Document: WT/DS26/AB/R WT/DS48/AB/R Page 69 imposing this measure does not benefit from the presumption of consistency set up in Article 3.2; but, as earlier observed, the Member is not penalized by exemption of a complaining Member from the normal burden of showing a prima facie case of inconsistency with Article 3.1 or any other relevant article of the SPS Agreement or of the GATT 1994.
Document codes: WT/DS26/AB/R; WT/DS48/AB/R
Complainant: U.S.
Respondent: EU
Third parties: Australia, Canada, New Zealand, Norway
Dispute stage: Implementation & Compliance
Agreements cited: Art. III, XI  GATT 1994Art. 2  Technical Barriers to Trade (TBT)Art. 4  AgricultureArt. 2, 3, 5  Sanitary and Phytosanitary Measures (SPS)

imposing this measure does not benefit from the presumption of consistency set up in Article 3.2;
but, as earlier observed, the Member is not penalized by exemption of a complaining Member from
the normal burden of showing a prima facie case of inconsistency with Article 3.1 or any other relevant
article of the SPS Agreement or of the GATT 1994.

172. Under Article 3.3 of the SPS Agreement, a Member may decide to set for itself a level of
protection different from that implicit in the international standard, and to implement or embody that
level of protection in a measure not "based on” the international standard. The Member’s appropriate
level of protection may be higher than that implied in the international standard. The right of a Member
to determine its own appropriate level of sanitary protection is an important right. This is made clear

in the sixth preambular paragraph of the SPS Agreement:

Members,

Desiring to further the use of harmonized sanitary and
phytosanitary measures between Members, onthe basis of international

standards, guidelines and recommendations developed by the relevant
international organizations, including the Codex Alimentarius

Commission, the International Office of Epizootics, and the relevant
international and regional organizations operating within the framework
of the International Plant Protection Convention, without requiring

Members to change their appropriate level of protection of human,
animal or plant life or health; (underlining added)

As noted earlier, this right of a Member to establish its own level of sanitary protection under Article 3.3
of the SPS Agreement is an autonomous right and not an "exception" from a "general obligation" under
Article 3.1.

C. The Requirements of Article 3.3 of the SPS Agreement

173. The right of a Member to define its appropriate level of protection is not, however, an absolute

or unqualified right. Article 3.3 also makes this clear:

Members may introduce or maintain sanitary or phytosanitary
measures which result in a higher level of sanitary or phytosanitary
protection than would be achieved by measures based on the relevant
international standards, guidelines or recommendations, if there is a
scientific justification, or as a consequence of the level of sanitary or

phytosanitary protection a Member determines to be appropriate in
accordance with the relevant provisions of paragraphs 1 through 8 of
Article 5.2 Notwithstanding the above, all measures which result in
a level of sanitary or phytosanitary protection different from that which
would be achieved by measures based on international standards,
guidelines or recommendations shall not be inconsistent with any other
provision of this Agreement.

For the purposes of paragraph 3 of Article 3, there is a scientific justification if, on
the basis of an examination and evaluation of available scientific information in
conformity with the relevant provisions of this Agreement, a Member determines that
the relevant international standards, guidelines or recommendations are not sufficient
to achieve its appropriate level of sanitary or phytosanitary protection.

174. The European Communities argues that there are two situations covered by Article 3.3 and
that its SPS measures are within the first of these situations.’ It is claimed that the European
Communities has maintained SPS measures "which result in a higher level of ... protection than would
be achieved by measures based on the relevant" Codex standard, guideline or recommendation, for
which measures "there is a scientific justification" .* It is also, accordingly, argued that the requirement
of a risk assessment under Article 5.1 does not apply to the European Communities. At the same time,

it is emphasized that the EC measures have satisfied the requirements of Article 2.2.'°

175. Article 3.3 is evidently not a model of clarity in drafting and communication. The use of the
disjunctive "or" does indicate that two situations are intended to be covered. These are the introduction

or maintenance of SPS measures which result in a higher level of protection:

(a) "if there is a scientific justification"; or
(b) "as a consequence of the level of ... protection a Member determines to be appropriate

in accordance with the relevant provisions of paragraphs 1 through 8 of Article 5".

