INDONESIA – IMPORTATION OF HORTICULTURAL PRODUCTS, ANIMALS AND ANIMAL PRODUCTS REQUEST FOR THE ESTABLISHMENT OF A PANEL BY NEW ZEALAND
Document: REQUEST FOR THE ESTABLISHMENT OF A PANEL
Date: 24 March 2015
Document codes: WT/DS477/9
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
REQUEST FOR THE ESTABLISHMENT OF A PANEL BY NEW ZEALAND
The following communication, dated 18 March 2015, from the delegation of New Zealand to the
Chairperson of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

On 8 May 2014, New Zealand requested consultations with the Government of the Republic of
Indonesia ("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
1 and animals and animal products 2 into Indonesia.
New Zealand held consultations with Indone sia on 19 June 2014. Those consultations
unfortunately did not resolve the dispute.

As described below, Indonesia: (a) imposes trade-restrictive import licensing regimes and related
requirements on imports of horticultural products and of animals and animal products; (b) imposes
prohibitions and restrictions on imports of such products; and (c) prohibits and restricts
importation of such products when domestic production is deemed sufficient to fulfill domestic
demand.

I. HORTICULTURAL PRODUCTS
Indonesia imposes prohibitions and restrictions on the importation of horticultural products
through its import licensing regime
3 for horticultural products.

a. Indonesia's Trade-Restrictive Import Licensing Regime
Indonesia's import licensing regime for horticultural products involves at least three distinct
application and approval processes: (1) an Im porter Designation from the Ministry of Trade
("MOT") as a Registered Importer ("RI") or Producer Importer ("PI") of horticultural products; (2)
a horticultural product Import Recommendation ("RIPH")
4 from the Ministry of Agriculture ("MOA");
and (3) an Import Approval from the MOT. Impo rters must apply for and receive each of these
approvals in order to import horticultural products into Indonesia.

1 The relevant Indonesian instruments define horticulture as "all matters relating to fruits, vegetables,
plant medicinal materials, and floriculture" and horticultural products as "all products originating from fresh or
processed horticultural plant." Ministry of Trade (MOT) Regulation 16/2013, Articles 1(1) and 1(2) as amended
by MOT Regulation 47/2013.
2 The relevant Indonesian instruments define animal products as "all materials originating from animal
that are fresh and/or processed for consumption, pharmaceutical, farming, and/or other purposes for fulfilling
the needs and welfare of human." MOT Regulation 46/2013, Article 1(5). This includes "carcasses, meats,
and/or their derivatives." Ministry of Agriculture (MOA) Regulation 139/2014.
3 We use the term "import licensing regime" to refer to the set of requirements and procedures that
must be complied with in order to import products into Indonesia.
4 Rekomendasi Impor Produk Hortikultura.

Indonesia's import licensing regime for horticultural products includes, but is not limited to, the
following trade-restrictive requirements:

• RIPHs and Import Approvals are valid for limited time periods, usually six months.
Importers may apply for RIPHs and Import Approvals only during limited time periods
before the start of each validity period, and Indonesia issues RIPHs and Import
Approvals only at the start of each period. Importers must complete all importations
of horticultural products covered by the RIPHs and Import Approvals issued for a
validity period within that period, i.e., all imported horticultural products must be
shipped, arrive, and clear customs within the period. Indonesia prohibits or restricts
the importation of horticultural products covered by RIPHs and Import Approvals
issued for a previous period.

• When applying for RIPHs and Import Approv als, importers must indicate the specific
products they will import, as well as the quan tity, country of origin, port of entry, and
intended use of such products. Once issued, RIPHs and Import Approvals together
specify the type, quantity, country of origin , port of entry, and use of the products
that each importer may import during the relevant six-month period. Importers are
prohibited or restricted from importing products of a different type, in a greater
quantity, from another country, through a different port, or for a different use than
those specified in their RIPHs and Import Approvals.

