2000/296/EC: Commission Decision of 5 April 2000 under the provisions of Council Regulation (EC) No 3286/94 concerning the Chilean prohibition on unloading of swordfish catches in Chilean ports (notified under document number C(2000) 926)
Date: 2000-04-05
Institutions: European Commission
Subjects: Chile, World Trade Organisation, quantity of fish landed, settlement of disputes, trade regulations

18.4.2000

EN

Official Journal of the European Communities

L 96/67

COMMISSION

COMMISSION DECISION

of 5 April 2000

under the provisions of Council Regulation (EC) No 3286/94 concerning the Chilean prohibition on
unloading of swordfish catches in Chilean ports

(notified under document number C(2000) 926)

(2000/296/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 3286/94 of 22
December 1994 laying down Community procedures in the
field of the common commercial policy in order to ensure the
exercise of the Community's rights under international trade
rules, in particular those established under the auspices of the
World Trade Organisation (1), as amended by Regulation (EC)
No 356/95 (2), and in particular Articles 13 and 14 thereof,

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

(1)

(2)

On 26 May 1998 the Commission received a complaint
pursuant to Articles 3 and 4 of Council Regulation (EC)
No 3286/94 (hereafter the ‘Regulation’). The complaint
was lodged by ANAPA (Asociación Nacional de Arma-
dores de Buques Palangreros de Altura — Spanish
national association of owners of deepsea longliners).

The complainant alleged that Chile maintained a prohi-
bition on transhipment and transit of swordfish catches
in Chilean ports and a requirement of a zoo-sanitary
certificate for fishing products which enter the Chilean
territory, whatever their way of entry or their final desti-

(1) OJ L 349, 31.12.1994, p. 71.
(2) OJ L 41, 23.2.1995, p. 3.

(3)

(4)

(5)

(6)

nation, which are respectively inconsistent with Article
V of GATT 1994 and Articles 2(3), 5(4) and (6) of the
WTO Agreement on the Application of Sanitary and
Phytosanitary Measures. On that basis, the complainant
asked the Commission to take the necessary actions to
convince Chile to repeal these measures.

The complaint contained sufficient evidence to justify
the initiation of a Community examination procedure
pursuant to Article 8 of the Regulation. Consequently,
such procedure was initiated on 10 July 1998 (3).

Following the initiation of the examination procedure
the Commission carried out an investigation, which has
led to the conclusions indicated below.

B. FINDINGS REGARDING THE EXISTENCE OF AN

OBSTACLE TO TRADE

The relevant Chilean legislation concerning the prohibi-
tion on unloading of swordfish catches in Chilean ports
is established on the basis of Article 165 of the Chilean
Fishery Law (Ley General de Pesca y Acuicultura), as
consolidated by the Supreme Decree 430 of 28
September 1991.

The investigation revealed that the Chilean legislation
imposes a ban on landing and transit of highly migra-
tory species (such as swordfish) caught inside or outside
the Chilean exclusive economic zone, when these
catches are made in contravention of conservation rules
unilaterally imposed by Chile. These rules apply to
swordfish catches made in inland waters, the territorial
sea or the exclusive economic zone (EEZ) and in the
areas bordering the EEZ. Consequently, the prohibition
applies to swordfish catches made in the bordering areas
to the exclusive economic zone, i.e. outside the exclusive
economic zone.

(3) Notice of

initiation of an examination procedure concerning an
obstacle to trade, within the meaning of Council Regulation (EC) No
3286/94, consisting of trade practices maintained by Chile in rela-
tion to the transit and transhipment of swordfish in Chilean ports
(OJ C 215, 10.7.1998, p. 2).

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Official Journal of the European Communities

18.4.2000

the general aim of
(7) While the Commission shares
conserving swordfish resources,
it considers that any
measures to this end must be taken in a way which least
distorts trade and must not amount
to arbitrary or
unjustifiable discrimination.

(8)

(9)

The relevant Chilean legislation was adopted and the
import prohibition enforced without Chile having
entered into any serious negotiations involving the
Community with the objective of concluding bilateral or
multilateral agreements. In fact, Chile has been nego-
tiating since 1997 an agreement on the conservation of
the living resources in the South Pacific within the
framework of a regional organisation but has not
pursued the possibility of entering into cooperative
arrangements with the Community.

The requirement that WTO members should engage in
serious efforts to negotiate consensual means of protec-
tion and conservation of living marine resources with all
interested members, rather than resorting to unilateral
in ‘United
and discriminatory measures was set out
States import prohibition of certain shrimp and shrimp
products’ (4). As a consequence of Chile's failure to
comply with this requirement and its arbitrary applica-
tion of
investigation
concluded that the application of the Chilean measures
amounts to an unjustifiable and arbitrary discrimination.

its unilateral measures,

the

(10)

The investigation established that the Chilean legislation
prohibits Community fishing vessels from unloading
their swordfish catches in Chilean ports either for the
purpose of landing them for warehousing or for tran-
shipment onto other vessels. This prohibition also
applies in the Chilean territorial sea and exclusive
economic zone and violates the principle of freedom of
transit, established by Article V of GATT 1994.

(11)

In addition, by making unloading in Chilean ports
impossible for swordfish catches made by Community
vessels, the Chilean measures render also impossible the
importation of the affected catches into Chile, which is
contrary to Article XI of GATT 1994.

(12) As regards the requirement for a zoo-sanitary certificate,
the investigation stated that
the Chilean authorities
declared that the legislation that introduced the require-
ment in question (Oficio Circular no 240) was repealed
in November 1991. In consideration of the factual recti-
fication given by the Chilean authorities, the Commis-
sion services did not carry out a more detailed analysis
of the obstacle to trade.

