition, and to the extent that, domestic supply is deemed
insufficient 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 submission, paras. 13
and 82-83.
1493 New Zealand's first written submission, para. 296; 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

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 note 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 sufficiency 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 supply of
Livestock and Animal Product has not fulfill public consumption " (emphasis added). Similarly,
Article 88 of the Horticulture 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 sufficiency 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 -complainants 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 shortfall, 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 security 1508
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 inconsistent with Article XI:1 of the GATT 1994. As New Zealand argued 1509, 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. 372.
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

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 Conclusion
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 having a limiting effect on importation. Having concluded that
Measure 18 is as such 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 XX 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 Agriculture 1511, 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 justification 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
considering 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 products 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 submission, paras. 61-62.
1512 Indonesia's first written submission, paras. 121 and 133.
1513 Indonesia's first written submission, paras. 186 -188; Indonesia 's s econd written submission,
para. 89.
WT/DS477/R • WT/DS478/R

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 defences
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 defences 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 read 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 Indonesia'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

MEASURE
NO DESCRIPTION
ARTICLE XX DEFENCE
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 defences 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 defences 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
defences 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 within 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
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

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 their 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, the only mention of Article XX(b) in relation to these two measures appears
within the table of defences provid ed by Indonesia 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 the GATT 1994.

1522 See Appellate Body Reports, 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 on Indonesia's response to Panel question No. 115.
1525 Indonesia's second written submission, paras. 217-240 and 244, Indonesia's response to Advance
Panel question No. 16, para. 12 (horticultural products); first written submission, paras. 145 and 163; second
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 Reports, Korea – Various Measures on Beef, para. 157; Thailand – Cigarettes
(Philippines), para. 179.
WT/DS477/R • WT/DS478/R

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 out 1529, 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 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. 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 unsubstantiated 1532 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 submission 1533,
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, fai led 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 the 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 written 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

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 developing
country status 1537 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 second 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

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
contribute 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 local 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–
1540 Appellate Body 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 quarantine 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, 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 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 Indonesia Territory."
1542 Article 1(1) of Law 17/2006, Exhibit IDN-66.
1543 Indonesia's oral statement at the second substantive 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. 136.
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

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. Indonesia 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 distortions 1552; 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" invoked are "not inconsistent" with
the GATT 1994 1559, 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 written 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, paras. 7.553-7.562.
1553 Indonesia's second written submission, para. 144.
1554 Indonesia's second written submission, para. 143. 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 refers 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. 12 and 71,
WT/DS477/R • WT/DS478/R

and the p arties as exhibits. 1562 Hence, the fact that some of Indonesia's agriculture and trade
regulations refer to the Customs Law 1563 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 which 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 restrictiveness.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 standpoint 1571, 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 meeting, 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 opening 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. 132.
1574 New Zealand's opening statement at the second substantive meeting, para. 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

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
horticultural 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 products 1584; (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 hearing1587, Indonesia presented a non -exhaustive 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 the 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, paras. 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 first written submission,
paras. 70-71).
1582 As described in New Zealand's first written submission,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 written 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 second 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 written
submission, paras. 136, 140,142-145, 149, 160 and 163).
1588 United States' second written submission, para. 126 (referring to Indonesia's second written
submission, para. 130; responses to Panel questions No. 20 and 71); oral statement at the second substantive
meeting, para.56.
WT/DS477/R • WT/DS478/R

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 regimes "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 Law 1593, referenced in
three import licensing regulations enacted after the Panel was established. 1594 Recalling that
previous panels have looked to evidence surrounding 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 enforcement 1599, 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 Republic – 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
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 second 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
Reports, 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 Matters, 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 legal 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 Appellate 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 – Cigarettes (Philippines), para. 179).
1599 United States' oral statement at the second substantive meeting, para. 63.
1600 United States' second written submission, para. 129 (referring to Panel Report, Colombia – Ports of
Entry, paras. 7.516-517 and 7.521), where Colombia'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 did 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 its 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, explaining: "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 notes that these findings are on appeal and
have not been adopted.
WT/DS477/R • WT/DS478/R

