WT/DS484/R/Add.

17 October 2017

(17-5515) Page: 1/96

Original: English

INDONESIA – MEASURES CONCERNING THE IMPORTATION OF

CHICKEN MEAT AND CHICKEN PRODUCTS

REPORT OF THE PANEL

Addendum

This addendum contains Annexes A to C to the Report of the Panel to be found in document
WT/DS484/R.

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LIST OF ANNEXES

ANNEX A

WORKING PROCEDURES FOR THE PANEL

Contents Page
Annex A-1 Working Procedures for the Panel A-2

ANNEX B

ARGUMENTS OF THE PARTIES

Contents Page
Annex B-1 Integrated executive summary of the arguments of Brazil B-2
Annex B-2 Integrated executive summary of the arguments of Indonesia B-27

ANNEX C

ARGUMENTS OF THE THIRD PARTIES

Contents
Annex C-1 Executive summary of the arguments of Argentina C-2
Annex C-2 Executive summary of the arguments of Australia C-8
Annex C-3 Executive summary of the arguments of Canada C-11
Annex C-4 Executive summary of the arguments of the European Union C-15
Annex C-5 Executive summary of the arguments of Japan C-17
Annex C-6 Executive summary of the arguments of New Zealand C-20
Annex C-7 Executive summary of the arguments of Norway C-25
Annex C-8 Executive summary of the arguments of Paraguay C-27
Annex C-9 Executive summary of the arguments of Qatar C-28
Annex C-10 Executive summary of the arguments of the United States C-30
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ANNEX A

WORKING PROCEDURES FOR THE PANEL

Contents Page
Annex A-1 Working Procedures for the Panel A-2
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ANNEX A-1

WORKING PROCEDURES FOR THE PANEL

Adopted on 16 March 2016

1. In its proceedings, the Panel shall follow the relevant provisions of the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU). In addition, the following Working
Procedures shall apply.

General

2. The deliberations of the Panel and the documents submitted to it shall be kept confidential
except as communicated in the Panel report. Nothing in the DSU or in these Working Procedures
shall preclude a party to the dispute (hereafter "party") from disclosing statements of its own
positions to the public. Members shall treat as confidential information submitted to the Panel by
another Member which the submitting Member has designated as confidential. Where a party
submits a confidential version of its written submissions to the Panel, it shall also, upon request of
a Member, provide a non-confidential summary of the information contained in its submissions
that could be disclosed to the public.

3. Upon indication from any party, at the latest on the first substantive meeting, that it shall
provide information that requires protection additional to that provided for under these Working
Procedures, the Panel shall, after consultation with the parties, decide whether to adopt
appropriate additional procedures. Exceptions to this procedure shall be granted upon a showing of
good cause.

4. The Panel shall meet in closed session. The parties, and Members having notified their interest
in the dispute to the Dispute Settlement Body in accordance with Article 10 of the DSU (hereafter
"third parties"), shall be present at the meetings only when invited by the Panel to appear
before it.

5. Each party and third party has the right to determine the composition of its own delegation
when meeting with the Panel. Each party and third party shall have the responsibility for all
members of its own delegation and shall ensure that each member of such delegation acts in
accordance with the DSU and these Working Procedures, particularly with regard to the
confidentiality of the proceedings.

Submissions

6. Before the first substantive meeting of the Panel with the parties, each party shall submit a
written submission in which it presents the facts of the case and its arguments, in accordance with
the timetable adopted by the Panel. Each party shall also submit to the Panel, prior to the second
substantive meeting of the Panel, a written rebuttal, in accordance with the timetable adopted by
the Panel.

7. A party shall submit any request for a preliminary ruling at the earliest possible opportunity
and in any event no later than in its first written submission to the Panel. If Brazil requests such a
ruling, Indonesia shall submit its response to the request in its first written submission. If
Indonesia requests such a ruling, Brazil shall submit its response to the request prior to the first
substantive meeting of the Panel, at a time to be determined by the Panel in light of the request.
Exceptions to this procedure shall be granted upon a showing of good cause.

8. Each party shall submit all factual evidence to the Panel no later than during the first
substantive meeting, except with respect to evidence necessary for purposes of rebuttal, answers
to questions or comments on answers provided by the other party. Exceptions to this procedure
shall be granted upon a showing of good cause. Where such exception has been granted, the Panel
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shall accord the other party a period of time for comment, as appropriate, on any new factual
evidence submitted after the first substantive meeting.

9. Where the original language of exhibits is not a WTO working language, the submitting party or
third party shall submit a translation into the WTO working language of the submission at the
same time. The Panel may grant reasonable extensions of time for the translation of such exhibits
upon a showing of good cause. Any objection as to the accuracy of a translation should be raised
promptly in writing, no later than the next filing or meeting (whichever occurs earlier) following
the submission which contains the translation in question. Any objection shall be accompanied by a
detailed explanation of the grounds of objection and an alternative translation. Thereafter, the
Panel will rule as promptly as possible on any objection to the accuracy of a translation.

10. In order to facilitate the work of the Panel, each party and third party is invited to make its
submissions in accordance with the WTO Editorial Guide for Panel Submissions attached as
Annex 1, to the extent that it is practical to do so.

11. To facilitate the maintenance of the record of the dispute and maximize the clarity of
submissions, each party and third party shall sequentially number its exhibits throughout the
course of the dispute. For example, exhibits submitted by Brazil could be numbered BRA-1, BRA-2,
etc. If the last exhibit in connection with the first submission was numbered BRA-5, the first
exhibit of the next submission thus would be numbered BRA-6.

Questions

12. The Panel may at any time pose questions to the parties and third parties, orally or in writing,
including prior to each substantive meeting.

Expert consultation

13. Consistent with Article 13 of the DSU, Article 14.2 of the TBT Agreement and Article 11.2 of
the SPS Agreement, the Panel may seek expert advice from experts and from international
organizations, as appropriate. In the course of the proceedings, and at the latest two weeks after
the first written submission is received, the Parties should inform the Panel whether they consider
that the Panel should consult with scientific or technical experts. Should the Panel decide to
consult experts, it shall adopt additional working procedures.

Substantive meetings

14. Each party shall provide to the Panel the list of members of its delegation in advance of each
meeting with the Panel and no later than 5.00 p.m. the previous working day.

15. The first substantive meeting of the Panel with the parties shall be conducted as follows:

a. The Panel shall invite Brazil to make an opening statement to present its case first.
Subsequently, the Panel shall invite Indonesia to present its point of view. Before each
party takes the floor, it shall provide the Panel and other participants at the meeting
with a provisional written version of its statement. In the event that interpretation is
needed, each party shall provide additional copies to the interpreters. Each party shall
make available to the Panel and the other party the final version of its statement,
preferably at the end of the meeting, and in any event no later than 5.00 p.m. on the
first working day following the meeting.

b. After the conclusion of the statements, the Panel shall give each party the opportunity to
ask each other questions or make comments, through the Panel. Each party shall have
an opportunity to orally answer these questions. Each party shall send in writing, within
a timeframe to be determined by the Panel, any questions to the other party to which it
wishes to receive a response in writing. Each party shall be invited to respond in writing
to the other party's questions within a deadline to be determined by the Panel.

c. The Panel may subsequently pose questions to the parties. Each party shall then have an
opportunity to answer these questions orally. The Panel shall send in writing, within a
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timeframe to be determined by it, any questions to the parties to which it wishes to

receive a response in writing. Each party shall be invited to respond in writing to such
questions within a deadline to be determined by the Panel.

d. Once the questioning has concluded, the Panel shall afford each party an opportunity to
present a brief closing statement, with Brazil presenting its statement first.

e. The Panel may, after consultation with the parties, set time limits for the opening
statements; such time limits would be informed to the parties before the first
substantive meeting.