(13) Under these circumstances the Commission considers
that
the complainant's allegation on prohibition of
unloading is well-founded and that the Chilean practices
constitute an obstacle to trade within the meaning of

(4) The Appellate Body report ‘United States — import prohibition of
certain shrimp and shrimp products’ (WT/DS58/AB/R) was adopted
on 12 October 1998, paragraphs 171 and 172.

Article 2(1) of the Regulation, as they are contrary to
Article V and Article XI of GATT 1994.

(14)

The Commission none-the-less considers that reference
to the above legal bases does not rule out recourse to
any other pertinent provision of the WTO Agreement
and of the Agreements annexed to it, which could be of
use in procedures before the WTO.

(15)

C. FINDINGS REGARDING INJURY

The investigation showed that that the Chilean ports are
the most convenient
for transhipment of swordfish
catches made by Community vessels in the South-East
Pacific because of their geographical position, their well-
developed infrastructure and their commercial facilities.
As a consequence, the Chilean prohibition on the tran-
shipment of swordfish obliges the Community vessels to
land or tranship their catches in the ports of other third
countries in the region, which necessitates at least a
six-day trip and cause them injury consisting of:

— costs incurred owing to the deficiencies of other
third country ports compared to Chilean ones,

— additional operational costs for the trip to other

third country ports,

— potential loss of catches during the additional trip

period to other third country ports.

(16)

The Commission concluded that the abovementioned
effects constitute injury within the meaning of Article
2(3) of the Regulation.

(17)

(18)

(19)

D. FINDINGS REGARDING ADVERSE TRADE EFFECTS

The investigation confirmed that the challenged Chilean
the Community fishing vessels to
practices prevent
access third country markets. In particular, Chilean ports
are essential bases for exporting especially fresh sword-
fish, to the United States of America because of the close
commercial relationship in this field between Chile and
the USA.

The prohibition to land the catches and consequently to
use the adjacent airports, prevent
the Community
producers from exporting on the US market, which is
one of the largest market for swordfish in the world,
thus creating adverse trade effects for the Community
producers.

In addition, there are also potential adverse trade effects
to be taken into consideration. In the perspective of
future international cooperation in the South-East Pacific
as provided by the Law of the Seas Convention, the
position of the Community will be weakened by the
limited presence of Community vessels in the area. As a
consequence, it is clearly foreseeable that the impossi-
bility for Community vessels to accede to Chilean ports
is likely to develop into further adverse effects for the
Community.

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Official Journal of the European Communities

L 96/69

Therefore, the Commission concluded that the above-
mentioned effects cause and threaten to cause adverse
trade effects within the meaning of Article 2(4) of the
Regulation.

(26)

(20)

(21)

(22)

E. COMMUNITY INTEREST

It is essential for Community vessels to have access to
international fishing areas and for freedom of transit to
be guaranteed by international rules.

It is in the Community interest that solutions to disputes
involving environmental issues be found via multilater-
ally negotiated measures, which are supportive of both
trade and sustainable development.

(23) Moreover,

is not acceptable that Chile imposes a
it
measure which impedes
the access of Community
vessels to its ports unless such vessels comply with
conservation rules imposed unilaterally. As stated by the
Appellate Body report in ‘United States — Gasoline’ (5)
and further confirmed by the Appellate Body report in
‘United States — import prohibition of certain shrimp
and shrimp products’ (6), WTO members are free to
adopt their own policies aimed at protecting the envir-
onment as long as, in doing so, they fulfil their obliga-
tions and respect the rights of other Members under the
WTO agreements. Chile has not done this in the present
case.

(24)

is of

the utmost

Ensuring that WTO partners fully comply with their
obligations
the
Community, which has committed itself to the same
obligations. It is fundamental for the good functioning
of a multilateral trade system to consistently tackle all
allegedly WTO incompatible practices.

importance

for

In addition, Chile adopted a new decree (Decree 598 of
15 October 1999) that expressly extends the rules in
question to swordfish catches made in the high sea.
Consequently, the prohibition on unloading in Chilean
ports, which previously applied to swordfish catches
made in the exclusive economic zone and in its
bordering areas, now also applies to catches made
anywhere on the high sea.

(27)

In these circumstances, it appears that the interests of
the Community call for initiation of WTO dispute settle-
ment proceedings,

HAS DECIDED AS FOLLOWS:

Article 1

The Chilean prohibition on unloading of

1.
swordfish
catches in Chilean ports appears to be inconsistent with the
obligations of that country under the Marrakesh Agreement
Establishing the World Trade Organisation and constitutes an
‘obstacle to trade’ within the meaning of Article 2(1) of Regula-
tion (EC) No 3286/94.

2.
The Community will initiate dispute settlement proceed-
ings against Chile under the Understanding on the Rules and
Procedures for the Settlement of Disputes and other relevant
WTO provisions with a view to securing removal of
the
obstacle to trade.

Article 2

This Decision shall apply from the day of its publication in the
Official Journal of the European Communities.

F. CONCLUSIONS AND MEASURES TO BE TAKEN

Done at Brussels, 5 April 2000.

(25) Meetings have been held with the relevant Chilean
authorities to discuss this matter aimed at finding an
amicable solution but the Chilean authorities have not
forwarded any proposal which could have formed the
basis of such a solution.

For the Commission

Pascal LAMY

Member of the Commission

(5) The Appellate Body report ‘United States — standards for reformu-
lated and conventional gasoline’ (WT/DS2/AB/R) was adopted on 20
May 1996.

(6) See paragraph 186 of

footnote 4.

the Appellate Body report, referred to in