• Furthermore, importers are required to import a certain percentage, currently 80
percent, of the quantity of each type of product specified on their Import Approvals for
the applicable six-month period. Importers may have their RI/PI Importer
Designations suspended or revoked if they fail to meet this requirement.

New Zealand understands that the legal instruments through which Indonesia maintains the
measures described above include those in Annex I.

New Zealand considers that the measures described above, when viewed as a single regime and
also when viewed as requirements operating separately or in combination, are inconsistent with
Indonesia's obligations under the following provisions
5:

• Article XI:1 of the GATT 1994 as these measures are "prohibitions or restrictions other
than duties, taxes or other charges" instituted or maintained on the importation of
products into Indonesia.

• Article 4.2 of the Agreement on Agriculture as these measures are "of the kind which
have been required to be converted into ordinary customs duties."

b. Prohibitions and Restrictions on the Im portation of Horticultural Products Made
Effective Through Indonesia's Import Licensing Regime
In addition to the trade-restrictive requirements described above, Indonesia imposes, through its
import licensing regime, the following prohibitions and restrictions on the importation of
horticultural products:

• Importation of certain horticultural products is prohibited or restricted when the
domestic market price of such products falls below a certain reference price set by a

5 To the extent that Indonesia's import licensing regime for horticultural products falls within the scope
of the disciplines of Article 3 of the Import Licensing Agreement, New Zealand considers that the import
licensing requirements and procedures, as described above and as set out in sections I(b) and I(c), would be
inconsistent with Article 3.2 of the Import Licensing Agreement because they have trade-restrictive or trade-
distortive effects additional to those caused by the imposition of the restriction, do not correspond in scope and
duration to any measure they could be implementing, and are more administratively burdensome than
absolutely necessary to implement any such measure. To the extent that Indonesia's import licensing regime
falls within the scope of Article 2 of the Import Licensing Agreement, New Zealand considers that Indonesia's
import licensing requirements and procedures, as described above and as set out in sections I(b) and I(c),
would be inconsistent with Article 2.2(a) of the Import Licensing Agreement because they are administered in
such a manner as to have restricting effects on imports.

ministerial body.6 For instance, RIPHs are issued only if the market price of certain
products remains above a set reference price.

• Indonesia prohibits or restricts the importation of fresh horticultural products for
consumption that were harvested more than six months previously.

• The MOT and MOA limit the type and quantity of horticultural products allowed to be
imported by limiting the types and quantities of products specified in an RIPH or
Import Approval.

New Zealand understands that the legal instruments through which Indonesia maintains these
measures include those in Annex I.

New Zealand considers that the measures described above, when viewed as elements of
Indonesia's import licensing regime and also when viewed as distinct measures, are inconsistent
with Indonesia's obligations under the following provisions:

• Article XI:1 of the GATT 1994 as these measures are "prohibitions or restrictions other
than duties, taxes or other charges" instituted or maintained on the importation of
products into Indonesia.

• Article 4.2 of the Agreement on Agriculture as these measures are "of the kind which
have been required to be converted into ordinary customs duties."

c. Prohibitions and Restrictions on Importat ion Relating to the Use, Sale, Offering for
Sale, Distribution, Storage, or Transporta tion of Imported Horticultural Products
Made Effective Through Indonesia's Import Licensing Regime
Indonesia also imposes, through its import licensing regime, the following prohibitions and
restrictions on the importation of horticultural products that relate to the use, sale, offering for
sale, distribution, storage, or transportation of imported products:

• RIs are permitted to import horticultural prod ucts only for sale to distributors and are
prohibited from importing such products for sale directly to consumers or retailers.

• PIs are prohibited from importing horticultural products other than as materials for
industrial production processes and are prohibited from trading or transferring any
excess products.

If importers fail to comply with these requirements, they are subject to sanction by revocation of
their RI or PI Importer Designation, and ineligibility for a future Importer Designation for two
years.