16. The second substantive meeting of the Panel with the parties shall be conducted as follows:

a. The Panel shall ask Indonesia if it wishes to avail itself of the right to present its case
first. If so, the Panel shall invite Indonesia to present its opening statement, followed by
Brazil. If Indonesia chooses not to avail itself of that right, the Panel shall invite Brazil to
present its opening statement first. Before each party takes the floor, it shall provide the
Panel and other participants at the meeting with a provisional written version of its
statement. In the event that interpretation is needed, each party shall provide additional
copies to the interpreters. Each party shall make available to the Panel and the other
party the final version of its statement, preferably at the end of the meeting, and in any
event no later than 5.00 p.m. of the first working day following the meeting.

b. After the conclusion of the statements, the Panel shall give each party the opportunity to
ask questions or make comments, through the Panel. Each party shall then have an
opportunity to answer these questions orally. Each party shall send in writing, within a
timeframe to be determined by the Panel, any questions to the other party to which it
wishes to receive a response in writing. Each party shall be invited to respond in writing
to the other party's questions within a deadline to be determined by the Panel.

c. The Panel may subsequently pose questions to the parties. Each party shall then have an
opportunity to answer these questions orally. The Panel shall send in writing, within a
timeframe to be determined by it, any questions to the parties to which it wishes to
receive a response in writing. Each party shall be invited to respond in writing to such
questions within a deadline to be determined by the Panel.

d. Once the questioning has concluded, the Panel shall afford each party an opportunity to
present a brief closing statement, with the party that presented its opening statement
first, presenting its closing statement first.

Third parties

17. The Panel shall invite each third party to transmit to the Panel a written submission prior to
the first substantive meeting of the Panel with the parties, in accordance with the timetable
adopted by the Panel.

18. Each third party shall also be invited to present its views orally during a session of this first
substantive meeting, set aside for that purpose. Each third party shall provide to the Panel the list
of members of its delegation in advance of this session and no later than 5.00 p.m. the previous
working day.

19. The third-party session shall be conducted as follows:

a. All third parties may be present during the entirety of this session.

b. The Panel shall first hear the arguments of the third parties in alphabetical order. Third
parties present at the third-party session and intending to present their views orally at
that session, shall provide the Panel, the parties and other third parties with provisional
written versions of their statements before they take the floor. In the event that
interpretation is needed, each third party shall provide additional copies to the
interpreters. Third parties shall make available to the Panel, the parties and other third
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parties the final versions of their statements, preferably at the end of the session, and in
any event no later than 5.00 p.m. of the first working day following the session.

c. After the third parties have made their statements, the parties may be given the
opportunity, through the Panel, to ask the third parties questions for clarification on any
matter raised in the third parties' submissions or statements. Each party shall send in
writing, within a timeframe to be determined by the Panel, any questions to a third party
to which it wishes to receive a response in writing. Each third party shall be invited to
respond in writing to these questions within a deadline to be determined by the Panel.

d. The Panel may subsequently pose questions to the third parties. Each third party shall
then have an opportunity to answer these questions orally. The Panel shall send in
writing, within a timeframe to be determined by it, any questions to the third parties to
which it wishes to receive a response in writing. Each third party shall be invited to
respond in writing to such questions within a deadline to be determined by the Panel.

Descriptive part

20. The description of the arguments of the parties and third parties in the descriptive part of the
Panel report shall consist of the executive summaries provided by the parties and third parties,
which shall be annexed as addenda to the report. These executive summaries shall not in any way
serve as a substitute for the submissions of the parties and third parties in the Panel's examination
of the case.

21. Each party shall submit an integrated executive summary of the facts and arguments as
presented to the Panel in its written submissions and oral statements, in accordance with the
timetable adopted by the Panel. This summary may also include a summary of responses to
questions. The integrated executive summary shall not exceed 30 pages. The Panel will not
summarize in the descriptive part of its report, or annex to its report, the parties' responses to
questions.

22. Each third party shall submit an executive summary of its arguments as presented in its
written submission and statement in accordance with the timetable adopted by the Panel. This
summary may also include a summary of responses to questions, where relevant. The executive
summary to be provided by each third party shall not exceed 6 pages.

Interim review

23. Following issuance of the interim report, each party may submit a written request to review
precise aspects of the interim report and request a further meeting with the Panel, in accordance
with the timetable adopted by the Panel. The right to request such a meeting shall be exercised no
later than at the time the written request for review is submitted.

24. In the event that no further meeting with the Panel is requested, each party may submit
written comments on the other party's written request for review, in accordance with the timetable
adopted by the Panel. Such comments shall be limited to commenting on the other party's written
request for review.

25. The interim report, as well as the final report prior to its official circulation, shall be kept
strictly confidential and shall not be disclosed.

Service of documents

26. The following procedures regarding service of documents shall apply:

a. Each party and third party shall submit all documents to the Panel by filing them with
the DS Registry (office No. 2047).

b. Each party and third party shall file 4 paper copies of all documents it submits to the
Panel. Exhibits may be filed in 4 copies on CD-ROM, DVD, or USB stick and 3 paper
copies. The DS Registrar shall stamp the documents with the date and time of the filing.
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The paper version shall constitute the official version for the purposes of the record of
the dispute.

c. Each party and third party shall also provide an electronic copy of all documents it
submits to the Panel at the same time as the paper versions, preferably in Microsoft
Word format, either on a CD-ROM, a DVD, a USB stick or as an e-mail attachment. If the
electronic copy is provided by e-mail, it should be addressed to DSRegistry@wto.org,
with a copy to ****.****@wto.org, ****.****@wto.org, ****.****@wto.org,
****.****@wto.org, and ****.****@wto.org. If a CD-ROM, DVD, or USB stick is
provided, it shall be filed with the DS Registry.

d. Each party shall serve any document submitted to the Panel directly on the other party.
Each party shall, in addition, serve on all third parties its written submissions in advance
of the first substantive meeting with the Panel. Each third party shall serve any
document submitted to the Panel directly on the parties and all other third parties. Each
party and third party shall confirm, in writing, that copies have been served as required
at the time it provides each document to the Panel.

e. Each party and third party shall file its documents with the DS Registry and serve copies
on the other party (and third parties where appropriate) by 5.00 p.m. (Geneva time) on
the due dates established by the Panel. A party may submit its documents to another
party in electronic format only. With respect to third parties, a party or third party may
submit its documents in electronic format only, unless a third party requests in writing to
receive paper copies.

f. The Panel shall provide the parties with an electronic version of the descriptive part, the
interim report and the final report, as well as of other documents as appropriate. When
the Panel transmits to the parties or third parties both paper and electronic versions of a
document, the paper version shall constitute the official version for the purposes of the
record of the dispute.

27. The Panel reserves the right to modify these procedures as necessary, after consultation with
the parties. The Panel will annex to its report these procedures.