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 not 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 licensing
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 products 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 meeting, 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 –
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 obligations 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 customs 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 purpose 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 process 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 written submission, para. 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 USA-54 (specifying
no administrative purpose for MOT 16/2013); and G/LIC/N/2/IDN/19, Exhibit USA-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 submission, para. 131 (referring to Indonesia's first written
submission, 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 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)")).
1610 United States second written submission, para. 129.
WT/DS477/R • WT/DS478/R

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 statutes 1615, and Indonesian officials have confirmed that the purpose of the
regimes is to restrict food 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 resources 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 resources 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’ access 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 MOA 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. 133 (referring to paras. 16, 84-85 of its first written
submission and Exhibits USA-7, USA-11, USA-13, and USA-14).
1617 United States' second written submission, para. 135.
1618 United States' second written submission, 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 –
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

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 measures 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 applied 1624; 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 international trade.1626 Recalling the benchmarks used to assess arbitrary
or unjustifiable discrimination between countries where the same conditions prevail 1627, Indonesia
argues that with regards to 1628 subparagraph (a), there is no discrimination between imported or
domestic 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, it would logically follow that customs enforcement, by virtue of its definition, refers to the
import or export 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 , b ut 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, para. 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. 150; 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 discrimination 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 the 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 Appellate Body in US –
Shrimp).
1635 Indonesia's second written submission, paras. 153-154.
WT/DS477/R • WT/DS478/R

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 application 1638, 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 ruling 1639, 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. Appellate 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 notified to the SPS Committee
(G/SPS/N/IDN/105), Exhibit IDN-69.
1639 Indonesia's second written submission, 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 where
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. 251; 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
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

conditions prevail", including between Indonesia and other Members; and that such discrimination
is not "arbitrary or unjustifiable".1645 New Zealand 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 issue".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 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. 1648 Thus, according to New Zealand, the import licensing
regimes at issue are implemented throug h regulations made under these overarching laws 1649,
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 measures 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 Indonesia 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 are in Indonesia.1654

1645 New Zealand's second written submission, para. 301 (referring 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 Zealand's second written submission, para. 302 (referring to Appellate Body Report, EC – Seal
Products, para. 5.302).
1647 New Zealand's second written submission, para. 302 (referring to Appellate Body, US – Gasoline,
p. 23).
1648 New Zealand's second written submission, 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. 306 (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.
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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 subparagraphs 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 prevail 1657, 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 trade 1667, 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 at the second substantive 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 substantive 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 the 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 disguised 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

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 subparagraphs.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
products.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
products.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 example 1674, 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 within 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 requirements 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. 235.
1670 United States' second written submission, para. 236.
1671 United States' oral statement at the second substantive 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 substantive meeting, para. 69.
1677 United States' second written submission, para. 238.
WT/DS477/R • WT/DS478/R

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 application 1683, and recalling previous
Appellate Body findings 1684, 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 confirm 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 written submission, paras. 153-154.
1681 United States' oral statement at the second substantive meeting, para. 71 (referring to Appellate
1682 United States' oral statement at the second substantive meeting, para. 71.
1683 Indonesia's second written submission, 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 submission, para. 239.
1687 United States' second written submission, para. 239 (referring to its first written submission, paras.
10, 13-16, 82-83 (the United States contends that the "self-sufficiency" objective underpins the measures at
issue, with the Horticulture 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 Government officials, from cabinet ministers to
civil servants, who have expressed the government's goal of reducing imports of beef, horticultural products
and other foods)).
1688 United States' second written submission, para. 240 (referring to its first written submission, 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

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 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) …
 …
 (d) necessary 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 measure, 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 provisionally 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 explains that he imposes these restrictions to ensure that imported horticultural products do not
compete with local products 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.
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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 defence 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, 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.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 factors 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 – Financial 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
1698 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 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.
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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 means 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 exceptions 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–restrictiveness 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 II (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 –
Gambling, 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 Products, 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 Products, para. 5.297 (referring to Appellate Body Report, US –
Gasoline, pp. 22-23, DSR 1996:I, p. 21).
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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 within 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 particular 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 measure 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 justified, 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 Report, 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 Report, 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 Reports, 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. omitted)
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 Tyres, paras. 227,
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
WT/DS477/R • WT/DS478/R