• Further, as a condition of being able to import horticultural products into Indonesia,
importers are required to own storage facilities and means of transport for imported
horticultural products.

New Zealand understands that the legal instruments through which Indonesia maintains these
measures include those in Annex I.

New Zealand considers that the measures described above, when viewed as elements of
Indonesia's import licensing regime and also when viewed as distinct measures, are inconsistent
with Indonesia's obligations under the following provisions:

• Article XI:1 of the GATT 1994 as these measures are "prohibitions or restrictions other
than duties, taxes or other charges" instituted or maintained on the importation of
products into Indonesia.
7

6 These products currently are listed in Article 14B of MOT Regulation 16/2013, as amended by MOT
Regulation 47/2013.
7 To the extent that these measures are measures affecting the internal sale, offering for sale, purchase,
transportation, distribution or use of products, New Zealand considers that they would be inconsistent with
Article III:4 of the GATT 1994 because Indonesia does not impose similar limitations on the internal sale,

• Article 4.2 of the Agreement on Agriculture as these measures are "of the kind which
have been required to be converted into ordinary customs duties."

II. ANIMALS AND ANIMAL PRODUCTS
Indonesia imposes prohibitions and restrictions on the importation of animals and animal products
through its import licensing regime for animals and animal products.

a. Indonesia's Trade-Restrictive Import Licensing Regime
Indonesia's import licensing regime for animals and animal products involves at least three distinct
application and approval processes: (1) an Importer Designation from the MOT for animals and
animal products; (2) an animal and animal products Import Recommendation from the MOA; and
(3) an Import Approval from the MOT. Import ers must apply for and receive each of these
approvals in order to import covered animals and animal products into Indonesia.

Indonesia's import licensing regime for animals and animal products includes, but is not limited to,
the following trade-restrictive requirements:

• Recommendations and Import Approvals are valid for limited time periods.
Recommendations are valid, at the latest, up to the end of the current year, and
Import Approvals are valid for three-month periods. Importers may apply for
Recommendations and Import Approvals only during limited time periods before the
start of each validity period, and Indonesia issues these documents only at the start of
each period. Importers must complete all importations of animals and animal
products covered by the Recommendations and Import Approvals within a given
validity period, i.e., all imports must be shipped, arrive, and clear customs within the
period for which the associated Import Approval is valid. Indonesia prohibits or
restricts the importation of animals and animal products covered by Recommendations
and Import Approvals issued for a previous period.

• When applying for Recommendations and Import Approvals, importers must indicate
the specific products they will import, as well as the quantity, country of origin, port of
entry, and intended use of such products. Once issued, Recommendations and Import
Approvals together specify the type, quantity, country of origin, port of entry, and use
of the products that each importer may import during the relevant three-month
period. Importers are prohibited or restricted from importing products of a different
type, in a greater quantity, from another country, through a different port, or for a
different use than those specified in their Recommendations and Import Approvals.

• Furthermore, importers are required to import, on a yearly basis, a certain
percentage, currently 80 percent, of the quanti ty of each type of product specified on
their Import Approvals. Importers may have their Importer Designations,
Recommendations, and/or Import Approvals suspended or revoked if they fail to meet
this requirement.

New Zealand understands that the legal instruments through which Indonesia maintains the
measures described above include those in Annex II.

New Zealand considers that the measures described above, when viewed as a single regime and
also when viewed as requirements operating separately or in combination, are inconsistent with
Indonesia's obligations under the following provisions
8:

offering for sale, purchase, transportation, storage, distribution and use of like domestic products and,
therefore, Indonesia's laws, regulations and requirements accord less favourable treatment to imported
products than like domestic products.
8 To the extent that Indonesia's import licensing regime for animals and animal products falls within the
scope of the disciplines of Article 3 of the Import Licensing Agreement, New Zealand considers that the import
licensing requirements and procedures, as described above and as set out in sections II(b) and II(c), would be
inconsistent with Article 3.2 of the Import Licensing Agreement because they have trade-restrictive or trade-
distortive effects additional to those caused by the imposition of the restriction, do not correspond in scope and
duration to any measure they could be implementing, and are more administratively burdensome than

• Article XI:1 of the GATT 1994 as these measures are "prohibitions or restrictions other
than duties, taxes or other charges" instituted or maintained on the importation of
products into Indonesia.