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ANNEX B

ARGUMENTS OF THE PARTIES

Contents Page
Annex B-1 Integrated executive summary of the arguments of Brazil B-2
Annex B-2 Integrated executive summary of the arguments of Indonesia B-27
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ANNEX B-1

INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF BRAZIL

I. INTRODUCTION AND FACTUAL BACKGROUND

1. For the past years Indonesia has implemented layer-upon-layer of a complex and intricate
trade regulation that imposes several restrictions on the importation of Brazilian chicken meat and
chicken products. First of all, not all types of chicken meat and chicken products are allowed to be
imported into the country. Secondly, Indonesia prioritizes domestic food production and national
food reserve over imports, as well as restricts imports to cases in which there are "shortages" in
the domestic production. Thirdly, no imports are authorized for other uses than those previously
allowed by the Indonesian legislation (hotels, restaurants, catering, industries, and other particular
purposes), what means that imported products are not allowed in "wet markets" (traditional
markets), which are estimated to correspond to 70% of the poultry market in Indonesia. Fourthly,
Indonesia adopts a complex, non-transparent and arbitrary import licensing regime, which unduly
restricts imports. Fifthly, Indonesia never presented any explanation for the ongoing delay of 7
years to undertake and complete the sanitary procedures required to import chicken meat and
chicken products into Indonesia. As a matter of fact, the combined effects of these different trade,
sanitary, and import licensing measures impose a general ban on Brazilian exports of chicken meat
and chicken products.

2. The products at issue in this dispute are referred by the following HS codes of the Gallus
Domesticus species, as follows: 02.07. Meat and edible offal, of the poultry of heading 01.05,
fresh, chilled or frozen - Of fowls of the species Gallus domesticus: 0207.11 (Not cut in pieces,
fresh or chilled); 0207.12 (Not cut in pieces, frozen); 0207.13 (Cuts and offal, fresh or chilled);
0207.14 (Cuts and offal, frozen) and 16.02 Other prepared or preserved meat, meat offal or blood
- Of poultry of heading 01.05: 1602.32 (Of fowls of the species Gallus domesticus).

3. Since 2009, Brazil has attempted through different channels to obtain access to the
Indonesian market without success. Between 2009 and 2011, the private sectors of both countries
tried to negotiate the sale of mechanically deboned chicken meat, but the required authorizations
were never granted by the Indonesian authorities. In parallel, Brazil and Indonesia discussed the
market access of Brazilian exports in several meetings of the Consultative Committee of
Agriculture (CCA). In the Third Meeting of the CCA, on 4-5 May 2009, Brazil officially presented a
proposal of health certificate for fresh poultry meat and for turkey and duck based on the
guidelines of the OIE Terrestrial Code, but no official answer was ever received from the
Indonesian Government. Also, during the Fourth Meeting of the CCA, on 15-16 September 2010,
the Indonesian authorities indicated that they would evaluate the "possibility of opening" the
chicken market. However, they pointed out that Indonesia was "self-sufficient" in these products
(chicken), and therefore they would "prioritize" the imports of turkey and duck meat, which were
never allowed as well. On the occasion, Brazilian authorities were informed that a sanitary
inspection mission would be sent to the country, but it never happened nor any justification was
given as to the reason the mission was not sent.

4. Brazil raised several Specific Trade Concerns (STCs) in the WTO SPS Committee over the
past years regarding the Indonesian restrictive legislation and failure to grant access to Brazilian
exports of chicken meat and chicken products. Indonesia has never provided a satisfactory and
WTO-consistent answer to Brazil's concerns. In light of this, in July 2014, Brazil presented a formal
request for information based on Article 5.8 of the SPS Agreement. Indonesia limited itself to point
out to several Indonesian legislations that would apply to imports of animal products. It did not
present any sanitary reasons not to approve the health Certificates and not to send an inspection
mission to Brazil. It also confirmed that no risk assessment for the Brazilian chicken meat and
chicken products had ever been made. According to Indonesia, the "delay" (actually an absence of
response) for the approval of the Veterinary Health Certificate was due to an allegedly Brazilian
failure "to comply with the existing procedures and technical regulations" related to halal
information.
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5. Indonesia's import regime for chicken meat and chicken products is established by the
application of several laws, decrees and regulations, which are grounded on the basic premise that
imports of chicken meat and chicken products shall only take place when the domestic supply is
not sufficient. For the purpose of this Executive Summary, and considering that the pieces of
legislation will be analyzed below, Brazil will not list them here.

6. Brazil calls the Panel's attention, however, to Indonesia's continuous changes and
amendments to its legislation in a manner that suggests a strategy to turn this litigation into a
pursuit of a moving target. This poses particular problems. First, it may compromise the Member's
ability to challenge the measures as the respondent could try to evade its obligations by simply
modifying the pertaining legislation. Second, it may affect what the Panel understands as its terms
of reference. In this regard, Brazil submits that the matter before the Panel refers to "measures"
and not to the legislation itself. The matter before the Panel covers the legal situation (i.e. the
measures and its legal basis) identified by Brazil at its panel's request. The Panel is thus required
to take into account the legal framework prevailing on the date of the establishment of the Panel,
as well as any amendment introduced afterwards that affect this legal situation. This is particularly
important in this case, because the changes have not served to correct the inconsistencies of
Indonesian measures but rather to maintain the very same measures under a different guise,
adding new layers of restrictiveness to this already extremely restrictive trade regime. It is to
avoid this threat of legal insecurity when dealing with the so-called moving target that panels are
required to primarily decide on the matter contained in the panel request, and, in light of the
prospective relevance of its report in terms of implementation, to also evaluate the modifications
occurred thereafter.

II. PRELIMINARY RULING REQUEST

7. With regard to Indonesia's preliminary ruling request, Brazil has demonstrated that its Panel
request observed the obligations under Article 6.2 of the DSU On the issue of the Panel's terms of
reference, Brazil demonstrated that the general prohibition described in Brazil's FWS preserves the
same prohibitive nature and essence as the one identified in the panel request and is clearly within
the scope of the Panel's terms of reference. Likewise, it was clearly established that all the
products at issue in the dispute were properly identified in the panel request. The HS code used in
both the panel request and in the FWS is exactly the same and corresponds in the official website
of the World Customs Organization to "other prepared or preserved meat, meat offal or blood (of
fowls of the species Gallus domesticus).

8. Regarding Indonesia import licensing regime Brazil contended that in its panel request, it
had addressed the restrictions and prohibitions laid out by the Indonesian import licensing regime,
and identified that, as such, the regime is not consistent with Indonesia's commitments under the
WTO. Finally, Brazil confirmed that it did not make any claim under Article 1 of the Agreement on
Import Licensing. Brazil only addresses Article 1 in its FWS for the purpose of contextualization, as
Article 1 informs both automatic import licensing (Article 2) and non-automatic import licensing
(Article 3).

III. MEASURES AT ISSUE

(1) The general prohibition on the importation of chicken meat and chicken products

9. Brazil considers that the combined interaction of several different individual measures
challenged in the present dispute constitute an overarching measure that is, on its own, a violation
of the Covered Agreements, regardless of the specific impact of each of its constitutive elements.
As such, it should be scrutinized by the Panel independently of and in addition to the analysis of
claims regarding individual measures as "part of a holistic analysis", as indicated by the Appellate
Body in Argentina – Import Measures. Even if one of the specific measures could be justified under
WTO law, which could hardly be the case, the combined effects of the individual measures would
still result in restrictive policies inconsistent with the Covered Agreements.

10. Brazil highlighted that all the individual measures at stake in the current dispute were
conceived to implement an official trade policy based on the overriding objective of restricting
imports to protect domestic production. As the Appellate Body has recognized in Argentina -
Import Measures, when different measures are framed for the fulfillment of a single overriding
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objective, the combined operation of these measures can be considered a single, self-standing
measure whose consistency with the WTO agreements must be carefully scrutinized in order to
effectively solve the dispute.