It is true that situation (a) does not speak of Articles 5.1 through 5.8. Nevertheless, two points
need to be noted. First, the last sentence of Article 3.3 requires that "all measures which result
in a [higher] level of ... protection", that is to say, measures falling within situation (a) as well as

those falling within situation (b), be "not inconsistent with any other provision of [the SPS]

'S7EC’s appellant’s submission, paras. 240-244.
'S8SPS Agreement, Article 3.3.

Agreement". "Any other provision of this Agreement" textually includes Article 5. Secondly, the
footnote to Article 3.3, while attached to the end of the first sentence, defines "scientific justification"
as an “examination and evaluation of available scientific information in conformity with relevant

"

provisions of this Agreement ...". This examination and evaluation would appear to partake of the
nature of the risk assessment required in Article 5.1 and defined in paragraph 4 of Annex A of the

SPS Agreement.

176. On balance, we agree with the Panel’s finding that although the European Communities has
established for itself a level of protection higher, or more exacting, than the level of protection implied
in the relevant Codex standards, guidelines or recommendations, the European Communities was bound
to comply with the requirements established in Article 5.1. We are not unaware that this finding tends
to suggest that the distinction made in Article 3.3 between two situations may have very limited effects
and may, to that extent, be more apparent than real. Its involved and layered language actually leaves

us with no choice.

177. Consideration of the object and purpose of Article 3 and of the SPS Agreement as a
whole reinforces our belief that compliance with Article 5.1 was intended as a countervailing factor
in respect of the right of Members to set their appropriate level of protection. In generalized terms,
the object and purpose of Article 3 is to promote the harmonization of the SPS measures of Members
on as wide a basis as possible, while recognizing and safeguarding, at the same time, the right and
duty of Members to protect the life and health of their people. The ultimate goal of the harmonization
of SPS measures is to prevent the use of such measures for arbitrary or unjustifiable discrimination
between Members or as a disguised restriction on international trade, without preventing Members
from adopting or enforcing measures which are both "necessary to protect" human life or health and
"pased on scientific principles", and without requiring them to change their appropriate level of
protection. The requirements of a risk assessment under Article 5.1, as well as of "sufficient scientific
evidence" under Article 2.2, are essential for the maintenance of the delicate and carefully negotiated
balance in the SPS Agreement between the shared, but sometimes competing, interests of promoting
international trade and of protecting the life and health of human beings. We conclude that the Panel’s
finding that the European Communities is required by Article 3.3 to comply with the requirements
of Article 5.1 is correct and, accordingly, dismiss the appeal of the European Communities from that

ruling of the Panel.

XI. The Reading of Articles 5.1 and 5.2 of the SPS Agreement: Basing SPS Measures on a
Risk Assessment

178. | Weturn to the appeal of European Communities from the Panel’s conclusion that, by maintaining
SPS measures which are not based on a risk assessment, the European Communities acted inconsistently

with the requirements contained in Article 5.1 of the SPS Agreement.
179. Article 5.1 of the SPS Agreement provides:

Members shall ensure that their sanitary or phytosanitary measures

are based on an assessment, as appropriate to the circumstances, of
the risks to human, animal or plant life or health, taking into account

risk assessment techniques developed by the relevant international
organizations. (underlining added)

A. The Interpretation of "Risk Assessment"

180. Atthe outset, two preliminary considerations need to be brought out. The first is that the Panel
considered that Article 5.1 may be viewed as a specific application of the basic obligations contained
in Article 2.2 of the SPS Agreement'’®, which reads as follows:

Members shall ensure that any sanitary or phytosanitary measure is
applied only to the extent necessary to protect human, animal or plant
life or health, is based on scientific principles and is not maintained
without sufficient scientific evidence, except as provided for in
paragraph 7 of Article 5. (underlining added)

Weagree with this general consideration and would also stress that Articles 2.2 and 5.1 should constantly
be read together. Article 2.2 informs Article 5.1: the elements that define the basic obligation set
out in Article 2.2 impart meaning to Article 5.1.