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 give 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 focus 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 and, 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 Report,
Colombia – Textiles, para. 5.126.
WT/DS477/R • WT/DS478/R

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 meeting, 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
regulations 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 submission 1734, Indonesia refers to the same legal
instruments as above, adding this time in a footnote 1735 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 regulations, 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 written 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

amendment, as well as other relevant re gulations concerning quarantine and food
safety.1737
7.576. In its oral statement at the second substantive meeting 1738, 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 concerning 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, according 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. 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 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 Indonesia 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 Exhibit 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 written submission, paras. 136-137 (referring to Panel Report, Colombia – Ports
of Entry, para. 7.527; Appellate Body Report, US – Carbon Steel, para. 157; Dominican Republic – Import and
WT/DS477/R • WT/DS478/R

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 Plant 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 remaining 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 Report, 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 of 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 Verification 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 Nutrition; 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 Packaging; 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

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 laws and regulations deal with a vast array of issues, some being
very extensive with numerous articles, as is the case of the Customs Law 1750 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 specific 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-consistent 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 in 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, paras. 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

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 Elaborating 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 outlined 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
compliance 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 concerning 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

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 contribution 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 -restrictiveness 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
compliance", 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.
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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 question 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.
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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 Questions 1779 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 factors 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 written 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 No. 32, paras. 11-12).
1780 Horticultural products listed in Attachment II, MOA 86/2013 (Exhibit 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. 136,
140,142-145, 149, 160, 163; second written submission, para. 244).
WT/DS477/R • WT/DS478/R

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
requirement.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 jurisprudence 1789, 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 written 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' response to Panel question No. 97, para. 72 (referring to its second written
submission, para. 133).
1789 The United States referred to the Appellate Body Reports, 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 Measures 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, para. 73, referring to United States' oral
statement at the second substantive meeting, paras. 65-66; United States' second written submission,
paras. 147-151.
1791 United States' comments on Indonesia's response to Panel question No. 115, referring to its second
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; Indonesia's response to Panel question No. 50, para. 32.
1793 United States' second written submission, paras. 147–152.
WT/DS477/R • WT/DS478/R

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 (Indonesia'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
requirements 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' second written submission, para. 151 (referring to United States' first written
submission, paras. 171-174, 284-287; Exhibits 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 statement at the second substantive meeting, para.
30).
WT/DS477/R • WT/DS478/R

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; even 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 Indonesia'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 that 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 measure. 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 established 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 showed 1811, 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 mitigate 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. 237, referring to Exhibit NZL-73.
1810 New Zealand's second written submission, para. 229, referring to Appellate Body Report, Brazil –
Retreaded Tyres, paras. 150-151.
1811 New Zealand's first written submission at para. 238, referring to Exhibit NZL–39.
1812 New Zealand's second written submission, para. 230, referring to Indonesia's first written
submission, para. 155.
1813 New Zealand's second written submission, paras. 231-232.
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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 elements 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 lend support to such an assertion1816 because: (i) the Food Law is a broad statute that covers
a variety of topics 1817 and the title of Part 5, the text, structure and operation of the import
licensing regimes, and statements by Indonesian officials, all show that this is th e section that is
relevant to Indonesia’s import licensing regimes1818; (ii) while food 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 Chapter 1819;(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, because, 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 food 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 human 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 second 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 second substantive meeting, para. 44; second written
submission, paras. 133, 172; first 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 submission, 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 characterization 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 submission, 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 written submission, para. 172.
1827 Exhibit USA-70.
1828 Exhibit USA-70.
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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 period 1834, 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 oversupply, 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 before 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 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;
…