11. Indonesia has put in place a set of measures which resulted in a de jure and a de facto
prohibition on the importation of chicken meat and chicken products from Brazil. These measures
are founded on the premise that the importation of animal products should be made only if
domestic production was insufficient to fulfill the needs for the people's consumption. This
restrictive overarching framework operates through the combined effect of several measures, as
follows:

 Prohibition on the importation of types of chicken meat and chicken products which are not
included in Indonesia's positive list of permitted imports, as explained below;

 Requirement related to the "insufficiency of local production", to be defined under the

discretion of the Indonesian authorities: According to Law 18/2009 (Article 36(4)), "import
of animal or livestock and animal product from overseas shall be made if domestic animal
products and supply of livestock is insufficient to fulfill the need for the people
consumption". Also Law 18/2012 (Article 36) clearly indicates that in the case of "staple
food", which encompasses chicken meat and chicken products, Indonesia's Government
should always prioritize domestic food production over food imports that should only be
authorized as an exception. Thus, the lack of "sufficiency" of local production is currently a
"requirement" for the importation of animal or livestock and animal products to Indonesia;

 Additional restrictions regarding the importation of essential and strategic goods, which
include chicken meat and chicken products. According to Article 25(1) of Law 7/2014,
Indonesia shall control the availability of essential goods in adequate quantities, of good
quality, and at affordable prices. The control of prices and quantities is also implemented
in accordance with Article 26(3) of Law 7/2014, should Indonesian authorities understand
that imports may affect the national production of strategic goods. The large margin of
discretion of Indonesian authorities to confer a different treatment to imported chicken
meat and chicken products, including prohibitions and/or restrictions to their importation in
order to prioritize domestic products, is one of the major concerns of Brazil. This measure
not only causes a high degree of unpredictability to international trade flows, but it also
virtually allows Indonesian authorities to impede importation at any time, and for no
specific reason;

 Restrictions on the use of imported chicken meat and chicken products, restricting the
commercial opportunities for exporters to Indonesia, as explained below;

 Intricate and restrictive procedures for import licensing in Indonesia, which create
unnecessary obstacles to trade, prohibiting the importation of chicken meat and chicken
products, as explained below;

 Undue delay in the undertaking of the sanitary procedures required to allow Brazilian
exports of chicken meat and chicken products into Indonesia, as explained below.

12. The combined effects of the different Indonesian trade, licensing and sanitary measures
impose a general ban on Brazilian exports of chicken meat and chicken products and have
impeded Brazilian exports of the products at issue over the past seven years in a manner
inconsistent with Indonesia's obligations. This general ban derives from and is implemented
through the combined operation of several written regulations and procedures (and one omission,
relating to the undue delay in examining and approving Brazil's proposal for a health certificate)
conceived for the fulfillment of a single overriding objective – to protect Indonesia's domestic
poultry industry – that is enshrined in Indonesia's legislation itself. Of particular relevance in this
regard is Law 18/2009 ("Law on Husbandry and Animal Health"), whose Article 36(4) provides that
imports of animal or animal products should only be authorized if domestic animal products and
"supply or livestock are insufficient to fulfil the needs for the people's consumption".

13. There is no doubt that the self-sufficiency policy is the overriding objective of Indonesia's
unwritten ban on the importation of chicken meat and chicken products. Indeed, it is clear that
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this policy is the "glue", to use an expression coined by a third party that binds together all the
individual components of the general ban and informs its implementation. Furthermore, in its
current formulation, self-sufficiency is also an important component of the general measure, as it
consists of a mandatory requirement that has to be applied by Indonesian authorities before
imports are authorized. For instance, Law 18/2009 specifically provides in Article 36(4) that
"import of animal or livestock and animal product from overseas shall be made if domestic animal
products and supply or livestock is insufficient to fulfil the need for the people consumption".

14. During the panel's proceedings, Indonesia argued that Brazil has not met the threshold to
demonstrate a causal link between the lack of chicken imports from Brazil and the import ban. It
also argued that self-sufficiency is only a general principle governing its laws and regulations which
has not had any practical effect on the importation of chicken into Indonesia. Based on these
arguments, Indonesia insisted that Brazil has not demonstrated the existence of the general
measure.

15. Yet contrary to what Indonesia argues self-sufficiency is not simply a general objective
within its legal framework with no practical effect. It is reflected in multiple Indonesian laws and
regulations, permeates the formulation of all Indonesia's agricultural policies and has banned any
kind of imports, not only from Brazil but from any other Member, at least since the enactment of
Law 18/2009. The same policy is reinforced in other relevant legislation related to chicken imports,
like Law 18/2012 (Article 36). Although the mentioned legal texts are sufficient to confirm that
self-sufficiency should not be viewed solely as a "general principle", Brazil has submitted other
pieces of evidence that shows that the self-sufficiency is indeed operative and has very noticeable
trade effects. Finally, self-sufficiency has nothing to do with food security. In reality, the effects
arising from this policy are quite the opposite: reduced access to food (chicken, in this case) and
higher prices.

16. More importantly, Brazil has clearly demonstrated that most of the constitutive elements of
the General ban are described in written legal acts adopted by Indonesia, including the self-
sufficiency policy objective of the import ban. This substantially reduces the evidentiary threshold
borne by the complainant to demonstrate the existence of the challenged measure. In the current
dispute, these legal acts, in conjunction with the undue delay, provide enough evidence of the
existence of the measure. Brazil also clarified how these different elements operate together and,
combined, result in an unwritten import ban. This ban operates either to decrease the market
opportunities for imported chicken or to increase the costs and risks for exporters that intend to
access the market, forming a thick, virtually impenetrable barrier to imports of any amount of
chicken meat and chicken products from any source in the world.

17. Brazil asks the Panel to make specific findings on the overarching measure in addition to
those related to the individual restrictions. Each individual measure identified by Brazil remains a
matter of concern and Brazil expects the Panel to make specific findings on them. However,
although a finding of inconsistency on the individual measures may solve specific trade concerns, it
would not dismantle the import ban system as whole, which is the main issue in this dispute. In
terms of implementation, Indonesia could simply change the instruments through which the import
ban is made effective. The fact that Indonesia's legislation is frequently modified suggests that this
outcome is likely to happen.

(2) Prohibition on imports of chicken cuts and other prepared or preserved chicken
meat ("positive list")

18. MoA Regulation 58/2015 establishes in Articles 7 and 8 that "the types of non-cattle carcass
and the processed product thereof … that can be imported are included in Appendix II ...", which
only contemplates HS codes for chicken "not cut in pieces, fresh or chilled and frozen". This is also
the case for MoT 05/2016, whose Article 7(2) establishes that the "types of animals and animal
products that can be imported are listed in Annex II, III and IV which is an integral part of this
regulation". Annex IV makes references to HS codes for chicken "not cut in pieces, fresh or chilled
and frozen". Thus, as the HS codes for the other products at issue are not described in those
appendices, they cannot be imported into Indonesia.

19. Although Indonesia had argued the positive list no longer exists, as changes were introduced
in this requirement by MoA Regulation 34/2016, MoT Regulation 05/2016 and MoT Regulation
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37/2016, MoA Regulation 34/2016 and MoT Regulation 37/2016 still contain a list of animals and
animal products that can be imported into Indonesia. HS Codes for chicken cuts and other
prepared or preserved chicken meat are still not in the Annexes of both regulations. If the positive
list requirement had been in fact terminated, there would be no need to have a list of products in
the annexes of both Regulations in the first place. The fact that this list remains in force and that
the relevant HS codes for the products at issue in this dispute are not included therein is in itself
reliable evidence that the positive list requirement is still in place. Moreover, the fact that the
importation of those products "may" be authorized under conditions which are not clear – that is,
safe, healthy, wholesome, and halal – makes importation even more cumbersome and
unpredictable. This uncertainty in itself is a restriction.