181. The second preliminary consideration relates to the Panel’s effort to distinguish between "risk

assessment” and "risk management”. The Panel observed that an assessment of risk is, at least with

respect to risks to human life and health, a "scientific" examination of data and factual studies; it is

not, in the view of the Panel, a "policy" exercise involving social value judgments made by political
bodies.'*' The Panel describes the latter as "non-scientific" and as pertaining to "risk management"
rather than to "risk assessment".'** We must stress, in this connection, that Article 5 and Annex A
of the SPS Agreement speak of "risk assessment” only and that the term "risk management" is not to
be found either in Article 5 or in any other provision of the SPS Agreement. Thus, the Panel’s
distinction, which it apparently employs to achieve or support what appears to be a restrictive notion
of risk assessment, has no textual basis. The fundamental rule of treaty interpretation requires a treaty
interpreter to read and interpret the words actually used by the agreement under examination, and not

words which the interpreter may feel should have been used.
1. Risk Assessment and the Notion of "Risk"

182. Paragraph 4 of Annex A of the SPS Agreement sets out the treaty definition of risk assessment:
This definition, to the extent pertinent to the present appeal, speaks of:

... the evaluation of the potential for adverse effects on human or
animal health arising from the presence of additives, contaminants,

toxins or disease-causing organisms in food, beverages or feedstuffs.
(underlining added)

183. Interpreting the above definition, the Panel elaborates risk assessment as a two-step process
that "should (i) identify the adverse effects on human health (if any) arising from the presence of the
hormones at issue when used as growth promoters in meat ..., and (ii) if any such adverse effects exist,

evaluate the potential or probability of occurrence of such effects” .'?

184. The European Communities appeals from the above interpretation as involving an erroneous
notion of risk and risk assessment. Although the utility of a two-step analysis may be debated, it does
not appear to us to be substantially wrong. What needs to be pointed out at this stage is that the Panel’s

use of "probability" as an alternative term for "potential" creates a significant concern. The ordinary

meaning of "potential" relates to "possibility" and is different from the ordinary meaning of
"probability".!“ "Probability" implies a higher degree or a threshold of potentiality or possibility.

It thus appears that here the Panel introduces a quantitative dimension to the notion of risk.

185. In its discussion on a statement made by Dr. Lucier at the joint meeting with the experts in
February 1997'©, the Panel states the risk referred to by this expert is an estimate which "... only
represents a statistical range of 0 to 1 ina million, not a scientifically identified risk". The European
Communities protests vigorously that, by doing so, the Panel is in effect requiring a Member carrying

out a risk assessment to quantify the potential for adverse effects on human health.'”

186. It is not clear in what sense the Panel uses the term “scientifically identified risk". The Panel
also frequently uses the term "identifiable risk"'*, and does not define this term either. The Panel
might arguably have used the terms "scientifically identified risk" and "identifiable risk" simply to
refer to an ascertainable risk: if a risk is not ascertainable, how does a Member ever know or
demonstrate that it exists? In one part of its Reports, the Panel opposes a requirement of an "identifiable
risk" to the uncertainty that theoretically always remains since science can never provide absolute
certainty that a given substance will not ever have adverse health effects.” We.agree with the Panel
that this theoretical uncertainty is not the kind of risk which, under Article 5.1, is to be assessed.
In another part of its Reports, however, the Panel appeared to be using the term "scientifically identified
risk" to prescribe implicitly that a certain magnitude or threshold level of risk be demonstrated in a
risk assessment if an SPS measure based thereon is to be regarded as consistent with Article 5.1.”
To the extent that the Panel purported to require a risk assessment to establish a minimum magnitude
of risk, we must note that imposition of such a quantitative requirement finds no basis in the

SPS Agreement. A panel is authorized only to determine whether a given SPS measure is "based on"

‘The dictionary meaning of "potential" is "that which is possible as opposed to actual; a possibility"; L. Brown (ed.),
The New Shorter Oxford English Dictionary on Historical Principles, Vol. 2, p. 2310 (Clarendon Press, 1993). In contrast,
“probability” refers to "degrees of likelihood; the appearance of truth, or likelihood of being realized", and "a thing judged
likely to be true, to exist, or to happen"; Jd., p. 2362.

‘Para, 819 of the Annex to the US and Canada Panel Reports.
'6U§ Panel Report, footnote 331; Canada Panel Report, footnote 437.
'67EC’s appellant’s submission, paras. 392-397.

'8UJS Panel Report, paras. 8.124, 8.134, 8.136, 8.151, 8.153, 8.161, 8.162; Canada Panel Report, paras. 8.127, 8.137,
8.139, 8.154, 8.156, 8.164, 8.165.

‘US Panel Report, paras. 8.152-8.153; Canada Panel Report, paras. 8.155-8.156
'°UJ§ Panel Report, footnote 331; Canada Panel Report, footmote 437.

a risk assessment. As will be elaborated below, this means that a panel has to determine whether an

SPS measure is sufficiently supported or reasonably warranted by the risk assessment.