1829 Exhibits USA-71 and USA-72.
1830 Exhibits USA-13 and USA-14.
1831 United States' second written submission, para. 173.
1832 United States' second written submission, para. 173, referring to Appellate Body 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, referring to its first written submission,
paras. 180-181; Article 5 of MOA 86/2013, Exhibit JE-15; and Exhibits USA-70 and USA-71.
1835 United States' second written submission, para. 174.
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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 Ar ticle 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 analysis 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 Reports, 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 Reports, Korea – Various Measures on Beef, para. 157; Thailand – Cigarettes,
para. 179.
1838 Appellate Body Reports, 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 distinct,
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 the assessment
of these two steps is not entirely disconnected, 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 taking 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 same
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 context 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

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 an 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 of 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 characterization 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 Reports, 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 Reports,
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 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 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 Report, 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

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 whether, 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, whether 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 health 1857, 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, Appellate 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 Indonesia with
respect to Measure 4 does not appear to include food security concerns.
1858 Indonesia's second written submission, paras. 222-223.
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

domestic farmers from import competition. 1861 The United States agreed with New Zealand and
contended 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 the 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 Section2.3.2.4 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 constitutes 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 RIPH 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 health 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. 228 (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

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 harvest 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 overview 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 Measure 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 Agriculture’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; Exhibit IDN-25.
1873 United States' second 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 Indonesian 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,
("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

respective values and changing factors 1877, and to determine the level of protection they deem
appropriate in given situations. 1878 As a predominantly Muslim country 1879, it argues, freedom of
worship is guaranteed 1880, 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 Halal 1883, food is generally
considered Halal unless it is specifically prohibited by the Qur'an. Hence, many foodstuffs are
inherently 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, Indonesia
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 Indonesia 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, pa ra. 6.461; Appellate Body Reports
1878 Indonesia's second written submission, paras. 93 –94 (referring to Appellate Body Report s, Brazil –
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 written submission, paras. 211-212 (referring to Exhibits IDN-44 to IDN-46).
1884 Indonesia's second written submission, paras. 211-212 (referring to Exhibit IDN-70).
1885 Indonesia's second written submission, para. 212.
1886 Exhibit IDN-23.
1887 Indonesia's second written 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 second written submission, para. 214 (referring to Exhibits 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

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 capacity 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 United States' view, the fact that H alal is a public moral is 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 measures 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, the co-complainants have great respect for the observance of H alal and duly comply
with Indonesia’s Halal requirements, including with regards to Halal 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 inaccurate 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 requirements, 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 questions 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 statement at the second substantive meeting, para. 37.
WT/DS477/R • WT/DS478/R

products.1907 By contrast, the entire defence 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
products 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. Concerning 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 , t he 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 and 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. 40 (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

the burden of establishing that the conditions prescribed therein are met. 1913 Therefore, it is
incumbent 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 Article 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. Under 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 on 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 Exhibits 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. 40 (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

identified any relevant Halal requirements for horticultural products, or presented evidence
demonstrating 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 from 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 inquiries about the existence of
Halal requirements applicable to horticultural products, Indonesia only sup plies responses 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,
Indonesia 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
comments 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. 40 (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 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.
1925 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 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 questions Nos. 86 and 116.
1928 "ICWA Halal 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 10,000 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 government 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 different 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 physical condition of
WT/DS477/R • WT/DS478/R

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 originate 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 examined Measure 5 to establish whether such a relationship can be
deduced from its design , including its content, structure, and expected operation. 1936 In our
analysis, we 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 constitutes 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 Assurance, 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
1939 Article 8 of MOT 16/2013, as amended by MOT 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.
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 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 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

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
products 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
mechanisms, 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

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 foodstuffs 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 importers' 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 requirement 1960 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' view 1964 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 & Vegetables,
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 Zealand's second written submission, para. 244.
1956 New Zealand's second written submission, paras. 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, paras. 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