• Article 4.2 of the Agreement on Agriculture as these measures are "of the kind which
have been required to be converted into ordinary customs duties."

b. Prohibitions and Restrictions on the Importation of Animals and Animal Products
Made Effective Through Indonesia's Import Licensing Regime
In addition to the trade-restrictive requirements described above, Indonesia imposes, through its
import licensing regime, the following prohibitions and restrictions on the importation of animals
and animal products:

• Indonesia prohibits or restricts the importation of those covered animals and animal
products not listed in the appendices to relevant import regulations, including all
bovine offal products (except some cuts of tongue and tail), all secondary beef cuts
(inter alia beef blade, knuckles, chuck, inside round and outside round), all bovine
carcass, and poultry parts.
9

• With respect to certain types of animal products, importation is only permitted on the
condition that importing entities have "absorbed" meat from local slaughter houses.

• The MOT and the MOA limit the type and quan tity of animal products allowed to be
imported by limiting the types and qu antities of products specified in a
Recommendation or Import Approval.
10

• Importation of certain animal products is prohibited or restricted when the domestic
market price of such products falls below a specified reference price set by a
ministerial body.
11

New Zealand understands that the legal instruments through which Indonesia maintains these
measures include those in Annex II.

New Zealand considers that the measures described above, when viewed as elements of
Indonesia's import licensing regime and also when viewed as distinct measures, are inconsistent
with Indonesia's obligations under the following provisions:

• Article XI:1 of the GATT 1994 as these measures are "prohibitions or restrictions other
than duties, taxes or other charges" instituted or maintained on the importation of
products into Indonesia.
12

• Article 4.2 of the Agreement on Agriculture as these measures are "of the kind which
have been required to be converted into ordinary customs duties."

absolutely necessary to implement any such measure. To the extent that Indonesia's import licensing regime
falls within the scope of Article 2 of the Import Licensing Agreement, New Zealand considers that Indonesia's
import licensing requirements and procedures, as described above and as set out in sections II(b) and II(c),
would be inconsistent with Article 2.2(a) of the Import Licensing Agreement, because they are administered in
such a manner as to have restricting effects on imports.
9 Currently, all covered animals and animal products not listed in the appendices of both MOA
Regulation 139/2014 and MOT Regulation 46/2013 are banned from importation.
10 See, e.g., Article 28 of MOA Regulation 139/2014 (stating that the quantity of animal product
specified in a Recommendation is set by the Ministry of Trade).
11 These products currently include the secondary cuts of the animal products listed in Appendix I of
MOT Regulation 46/2013.
12 To the extent that the absorption requirement is a measure affecting the internal sale, offering for
sale, purchase, transportation, distribution or use of products, New Zealand considers that it would be
inconsistent with Article III:4 of the GATT 1994 because it accords less favourable treatment to imported
products than to like domestic products.

c. Prohibitions and Restrictions on Importat ion Relating to the Use, Sale, Offering for
Sale, Distribution, Storage, or Transpor tation of Imported Animals and Animal
Products Made Effective Through Indonesia's Import Licensing Regime
Indonesia also imposes, through its import licensing regime, the following restrictions on the
importation of animals and animal products that relate to the use, sale, offering for sale,
distribution, storage or transportation of imported products:

• Indonesia prohibits or restricts the importation of certain animals and animal products
for certain uses and for distribution and sale through certain channels. For example,
the importation of certain bovine products is only permitted for use in hotels,
restaurants, catering and industry and for other special purposes. Importation of
bovine products for sale directly to consumers at modern and traditional markets,
which are the primary consumer retail channels for bovine products in Indonesia, is
also restricted or prohibited.
13

• As a condition of being able to import animals and animal products into Indonesia,
importers are required to own storage facilities and means of transport for imported
animals and animal products.