2. Factors to be Considered in Carrying Out a Risk Assessment

187. Article 5.2 of the SPS Agreement provides an indication of the factors that should be taken

into account in the assessment of risk. Article 5.2 states that:

In the assessment of risks, Members shall take into account
available scientific evidence; relevant processes and production
methods; relevant inspection, sampling and testing methods;
prevalence of specific diseases or pests; existence of pest- or disease-
free areas; relevant ecological and environmental conditions; and
quarantine or other treatment.

The listing in Article 5.2 begins with "available scientific evidence"; this, however, is only the
beginning. We note in this connection that the Panel states that, for purposes of the EC measures in
dispute, a risk assessment required by Article 5.1 is "a scientific process aimed at establishing the
scientific basis for the sanitary measure a Member intends to take".’”' To the extent that the Panel
intended to refer to a process characterized by systematic, disciplined and objective enquiry and analysis,
that is, amode of studying and sorting out facts and opinions, the Panel’s statement is unexceptionable.!”
However, to the extent that the Panel purports to exclude from the scope of a risk assessment in the
sense of Article 5.1, all matters not susceptible of quantitative analysis by the empirical or experimental
laboratory methods commonly associated with the physical sciences, we believe that the Panel is in
error. Some of the kinds of factors listed in Article 5.2 such as "relevant processes and production
methods" and “relevant inspection, sampling and testing methods" are not necessarily or wholly
susceptible of investigation according to laboratory methods of, for example, biochemistry or
pharmacology. Furthermore, there is nothing to indicate that the listing of factors that may be taken
into account in a risk assessment of Article 5.2 was intended to be a closed list. It is essential to bear

in mind that the risk that is to be evaluated in a risk assessment under Article 5.1 is not only risk

'2"The ordinary meaning of ‘scientific’, as provided by dictionary definitions, includes ‘of, relating to, or used in science’,
‘broadly, having or appearing to have an exact, objective, factual, systematic or methodological basis’, ‘of, relating to, or
exhibiting the methods or principles of science’ and ‘of, pertaining to, using, or based on the methodology of science’.
Dictionary definitions of ‘science’ include ‘the observation, identification, description, experimental investigation, and theoretical
explanation of natural phenomena’, ‘any methodological activity, discipline, or study’, and ‘knowledge attained through study
or practice’". (footnotes omitted) United States’ Statement of Administrative Action, Uruguay Round Agreements Act, 203d
Congress, 2d Session, House Document 103-316, Vol. 1, 27 September 1994, p. 90.

ascertainable in a science laboratory operating under strictly controlled conditions, but also risk inhuman
societies as they actually exist, in other words, the actual potential for adverse effects on human health

in the real world where people live and work and die.

B. The Interpretation of "Based On"

1. A "Minimum Procedural Requirement” in Article 5.1?

188. Although it expressly recognizes that Article 5.1 does not contain any specific procedural
requirements for a Member to base its sanitary measures on a risk assessment, the Panel nevertheless
proceeds to declare that "there is a minimum procedural requirement contained in Article 5.1". That
requirement is that "the Member imposing a sanitary measure needs to submit evidence that at least
it actually took into account a risk assessment when it enacted or maintained its sanitary measure in
order for that measure to be considered as based on a risk assessment". The Panel goes on to state
that the European Communities did not provide any evidence that the studies it referred to or the scientific
conclusions reached therein "have actually been taken into account by the competent EC institutions
either when it enacted those measures (in 1981 and 1988) or at any later point in time" .'“ (emphasis
added) Thereupon, the Panel holds that such studies could not be considered as part of a risk assessment
on which the European Communities based its measures in dispute. Concluding that the European
Communities had not met its burden of proving that it had satisfied the "minimum procedural
requirement" it had found in Article 5.1, the Panel holds the EC measures as inconsistent with the

requirements of Article 5.1.

189. Weare bound to note that, as the Panel itself acknowledges, no textual basis exists in Article 5
of the SPS Agreement for such a "minimum procedural requirement". The term "based on", when
applied as a "minimum procedural requirement" by the Panel, may be seen to refer to a human action,
such as particular human individuals "taking into account" a document described as a risk assessment.
Thus, "take into account" is apparently used by the Panel to refer to some subjectivity which, at some
time, may be present in particular individuals but that, in the end, may be totally rejected by those
individuals. We believe that "based on" is appropriately taken to refer to a certain objective relationship

between two elements, that is to say, to an objective situation that persists and is observable between

an SPS measure and a risk assessment. Such a reference is certainly embraced in the ordinary meaning
of the words "based on" and, when considered in context and in the light of the object and purpose
of Article 5.1 of the SPS Agreement, may be seen to be more appropriate than “taking into account".
We do not share the Panel’s interpretative construction and believe it is unnecessary and an error of

law as well.