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 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. 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 objective.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 the 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 meat 1971, 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
dispute.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 without 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: rather, it
is common practice under normal market conditions for importers to lease storage capacity 1977;
and importers would generally empty and refill storage space several times over the course of the
semester. Responding to Indonesia's assertion that its measures 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 States' second written submission, paras. 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 written 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 Panel 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 Reports, Brazil –
1976 Article 8(1)(e) MOT 16/2013, as amended, Exhibit JE-21; Exhibit USA-28.
1977 ASEIBSSINDO Letter (Exhibit USA-28).
WT/DS477/R • WT/DS478/R

. 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 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 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

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, the 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 protection of domestic producers from competition
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 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 5, the specific argumentation 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 written submission, para. 148.
1987 New Zealand's second written submission, para. 242 (referring to Appellate Body Report, EC – Seal
Products, para. 5.144). United States' second written submission, paras. 176-177.
1988 Indonesia's second written submission, paras. 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 214).
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 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)").
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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 constitutes 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 conclusion 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
1997 Article 8 of MOT 16/2013, as amended by MOT 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) 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 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 capacity …", Exhibit JE-15.
1999 Exhibit JE-15.
2000 Appellate Body Report, Colombia – Textiles, para. 5.68.
WT/DS477/R • WT/DS478/R

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 requested on Import Applications. 2001 Similarly, Exhibit
IDN-82, which contains certain guidelines to assure maximum quality and minimum spoilage of
fruits and vegetables, 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 enforcement, especially considering Indonesia's limited administrative, 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 customs, 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 argues 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.
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

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 explanation 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 submission,
paras. 187-191).
WT/DS477/R • WT/DS478/R

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 Parties
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 restaurant 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 use, 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 question 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

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 States 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 moral 2029, 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 the 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 written submission, para. 207.
2027 United States' second written submission, paras. 205 (referring to United States' first written
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 (referring 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 explain 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 Regulation 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 Feb. 11, 2016 ,
Exhibit USA-80 (there is no mention of any Halal requirements in either MOT 16/2013 or in SUCOFINDO's
application documents).
WT/DS477/R • WT/DS478/R

to show the connection between the restrictions on imported products and 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
restrictions 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 restrictions 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 submission, 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

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 distributors 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 requirements 2045 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
horticultural 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 standard.
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 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) necessary to protect public morals
 …

2043 United States' second written submission, 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 Auditing and Stipulating Halal Food (Exhibit USA-105)).
2046 United States' second written submission, para. 217.
WT/DS477/R • WT/DS478/R

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 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.
7.3.12.2.3 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 observed 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 consumer deception from non -

2047 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.
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

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 examined Measure 6 to establish whether such a relationship 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 assessment of the design of the measure at issue,
including its content, structure, and expected operation. 2059 We observe that, as described in
Section2.3.2.6 above, Measure 6 consists of the requirements on the importation by PIs and RIs of
listed horticultural products that limit the use, 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 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. 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 constitutes 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
transferring 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 submission, 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 responses 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 amended 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 Articles 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

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
addressing 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 that 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 examined 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 measure 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 47/2013, Exhibit JE-10.
2068 SUCOFINDO, "Horticulture," (updated 11 February 2016), Exhibit USA-80, showing that the relevant
application documents include the company taxpayer ID number, registration card, business license, import
identification number, PI or RI license, and Import Approval 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 out 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

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 producing 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 arises from
freezing, thawing, and refreezing meats. Indonesia maintains that its traditional markets 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.
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/48037L15_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
WT/DS477/R • WT/DS478/R

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 protecting 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 traditional 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 and multiply, but at the
same rate as in fresh meat 2082; 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 irrelevant 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 measure.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 they 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

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 products 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 this 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 health 2092, 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

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
statements 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 safety 2100 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.
7.737. What the co -complainants question is the existence of a relationship between Measure 6
and the protection of human health.2101 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.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 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 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
2097 New Zealand's second written submission, para. 260.
2098 United States' second written submission, para. 182 (referring to Appellate 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;'" and, (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 GATS, 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, paras. 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

sale and distribution of the imported products.2104 Indonesia implements this 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 indicate 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 consumers 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 of 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 carried 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 amended 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 Articles 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 amended 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 substantive meeting
of the Panel, para. 34.
2114 New Zealand's second written submission, para. 260; United States' second written submission,
para. 183.
WT/DS477/R • WT/DS478/R