(3) Restrictions on the use of imported products ("intended use")

20. The intended use requirement was provided for in Article 32(2) of MoA Regulation 139/2014
and consisted of "a limitation of the importation of chicken meat and chicken products to certain
intended uses to meet the needs of "hotel, restaurant, catering, manufacturing, other special
needs, and modern market" and maintained in subsequent legislation enacted by Indonesia (MoA
Regulation 58/2015). After the first meeting with the Panel, Brazil learned that MoA Regulation
58/2015 was no longer in force and that the restriction on the intended uses was now contained in
MoA Regulation 34/2016 and MoT Regulation 05/2016 (as amended by MoT Regulation 37/2016).
In August, Indonesia enacted MoT Regulation 59/2016, replacing the previously amended MoT
Regulation 05/2016.

21. After all the aforementioned legislative changes, Indonesia now claims that the intended use
requirement no longer exists because, under the current regime, frozen or chilled chicken meat
and chicken products can be sold in any Indonesian market, provided it has a cold storage facility.

22. Yet, the introduction of the expression "markets with cold chain facility" among the intended
uses does not alter the prohibition in place. Instead of an outright prohibition as in the previous
legislation, Indonesia enacted a tailor-made legislation with minor effects on the improvement of
the competitive opportunities available for imported products. The market for imported chicken
remains as niche markets, and the most relevant part of the marketplace continues to be allocated
only for local producers.

23. Moreover, MoA Regulation 34/2016 introduced additional features, which reinforces the
restriction caused by the intended uses. For instance, it now requires importers, when applying for
an Import Recommendation, to submit a distribution plan for the imported meat, which shall
include in advance information on the type of meat, the quantity, the name and address of the
establishments/buyers and the product's price. As expected, the list of buyers included in the
distribution plan shall only be among those of the allowed intended uses. To reinforce compliance,
the same Regulation requires importers to submit weekly distribution reports ("every Thursday")
to confirm that the products were not redirected to other purposes. Importers appear to be now
tied to the terms of the distribution plan and any deviation to it may subject to sanctions, including
a one-year import suspension.

(4) Indonesia's restrictive import licensing procedures

24. The complex and burdensome Indonesian import licensing regime requires the importer to
obtain various approvals, authorizations and recommendations, largely granted on the discretion
of different authorities. Firstly, an importer has to obtain an Importer Identification Number (API-
U, for chicken), which has a period of validity of 5 years, after which it has to be renewed. For
that, the importer must submit a re-registration to the issuing agency at the latest 30 (thirty)
business days after the period of 5 years. The business operator that holds an API-U is constrained
to report about the import realization once every 3 months to the Head of Provincial Agency and to
the Head of District/Municipal Agency having jurisdiction over the company's domicile. If a
company fails to do so then the API-U shall be suspended. The API-U shall be revoked if it is
suspended twice or if the company fails to perform the obligation to report the import realization
(every 3 months) not later than 30 days as of the suspension date, submits untrue information or
data in the document of application, breaches the provisions in the prevailing legislation in import
sector, and abuses the document of import and the letters related to import. These possibilities of
suspension and/or revocation of the API-U reinforce the control of the Indonesian authorities over
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the importation, what directly affects the importation of chicken meat and chicken products,
increasing the lack of predictability of the regime and causing restrictions on market access.

25. Secondly, after obtaining an API-U, an importer of chicken products must obtain a MoF
Registration before the Director General of Customs and Excise. MoF Decree 454/2002 determines
the need to hold a customs registration (SRP) valid in Indonesia's customs areas as a requirement
for undertaking customs activities in the importation. Thirdly, once the registration procedures are
completed, the importer must apply for a MoA Import Recommendation, but only for products
included in the list of authorized products to be imported. All the products not listed in these
Appendices are therefore automatically banned from the Indonesian market, as they cannot be
imported without this Recommendation. Fourthly, For the products that can obtain a MoA Import
Recommendation, several requirements have to be fulfilled by the importer. Some of them, such
as the Veterinary Control Number and the Livestock and Animal Health Registration Certificate or
Business License require previous and complex démarches. Moreover, in order to obtain a MoA
Import Recommendation, an importer must demonstrate, through a "statement letter with stamp
duty affixed, accompanied with supporting document of the ownership of cold storage and
refrigerated vehicle", and also prove – through an assignment letter or work contract – that it
employs a veterinarian with competency to supervise the imported products. Besides that,
importers of chicken meat and chicken products must also submit a letter of recommendation from
the provincial livestock services office, which amounts to a certification that the importer has been
supervised by the competent veterinarian. The provincial livestock services office has discretionary
power to issue or not the letter of recommendation.

26. Another requirement is the report of import realization from the previous period. The
importer shall demonstrate that the transactions carried out during this period met the fixed terms
established by previous MoA Import Recommendations related to business units, port of discharge,
and type and origin of the goods covered by them.

27. Indonesias regulation establish also that in order to obtain a Recommendation the importer
must necessarily indicate the "intended use" for the products to be imported, which by itself is a
requirement that imposes an important restriction on trade.

28. The issuance of a MoA Import Recommendation "for meat and processed meat products" is
under additional requirements, as supervision on the compliance of veterinary public health
requirements shall be performed. It is not clear whether the authority responsible for issuing the
MoA Import Recommendation is required to base the decision on the conclusions of the report of
the veterinary public health supervisor.

29. The requirements to obtain a MoA Import Recommendation are far from being the only
problem. After the MoA Import Recommendation is issued, no changes or amendments related
to the country of origin, business unit of origin, port of discharge, type/category of product are
allowed. If the importers, for any reason, modify any of these "fixed license terms", Indonesia
regulations establishes that they shall be sanctioned by the "revocation of [his] recommendation"
and the "denial of [his] next recommendation application".

30. Moreover, the time window for imports is drastically reduced in Indonesia since they can
only take place during the validity period of both the MoT Import Approval and the MoA Import
Recommendation, which now is 6 months each at maximum. During this short period, the importer
must complete the entire import transaction authorized by both documents by loading, shipping,
transporting, delivering, and clearing at the customs the imported goods.

31. As it is the case for the MoA Import Recommendation, once the MoT Import Approval is
issued, it cannot be modified. The importer who fails to comply with the "fixed license terms" is
subject to several sanctions, including the revocation of the Approval and the impossibility of
submitting new requests. Ff an Approval is revoked, the importer may only re-submit the
application after 1 year.

32. Even under the current regime established by MoA Regulation 34/2016 and MoT
Regulation,59/2016 , these restrictive features of Indonesia´s import licensing regime – that were
existent under MoA Regulation 139/2014; MoT Regulation 46/2013, MoA Regulation 58/2015
Regulation MoT 05/2016, recently modified have not been fundamentally altered. Although the
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seemly elimination of the application, windows could be considered a positive development, the
validity period of Import Recommendation and of the Import Approval are still short (6 months),
the positive list and the intended use, albeit in a different form are still and place and the fixed
license terms have not experienced any change. Moreover, as import approvals can only be
obtained after the issuance of an import recommendation and the application must be submitted
within three months after the issuance of the corresponding Import Recommendation, an Import
Approval cannot be obtained at "any time".These elements are part and parcel of the same import
licensing regime, which means that their trade restrictiveness need to be assessed as if they were
one single measure.

(5) Undue delay with regard to the approval of sanitary requirements

33. According to the Indonesian legislation (Articles 35 and 36 of MoA Regulation 58/2015), it is
not possible to import chicken meat and chicken products into Indonesia without a health
certificate approved by the country. As mentioned above, since 2009 Brazil has been striving to
negotiate with Indonesia the terms of a veterinary certificate for poultry, in order to allow Brazilian
exports of those products to enter the Indonesian market. The proposal was based on the
international standards applicable and encompassed the sanitary requirements established by
Indonesia's legislation. Indonesia has not provided a satisfactory clarification on the sanitary
reasons why the Brazilian products were not allowed into Indonesia.