190. Article 5.1 does not insist that a Member that adopts a sanitary measure shall have carried
out its own risk assessment. It only requires that the SPS measures be “based on an assessment, as
appropriate for the circumstances ...". The SPS measure might well find its objective justification
in a risk assessment carried out by another Member, or an international organization. The "minimum
procedural requirement” constructed by the Panel, could well lead to the elimination or disregard of
available scientific evidence that rationally supports the SPS measure being examined. This risk of
exclusion of available scientific evidence may be particularly significant for the bulk of SPS measures
which were put in place before the effective date of the WTO Agreement and that have been simply

maintained thereafter.

191. Inthe course of demanding evidence that EC authorities actually "took into account” certain
scientific studies, the Panel refers to the preambles of the EC Directives here involved. The Panel
notes that such preambles did not mention any of the scientific studies referred to by the European
Communities in the panel proceedings. Preambles of legislative or quasi-legislative acts and
administrative regulations commonly fulfil requirements of the internal legal orders of WTO Members.
Such preambles are certainly not required by the SPS Agreement; they are not normally used to
demonstrate that a Member has complied with its obligations under international agreements. The
absence of any mention of scientific studies in the preliminary sections of the EC Directives does not,

therefore, prove anything so far as the present case is concerned.

2. Substantive Requirement of Article 5.1 - Rational Relationship Between an
SPS Measure and a Risk Assessment

192. Having posited a "minimum procedural requirement" of Article 5.1, the Panel turns to the
"substantive requirements” of Article 5.1 to determine whether the EC measures at issue are "based
on" a risk assessment. In the Panel’s view, those "substantive requirements" involve two kinds of
operations: first, identifying the scientific conclusions reached in the risk assessment and the scientific

conclusions implicit in the SPS measures; and secondly, examining those scientific conclusions to

determine whether or not one set of conclusions matches, i.e. conforms with, the second set of
conclusions.’ Applying the "substantive requirements" it finds in Article 5.1, the Panel holds that
the scientific conclusions implicit in the EC measures do not conform with any of the scientific

conclusions reached in the scientific studies the European Communities had submitted as evidence.!”

193. We consider that, in principle, the Panel’s approach of examining the scientific conclusions
implicit in the SPS measure under consideration and the scientific conclusion yielded by a risk assessment
is a useful approach. The relationship between those two sets of conclusions is certainly relevant;
they cannot, however, be assigned relevance to the exclusion of everything else. We believe that
Article 5.1, when contextually read as it should be, in conjunction with and as informed by Article 2.2
of the SPS Agreement, requires that the results of the risk assessment must sufficiently warrant -- that
is to say, reasonably support -- the SPS measure at stake. The requirement that an SPS measure be
"based on" a risk assessment is a substantive requirement that there be a rational relationship between

the measure and the risk assessment.

194. | We do not believe that a tisk assessment has to come to a monolithic conclusion that coincides
with the scientific conclusion or view implicit in the SPS measure. The risk assessment could set out
both the prevailing view representing the "mainstream" of scientific opinion, as well as the opinions
of scientists taking a divergent view. Article 5.1 does not require that the risk assessment must
necessarily embody only the view of a majority of the relevant scientific community. In some cases,
the very existence of divergent views presented by qualified scientists who have investigated the particular
issue at hand may indicate a state of scientific uncertainty. Sometimes the divergence may indicate
a roughly equal balance of scientific opinion, which may itself be a form of scientific uncertainty.
In most cases, responsible and representative governments tend to base their legislative and administrative
measures on "mainstream" scientific opinion. In other cases, equally responsible and representative
governments may act in good faith on the basis of what, at a given time, may be a divergent opinion
coming from qualified and respected sources. By itself, this does not necessarily signal the absence
of a reasonable relationship between the SPS measure and the risk assessment, especially where the
risk involved is life-threatening in character and is perceived to constitute a clear and imminent threat

to public health and safety. Determination of the presence or absence of that relationship can only