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 products 2115, 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 Article 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 defences 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 written
submission, para. 160; opening statement at the first meeting of the Panel, para. 34).
WT/DS477/R • WT/DS478/R

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 vague 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 showing 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 States 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
artificially 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 th e 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 Zealand's second written submission, paras. 261.
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 submission, 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

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, w e 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 GATT 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 GATT 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 safety and security plan, and is necessary to
protect human, plant, or animal life or health 2133, 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).
2134 Indonesia's second written submission, para. 197.
2135 Indonesia's response to Panel question No. 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 written 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

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 decree 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 consuming 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
insecurity", "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 prices 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 demand).
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

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, outweighs 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 explaining its objective of "food security" and demonstrating
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
demonstrate 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 argues 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 that Indonesia's own description of its food security plan 2159 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 horticultural 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 question No. 18; Exhibit IDN-78; Exhibit IDN-51; Exhibit IDN-4.
2153 New Zealand's opening statement at the second substantive meeting, para. 81 (referring to Exhibit
NZL-12).
2154 New Zealand's second written submission, para. 273 (referring to its first written submission,
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' response to Panel question 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; Indonesia'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

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 assertion 2163, 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 continuously 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 remaining 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 Whether 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 prices 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 legal 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 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;
…

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 carefully, 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 No. 18; Indonesia's Response to Advanced Panel
question No. 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

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 determine whether Measure 7 (Reference price for chillies
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 that 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 safety 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"

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. 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 measures other
than Measure 7, this is the first instance that the Panel finds specific argumentation from Indonesia defending
a measure as having 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

to protecting local producers rather than ensuring people have safe food. 2176 The United States
agreed with New Zealand 2177 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 security 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 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 prices 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.
2177 United States' response to Panel question No. 122 (referring to paragraph 37 of New Zealand's oral
statement at the first substantive meeting).
2178 United States' response 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 responses 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 Article 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

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 forward 2188, we see no other basis allowing us to
conclude that Measure 7 was designed to protect food safety or food 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 "providing 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 certainty 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 Horticulture 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 objective 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 submission, 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, Colombia – Textiles, para. 5.68.
WT/DS477/R • WT/DS478/R

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 storage 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 why 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 climate, 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 most 2202, and recourse
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 health 2204, 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). According
to Indonesia, 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 second 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

7.781. New Zealand asserts that , e ven 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 products 2208, yet claims that "storage capacity is already available in Indonesia for
importers 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 months 2212, as previously
acknowledged 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 health 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 written 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 first written submission, para. 150); response to Panel question No. 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 slow 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 question 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 60 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 objective).
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

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 months 2223, 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' second 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 safely 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 (referring 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 fruits and
vegetables" and its benefits "have been amply demonstrated").
2227 United States' response to Panel question No. 123, referring to Indonesia's second written
2228 United States' response to Panel question No. 123.
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 Articles 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

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 harvest
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 health 2232,
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 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 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
meeting, para. 33.
2234 Indonesia's first written submission, para. 151.
WT/DS477/R • WT/DS478/R

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 most 2237, and recourse to
controlled atmosphere may modify flavour, composition, nutritional value and quality.2238
7.791. The co-complainants 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
observed 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 not 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 Indonesia, 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, para. 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 written
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 written 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;
Colombia – 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

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 value 2250, 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 value and quality.2252
7.796. The evidence submitted to the Panel shows that certain horticultural products can 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 health.