(6) Restrictions on the transportation of imported products

34. According to Article 20(a) of MoA Regulation 58/2015 (now replaced by Article 19(a) of MoA
Regulation 34/2016), the transportation of carcass, meat and/or processed products shall be
"conducted directly from the country of origin to the port of discharge within the territory of
Indonesia". If the transportation is not direct, or, by any reason, a stop in a third country or port
during the transportation is necessary before the arrival at the port of destination, the products
will not be allowed to be imported into Indonesia. Products will be refused even in the case of force
majeure that may deviate the shipment to a third-country port for transit.

(7) Discriminatory implementation of halal labelling requirements

35. Indonesia requires that all products that enter, circulate and are traded in the country must
be certified halal. To that end all food products must be adequately labelled halal on the product's
packaging. This legal requirement applies indistinctively to both imported and like domestic
products. However, the implementation of this requirement is clearly discriminatory. While
imported products have to comply with the labelling requirements before importing is authorized,
domestic products are not subject to this strict requirement. According to a local expert, domestic
producers, particularly in the wet market, do not generally attach any label or food packaging (i.e.
do not follow the requirements stipulated by the relevant laws and regulations). In addition, only
rarely does the Indonesian supervision authority check compliance with the halal labelling
requirement in wet markets and non-official slaughterhouses. Brazil takes no issue with halal
certification and labelling. It is concerned with the fact that Indonesia accords treatment less
favorable to imported products.

IV. LEGAL CLAIMS

1. Claims related to border measures which create trade restrictions

36. Indonesia adopts several measures which prohibit and/or restrict the importation of the
products at issue. These measures, combined and individually, impose a general ban on the
Brazilian products in violation of Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture (AoA). Indonesia's import licensing procedures also amount to a non-automatic
licensing regime whose application and administration causes trade-restrictive effects on imports
in violation of Article 3.2 of the Agreement on Import Licensing Procedures (ILA).
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1.1. Relevant legal standard

(a) Article XI:1 of the GATT 1994

37. Article XI:1 encompasses "prohibitions" or "restrictions" which are made effective through
"quotas", "import or export licenses" or any "other measures". The Panel in India – Quantitative
Restrictions (para. 5.129) said that "the text of Article XI:1 is very broad in scope, providing for a
general ban on import or export restrictions or prohibitions ‘other than duties, taxes or other
charges'" and "the term ‘restriction' is also broad, as seen in its ordinary meaning, which is 'a
limitation on action, a limiting condition or regulation'".

38. In light of this broad scope, the fact that a measure does not totally prevent the imports or
does not encompass the application of prohibited additional duties does not mean per se that there
is no violation of that provision. The Appellate Body has indicated that the scope of Article XI:1
includes measures through which a prohibition or restriction is produced or becomes operative.
Likewise, a violation of Article XI:1 may occur even when there is no specific threshold established
limiting imports or exports. Actually, Article XI:1 does not require a showing of the measure's
effects on trade volumes. A Member's regulation establishing, directly or indirectly, a "positive list"
or certain binding "intended uses" would, in this sense, qualify as a quantitative restriction.

39. A number of panels have considered the reference to "other measures" in Article XI:1 as a
"broad residual category" which encompasses different types of measures instituted or maintained
by a WTO Member with the ability to prohibit or restrict the importation of products. This broad
category would encompass unwritten measures as well. In Argentina – Import Measures (para
6.248), the Panel found that the Trade-Related Requirements (TRRs measure), imposed by
Argentina through the combined effect of different measures, fell within the meaning of "other
measures", as provided for in Article XI:1 of the GATT 1994.

(b) Article 4.2 of the Agreement on Agriculture

40. Article 4.2 of the AoA establishes that Members "must not continue to apply measures
covered by Article 4.2 from the date of entry into force of the WTO Agreement" ("maintain"),
"must not introduce new measures ‘of the kind' that it has not had in place in the past" ("resort
to"), and "may not, at some later stage after the entry into force of the WTO, re-enact measures
prohibited by Article 4.2 ("revert to"). The footnote 1 of Article 4.2 provides examples of these
measures: quantitative import restrictions, variable import levies, minimum import prices,
discretionary import licensing, non-tariff measures maintained through state-trading enterprises,
voluntary export restraints and similar border measures other than ordinary customs duties. Brazil
finds relevant the guidance of previous jurisprudence on the scope of the following terms:
"quantitative import restrictions", "discretionary import licensing", and "similar border measures
other than ordinary customs duties".

41. With regard to the meaning of "quantitative import restrictions", the Panel in Turkey – Rice
(para 7.120) considered that measures that affect the quantities of product that can be imported
undoubtedly qualify as a quantitative import restriction, even when this effect is caused by the
"lack of transparency and lack of predictability" of a Member's measure. The Panel in Turkey – Rice
(para 7.133) also interpreted the expression "discretionary import licensing" as encompassing "the
discretionary use by authorities in an importing country of the concession, or refusal to grant, a
particular document which is necessary for the importation of a good, as an instrument to
administer trade." As for the meaning of "similar border measures other than ordinary customs
duties", the Appellate Body in Chile – Price Band System (para. 227) explained that an
inconsistency with Article 4.2 can be established when it is possible to identify border measures
similar to the measures explicitly identified in footnote 1. The border measures listed in footnote 1
all "have in common the object and effect of restricting the volumes, and distorting the prices of
imports of agricultural products in ways different from the ways that ordinary customs duties do".
As the function of Article 4.2 and footnote 1 is "to enhance market access for agricultural
products",1 any measure which has the object and effect of restricting market access, limiting
import volumes and distorting the prices of imports would be inconsistent with Article 4.2 of the
AoA.

1
Appellate Body Report, Chile – Price Band System (21.5), para. 215.
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(c) Article 3.2 of the Agreement on Import Licensing Procedures

42. Article 1.1 of the ILA defines import licensing as the administrative procedures through
which a business operator submits an import application or other documentation (other than that
required for customs purposes) to the relevant administrative body as a prior condition for
importation. Article 1.2 provides the general principle that should inform any licensing procedure:
"Members shall ensure that the administrative procedures used to implement import licensing
regimes are in conformity with the relevant provisions of GATT 1994 … with a view to preventing
trade distortions that may arise from an inappropriate operation of those procedures". This
principle is also confirmed by Article 1.3 of ILA, which establishes a requirement that the rules for
import licensing shall be neutral in "application and administered in a fair and equitable manner".

43. The ILA also regulates two types of licensing procedures: automatic and non-automatic.
Automatic import licensing is a procedure where approval of the application is granted in all cases,
which means that the administrative authorities have no discretion to decide whether to grant or
not the license. A non-automatic licensing regime is defined by exclusion, which means that in this
case the importing country has the discretion to grant or not the import license. Normally, non-
automatic licensing procedures are used when there is a restrictive condition in place on the
imports, such as tariff rate quotas (TRQs), which gives rise to imports controls.

44. Besides complying with the general principles established in Articles 1.2 and 1.3, Article 3.2
of the ILA provides, in relation to non-automatic licensing, that Members shall not establish
licensing procedures that impose additional restrictions to those already caused by the underlying
measure it implements. In order to assess a violation of Article 3.2, it is necessary to show a
"decline in market share" and "a causal relationship between the licensing procedures and the
trade distortion"2 Moreover, Article 3.2 of ILA requires that the non-automatic licensing
procedures shall not be more administratively burdensome than absolutely necessary to
administer the measure they are used to implement. Thus, the determination of this "measure" is
crucial for the assessment of whether it is more burdensome or not than necessary in the context
of this provision.