New Zealand understands that the legal instruments through which Indonesia maintains these
measures include those in Annex II.

New Zealand considers that the measures described above, when viewed as elements of
Indonesia's import licensing regime and also when viewed as distinct measures, are inconsistent
with Indonesia's obligations under the following provisions:

• Article XI:1 of the GATT 1994 as these measures are "prohibitions or restrictions other
than duties, taxes or other charges" instituted or maintained on the importation of
products into Indonesia.
14

• Article 4.2 of the Agreement on Agriculture as these measures are "of the kind which
have been required to be converted into ordinary customs duties."

III. PROHIBITIONS AND RESTRICTIONS ON AGRICULTURAL PRODUCTS BASED ON THE
SUFFICIENCY OF DOMESTIC PRODUCTION TO FULFILL DOMESTIC DEMAND
Indonesia prohibits or restricts the importation of horticultural products when domestic production
is deemed sufficient to fulfill domestic demand.

New Zealand understands that the legal instruments through which Indonesia maintains this
measure are:

• Law of the Republic of Indonesia Number 13 of Year 2010 Concerning Horticulture;

• Law of the Republic of Indonesia Number 18/2012 Concerning Food; and

• Law of the Republic of Indonesia Number 19/2013 Concerning Protection and
Empowerment of Farmers.

as well as any amendments, replacements, related measures, or implementing measures.

Indonesia prohibits or restricts the importation of animals and animal products when domestic
production is deemed sufficient to fulfill domestic demand.

13 These products currently are listed in Appendix I of MoA 139/2014 and Appendix I of MoT 46/2013.
14 To the extent that these measures are measures affecting the internal sale, offering for sale,
purchase, transportation, distribution or use of products, New Zealand considers that they would be
inconsistent with Article III:4 of the GATT 1994 because Indonesia does not impose similar limitations on the
internal sale, offering for sale, purchase, transportation, storage, distribution and use of like domestic products
and, therefore, Indonesia's laws, regulations and requirements accord less favourable treatment to imported
products than to like domestic products.

New Zealand understands that the legal instruments through which Indonesia maintains this
measure are:

• Law of the Republic of Indonesia Number 18/2009 on Animal Husbandry and Animal
Health, as amended by Law of the Repu blic of Indonesia Number 41/2014 on
Amendment of Law Number 18/2009 on Animal Husbandry and Animal Health;

• Law of the Republic of Indonesia Number 18/2012 Concerning Food; and

• Law of the Republic of Indonesia Number 19/2013 Concerning Protection and
Empowerment of Farmers.

as well as any amendments, replacements, related measures, or implementing measures.

New Zealand considers that the measures describ ed above are inconsistent with Indonesia's
obligations under the following provisions:

• Article XI:1 of the GATT 1994 as this measure is a "prohibition or restriction other
than duties, taxes or other charges" instituted or maintained on the importation of
products into Indonesia.

• Article 4.2 of the Agreement on Agriculture as this measure is "of the kind which have
been required to be converted into ordinary customs duties."

Therefore, New Zealand respectfully requests, purs uant to Article 6 of the DSU, that the Dispute
Settlement Body establish a panel to examine this matter, with standard terms of reference as set
out in Article 7.1 of the DSU. As the United Stat es is also requesting the establishment of a panel
related to the same matter, New Zealand further respectfully requests, pursuant to Article 9.1 of
the DSU, that the Dispute Settlement Body establish a single panel to examine both complaints.