2248 Exhibit JE-15.
2249 Appellate Body Report, 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; oranges 12 weeks; and
carrots six weeks; Indonesia's opening statement at the second 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 to 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 second substantive
meeting, para. 33.
2257 Appellate Body Report, Colombia – Textiles, para. 5.68.
WT/DS477/R • WT/DS478/R

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 determine 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 safety 2259,
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 measure 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 did 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 did
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 health. 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 means that Indonesia allows for the sale

2258 Appellate Body Report, EC – Seal Products, para. 5.169 (referring to Appellate Body Reports, Korea
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 submission, 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 relative 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

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
regulates 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 amended 2270,
provides that every horticultural product 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 that 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 horticultural 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 argumentation 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
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

assume 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 argued 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 issue 2272 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 Indonesia 2274,
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 label 2278;
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 written 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 do 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
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 –
Shrimp, 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 second 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

exports, as well as domestic transportation2279; concerning subparagraph (d), Indonesia 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 definition …, 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 discrimination.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 recalled 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 laws 2287,
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 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

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 written submission is at para. 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 substantive 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 public 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

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
traditional and other markets. Responding to Indonesia's assertion that domestic products are also
required to have a halal label 2291, 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 under 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 (Measure 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 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
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 example 2297, 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 purpose for
citing the 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. 68 (referring toIndonesia's
second written submission, para. 150 (referring to Article 4 of Law No. 33/2014 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 Indonesia'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

to restrict imports and protect the domestic industry and, therefore, result in arbitrary and
unjustifiable 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 GATT 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 provide 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 carry 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 importers.
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 transportation 2306, 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 the 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

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
requirements 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 participants 2310,
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 meeting, 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 amended 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 market 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

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 the 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 (under 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 Measure 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 resulting 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,
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

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 respect 2317 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 case 2318, 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 sufficient 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 distribution 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 Zealand'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 establishment of the Panel; and MOT 46/2013, as amended,
WT/DS477/R • WT/DS478/R

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
understanding. 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
discrimination 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 Article 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 Article XX
of the GATT 1994, given the absence of a rational connection between the discrimination and the
policy objectives protected 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
determining 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 did 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 New 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' second written submission, 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 – Retreaded Tyres, para. 227.
2326 Appellate Body Report, EC – Seal Products, para. 5.300.
2327 See Appellate Body Reports, 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 submission, para. 308.
WT/DS477/R • WT/DS478/R

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 applied 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 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 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 16 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 from 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 Measures 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

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' ".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 requirement 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 Zealand'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, para. 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

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 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. 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 that 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 submission, 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

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 Zealand 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 opportunity 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 affects 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) and (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 written submission, para. 405 (referring to Article 17 of MOT 46/2013,
Exhibit JE-18 and Article 32 of MOA 139/2014, Exhibit 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 second 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

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 Zealand
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 elsewhere 2360, 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 Article 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 requirement. 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 (referring 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 written 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 Zealand'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

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
Indonesia 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 the
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 Licensing Agreement.2372 Unlike
with their claims under Article 3.2 of the Import Licensing Agreement, the co -complainants have
not provided any supporting argumentation in relation to their claims under Article 2.2(a) of the
Import Licensing Agreement . Accordingly, 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 therefore 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. 421; 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
WT/DS477/R • WT/DS478/R

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 effect
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 Import 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 that, 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 interpretation 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. 425; opening statement at the second substantive
2375 New Zealand's second written submission, para. 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

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 working
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 imposition 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-automatic 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
December, 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 United 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 instruments 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 resources, 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, promote 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 States' 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; United 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 substantive 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

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 apply 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
periods 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, paras. 20 and 23.
2402 Indonesia's first written submission, para. 175.
WT/DS477/R • WT/DS478/R

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 plications, 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
Recommendations 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 argues 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. Indonesia 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 contends 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 Indonesia, 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 requirements 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 applications. Indonesia'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

7.867. Indonesia 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 implement 2413 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 for 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 broad 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 time 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 the 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%. Indonesia'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 written submission, para. 62 (referring to Appellate Body Reports, US –
2422 Indonesia's second written submission, para. 62.
WT/DS477/R • WT/DS478/R

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 required 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 second 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 Article 21.1 of the DSU).
WT/DS477/R • WT/DS478/R

8 CONCLUSIONS AND RECOMMENDATION(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 requests 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 the 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 speak 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. Measures 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

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
Articles 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 respect to New Zealand's claims 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.