1.2 Legal analysis

(a) The general prohibition is a border restriction inconsistent with Article XI:1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture

45. Brazil submits that the combined effect of several different individual measures adopted by
Indonesia in relation to chicken meat and chicken products amounts to a general prohibition on
the importation of these products from Brazil. Combined, these measures constitute "prohibitions
or restrictions other than duties, taxes or other charges made effective through quotas, import or
export licenses or other measures" within the meaning of Article XI:1 of the GATT 1994. Indonesia
has relentlessly created several obstacles to impede the importation of the products at issue
through a comprehensive assortment of combined measures which established an institutional and
procedural "wall" that has totally banned the importation of Brazilian chicken meat and chicken
products. These measures reflect Indonesia's general policy objective of protecting the local
production of chicken meat and chicken products in order to achieve self-sufficiency.

46. In Argentina – Import Measures, the Panel and the Appellate Body dealt with a similar
situation. The Panel established a framework of analysis in order to assess whether Argentina's
unwritten measure had a limiting effect on imports and were affecting the competitive
opportunities protected by Article XI:1. Firstly, it established that the measure at issue restricted
market access. Secondly, that it created uncertainty as to an applicant's ability to import. Thirdly,
the Panel concluded that the measure prevented companies to import as much as they desired or
needed without regard to their export performance. Finally, it imposed a significant burden on
importers that was unrelated to their normal importing activity.

47. The Indonesian general prohibition on Brazilian imports of chicken meat and chicken
products meets all these criteria. Indonesia only authorizes the importation of products specifically
referred to in a "positive list" that does not include all the products at issue. And, even so, this

2
Appellate Body Report, EC – Poultry, paras. 126-127.
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importation shall only take place in case of insufficiency of local production and for very specific
intended uses, which clearly restrict market access conditions. Market access is also limited by the
fact that Indonesia has unduly delayed the approval of a health certificate that would allow
Brazilian exports. Additionally, imports of chicken meat and chicken products are subject to a set
of restrictive import licensing procedures that have created uncertainty to importers and imposed
on them a significant burden which is unrelated to other importing controls, making importations
extremely difficult. For all these reasons, the general prohibition on imports is inconsistent with
Article XI:1 of the GATT 1994.

48. The Panels in India – Quantitative Restrictions (paras. 5.241 – 5.242) and Korea – Various
Measures on Beef (para 762) established that a measure that had been found to violate Article
XI:1 was also to be considered in violation of Article 4.2 of the AoA, to the extent it applies to
agricultural products. All the products at issue are undoubtedly covered by the AoA. Therefore
Brazil submits that Indonesia's general prohibition on the importation of chicken meat and chicken
products is also inconsistent with Article 4.2 of the AoA.

49. Should the Panel opt to carry an independent analysis of Article 4.2, Brazil contends that the
general prohibition clearly imposes a "quantitative import restriction" within the meaning of that
provision. Combined, the individual measures adopted by Indonesia have the object and effect of
restricting the volumes and distorting the prices of imports of agricultural products in ways
different from the ways that ordinary customs duties do in the sense of the Appellate Body's
understanding in Chile – Price Band System. Due to this general prohibition, Brazil has not been
able to export chicken to Indonesia since 2009.

50. In the case Indonesia's general prohibition is not found by the Panel to constitute a
"quantitative import restriction", it still constitute a "similar border measure other than ordinary
customs duties" within the meaning of footnote 1 of Article 4.2, as it has "characteristics in
common with a quantitative import restriction" and limit opportunities for importation of the
products at issue.

51. Indonesia argued that to demonstrate a violation of Article 4.2 of the AoA, the complainant
has the burden of establishing that the measure is not justified under Article XX of the GATT 1994
("or other general, non-agriculture-specific provisions of the GATT").

52. Brazil is puzzled by Indonesia's reasoning. The Appellate Body jurisprudence confirms
exactly the opposite, i.e. that the burden to establish an affirmative defense under Article XX
belongs to the respondent. Brazil fails to see how the nature of Article XX would be transformed
from an affirmative defense (the burden of which lies with the respondent) into something else
(whose inexistence the complainant should prove). Brazil is not aware of a single instance, in more
than 20 years of WTO litigation and almost 70 years of dispute settlement including the GATT
years, where the burden of proof under Article XX has been reversed from the responding party to
the complainant. More broadly, Brazil ignores examples of panels or the Appellate Body requiring
from a party – either party – to prove a negative, as Indonesia suggests Brazil is required to do.
The reason is simple: it is a general principle of law that the party arguing the affirmative of a
proposition has the burden to prove the basis and content of such proposition.

53. Article 4.2 of the AoA requires the complainant to establish that the respondent maintains a
measure of the kind which has been required to be converted into ordinary customs duties, such
as, inter alia, quantitative import restrictions. It would be then to the respondent to demonstrate
that the relevant measure is not maintained under any GATT exception. In the present dispute,
Brazil has established that Indonesia maintains restrictions on imports of chicken meat and
chicken products covered by Article 4.2. Indonesia has never argued, much less demonstrated,
that this measure is justified under Article XX of the GATT 1994 or any other general, non-
agriculture-specific provisions of the GATT 1994, and Brazil has no information to the effect that
this might be the case.
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(b) The individual measures are each a border restriction inconsistent with Article XI:1
of the GATT 1994 and Article 4.2 of the Agreement on Agriculture

(i) Positive list

54. Article XI:1 covers any measures which institute or maintain a "prohibition or restriction
other than duties, taxes or other charges on the importation of any product". The impossibility of
importation of the products not listed amounts to an import ban. Through the positive list,
Indonesia maintains a prohibition other than "duties, taxes or other charges" equivalent to a zero
quota which is incompatible with Article XI:1 of the GATT 1994.

55. The positive list also amounts to a "quantitative import restriction" or a "similar border
measure other than ordinary customs duties" and is inconsistent with Article 4.2 of the AoA. This
measure undoubtedly contributes to restrict the volume of imports, to limit the quantities of the
product that can be imported. Actually, it has prevented all imports of Brazilian chicken cuts and
other prepared or preserved chicken meat, which constitutes the extreme type of "quantitative
import restriction" prohibited by Article 4.2.

56. The Panels in India – Quantitative Restrictions and Korea – Various Measures on Beef
established that a measure that had been found to violate Article XI:1 was also to be considered in
violation of Article 4.2 of the AoA to the extent it applies to agricultural products. Therefore, the
positive list is inconsistent with Article 4.2 of the AoA.

57. Should the Panel opt to carry out an independent analysis of Article 4.2, Brazil contends that
this measure clearly imposes a "quantitative import restriction" within the meaning of that
provision, as it has the object and effect of restricting the volumes, and distorting the prices of
imports of agricultural products in ways different from the ways that ordinary customs duties do.
In the case the positive list is not found to constitute a "quantitative import restriction", it
constitutes a "similar border measure other than ordinary customs duties" within the meaning of
footnote 1 of Article 4.2, as it has characteristics in common with a quantitative import restriction
and limits the opportunities for importation.

58. During the Panel's proceedings, Indonesia argued that the positive list requirement no
longer exits. Brazil submits that the amendments introduced simply allow Indonesian authorities
the discretionary power to determine which chicken products could receive a MoA
Recommendation and a MoT Import Approval. They do not ensure access to all types of chicken
meat and chicken products, as required by Article XI:1 of the GATT 1994 and Article 4.2. In
addition, the new pieces of legislation do not provide any guidance for importers in relation to
what is to be regarded as "the requirements of safe, healthy, wholesome and halal". These
changes not only kept in place the positive list, but also introduced new discretionary elements in
the issuance of the import license.