Annex I

New Zealand understands that the legal instruments through which Indonesia maintains the
measures set out in Part I of the Panel Request include
15:

• Regulation of the Ministry of Agriculture Number 86/Permentan/OT.140/8/2013
Concerning Import Recommendation of Horticulture Products ("MOA Regulation
86/2013"), which repeals and replaces Regulation of the Minister of Agriculture
Number 47/Permentan/OT.140/4/2013 Concerning Recommendation on the
Importation of Horticulture Products, which repealed and replaced Regulation of the
Minister of Agriculture Number 60/Permentan/OT.140/9/2012;
• Regulation of the Minister of Trade Number 16/M-DAG/PER/4/2013 Concerning
Provisions on Horticulture Product Import ("MOT Regulation 16/2013"), which repeals
and replaces Regulation of the Minister of Trade Number 30/M-DAG/PER/5/2012
Concerning the Provisions on Import of Horticultural Products and Regulation of the
Minister of Trade Number 60/M-DAG/PER/ 9/2012 Regarding Second Amendment of
Regulation of the Minister of Trad e Number 30/M-DAG/PER/5/2012 Regarding
Provisions on Import of Horticultural Products; and
• Regulation of the Ministry 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
Concerning Import Provision of Horticulture Product ("MOT Regulation 47/2013").
as well as any amendments, replacements, related measures, or implementing measures.

15 New Zealand understands that the regulations listed were promulgated pursuant to the framework set
out in the following laws:
 Law of the Republic of Indonesia Number 13 of Year 2010 Concerning Horticulture;
 Law of the Republic of Indonesia Number 18/2012 Concerning Food; and
 Law of the Republic of Indonesia Number 7 of Year 2014 Concerning Trade.

Annex II

New Zealand understands that the legal instruments through which Indonesia maintains the
measures set out in Part II of the Panel Request include
16:

• Regulation of the Ministry of Agri culture Number 139/Permentan/PD.410/12/2014
("MOA Regulation 139/2014") Regarding Importation of Carcass, Meat, and/or Its
Derivatives into the Territory of the Repub lic of Indonesia as amended by Regulation
of the Ministry of Agriculture Number 02/Permentan/PD.410/1/2015 Concerning
Amendment of Regulation of the Ministry of Agriculture Number
139/Permentan/PD.410/12/2014 Regarding Importation of Carcass, Meat, and/or Its
Derivatives into the Territory of the Republic of Indonesia, which repealed and
replaced Regulation of the Ministry of Agriculture Number
84/Permentan/PD.410/8/2013 Concerning Importation of Carcass, Meat, Offal and/or
Their Derivatives into the Territory of th e Republic of Indonesia as amended by
Regulations of the Ministry of Ag riculture 96/Permentan/PD.410/9/2013 and
Regulations of the Ministry of Agricu lture 110/Permentan/PD.410/9/2014, which
repeals and replaces Regulation of the Minister of Agriculture Number
50/Permentan/OT.140/9/2011 Concerning Recommendation for Approval on Import of
Carcasses, Meats, Edible Offals and/or Processed Products Thereof to Indonesian
Territory as amended by Regulation of the Minister of Agriculture Number
63/Permentan/OT.140/5/2013 Concerning Amendment of Regulation of the Minister of
Agriculture Number 50/Permentan/OT.140/9/2011 Concerning Import Approval
Recommendation of Carcass, Meat, Offal, and/or their Derivatives into the Territory of
the Republic of Indonesia; and
• Regulation of the Minister of Trade Number 46/M-DAG/PER/8/2013 Concerning Animal
and Animal Product Import and Export Provision ("MOT Regulation 46/2013") as
amended by Regulation of the Minister of Trade No. 57/M-DAG/PER/9/2013 and by
Regulation of the Minister of Trade 17/M-DAG/PER/3/2014, which repeals and replaces
Regulation of the Minister of Trade Number 22/M-DAG/PER/5/2013 Concerning Import
and Export of Animals and Animal Products, which repealed and replaced Regulation
of the Minister of Trade Number 24/M-DAG/PER/9/2011 Concerning Provisions on the
Import and Export of Animal and Animal Product.
as well as any amendments, replacements, related measures, or implementing measures.