(ii) Intended use

59. According to Indonesia's legislation, the chicken meat and chicken products that can be
imported into Indonesia can only be destined to very specific uses. This measure has an important
"limiting effect" on imports that falls squarely in the ambit of Article XI:1. As recognized by the
Panel in Colombia – Ports of Entry (para. 7.240) any measures that have "implications on the
competitive situation of an importer", creating uncertainties, affecting investment plans or
restricting market access for imports is under the scope of this provision.

60. As the Panel in China – Raw Materials (para 7.1081) established, to be considered a
restriction it is not even necessary that the measure has an actual impact on trade flows. The very
potential to limit trade is sufficient to constitute a restriction within the meaning of Article XI:1.
Moreover, since this restriction is not applied for domestic products, by its very design and
structure, this measure prevents "whole chicken, fresh or frozen" to have the same competitive
opportunities than those granted to the domestic like products.

61. The limitation on the intended uses, as well as the sanctions imposed for breaches of the
original uses registered in the Recommendation, impose a limiting condition which adversely
affects the market access to imported products in violation of Article XI:1.
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62. This restriction also amounts to a "quantitative import restriction" and is inconsistent with
Article 4.2 of the AoA, as it contributes "to restrict the volume of imports" by limiting the
quantities of product that can be imported, which is in contradiction of the very purposes of Article
4.2 of improving market access to agriculture products.

63. In the case Indonesia's restriction on the intended use is not found to be a "quantitative
import restriction", it still constitutes a "similar border measure other than ordinary customs
duties" within the meaning of footnote 1 of Article 4.2 of the AoA, as it has "characteristics in
common with a quantitative import restriction" and limits the opportunities for imports.

(iii) Indonesia's restrictive import licensing procedures

64. Several elements of the Indonesian import licensing regime impose unduly restrictions on
the importation of chicken meat and chicken products. The positive list and the intended use
requirements have already been demonstrated above to violate Article XI:1 of the GATT 1994 and
Article 4.2 of the AoA. Brazil addresses below the negative effects of the limited application
windows, the short validity periods and the fixed license terms of the MoA Import
Recommendation and the MoT Import Approval on the competitive opportunities for imports.

65. Indonesia imposes limited (and short) application windows for importers to obtain
authorization to import. Since the validity period itself of the Recommendations is also very limited
(only 4 months), the importer has to apply for new Recommendations 3 times per year, at every
new application window.

66. Even with less than abundant factual evidence on how this system operates in practice, due
to the de facto import ban on Brazilian products, there is no doubt that the limited application
windows and validity periods have restricting effects on imports. Firstly, importers are not allowed
to submit an application whenever a business opportunity occurs. Secondly, the system prevents,
in practice, exports during the beginning of each validity period, as import transactions can only be
carried out after the issuance of the MoA Import Recommendation and the MoT Import Approval.
Considering also that shipments have to reflect exactly the terms of both authorizations, shipping
operations can only be made after the commencement of the short 4-month validity period. For
Brazil, this has a particular limiting effect, as the whole export procedures from Brazil to Indonesia
are estimated to take on average 100 days, limiting the access to the Indonesian market to
basically 20 days. In sum, there is a "dead zone" comprising most of the 4-month validity period
during which no product can enter the Indonesian market. This implies also that exporters will not
be able to dispatch more than one shipment of the products at each validity period.

67. This limiting effect is aggravated by the fact that both authorizations have fixed terms. Once
those documents are issued, no changes or amendments are allowed. By the time the importers
apply for these authorizations, all information related to the covered transactions has to be
precisely defined in advance, what is not in accordance with market practices. The importer who
fails to comply with these "fixed license terms" is subject to several sanctions and its exports will
be refused at the entry port. As no adjustments in the terms of the licensing can be made to
respond to new business opportunities during the validity period, this requirement also impedes
the importers to have the necessary flexibility to respond to changes in market conditions, thereby
imposing a severe limitation on imports.

68. Based on the findings in Argentina – Import Measures, Brazil submits that these aspects of
the import licensing regime (limited application windows and validity periods, and fixed license
terms) violate Article XI:1 because they (a) unduly restrict market access for Brazilian products;
(b) create uncertainty as to an applicant's ability to import, which depends on the issuance of the
import licenses to take all other necessary steps related to importation and also carry them out
within the short 4-month validity period; and (c) impose a significant burden on importers that is
unrelated to their normal importing activity.

69. These elements of Indonesia's import licensing regime, together with the positive list, the
intended use and the discretionary aspect of the import licensing regime also operate as a
quantitative import restriction in the sense of footnote 1 of Article 4.2, as they represent a severe
restriction on the volume of Brazilian exports, in blatant contradiction with the main objective of
that agreement which is to enhance market access for agricultural products.
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70. In the case these aspects of Indonesia's license regime are not found to constitute a
"quantitative import restriction", they still constitute a "similar border measure other than ordinary
customs duties" within the meaning of footnote 1, as they are similar to a quantitative import
restriction in a manner inconsistent with Article 4.2.

71. Moreover, some requirements of Indonesia's import licensing regime, by their very design,
encompass "the discretionary use by authorities of the concession or refusal to grant the
documents required" for importation, such as those related to: (i) a letter of recommendation from
provincial livestock services office; (ii) supervision on the compliance of veterinary requirements;
and (iii) the stipulation of the "amount" to be imported per Business Player. As interpreted by the
Panel in Turkey-Rice, these requirements fall squarely into the definition of "discretionary import
licensing" of footnote 1 of Article 4.2.

72. If the Panel does not consider these requirements as a "discretionary import licensing" under
footnote 1, they still constitute a "similar border measure other than ordinary customs duties", as
they are similar to discretionary import licensing within the meaning of footnote 1. For all the
reasons above, Brazil submits that the aspects mentioned above of Indonesia's import licensing
regime are inconsistent with Article 4.2 of the Agreement on Agriculture.

(iv) Restrictions on the transportation of imported products

73. As mentioned above, the transportation of carcass, meat and/or processed products shall be
"conducted directly from the country of origin to the port of discharge within the territory of
Indonesia". If the transportation is not straight to Indonesia or, by any reason (including force
majeure events), it is necessary to stop in a third country or port before it arrives at the
Indonesian port, then the products will not be allowed to be imported.

74. This restriction has a clear "limiting effect" on the importation of the products at issue. Due
to the long distance between Brazil and Indonesia, the vessels need at least one stop in a third
country or port before going to the indicated port of entry in Indonesia. Since there are no direct
vessel lines from Brazil to Indonesia, this requirement amounts to a virtual ban to Brazilian
products. Even if it were possible to export from Brazil directly to Indonesia, this direct
transportation requirement would largely increase the transportation costs of the Brazilian product
and thus "discourage importation" which, according to the findings of the Panel in Argentina –
Import Measures, is inconsistent with Article XI:1 of GATT 1994.

75. This measure also clearly operates as a "quantitative import restriction" within the meaning
of Article 4.2, as the costs and logistics involved in this direct transportation requirement
discourages exports from distant countries, contributing, thus, to restrict the volume of imports.
As Brazilian exports to Indonesia would take at least 100 days and would necessarily pass through
third country ports, this requirement could not be fulfilled by Brazilian exporters, amounting to a
complete ban of imports of Brazilian products in the Indonesian market, which cannot be justified
under the Agreement on Agriculture.

76. In the case Indonesia's direct transportation requirement is not found to be a "quantitative
import restriction", it still constitutes a "similar border measure other than ordinary customs
duties" within the meaning of footnote 1 of Article 4.2, as it has "characteristics in common with a
quantitative import restriction" and limits opportunities for importation of chicken meat and
chicken products. The Indonesian direct transportation requirement is inconsistent with the
agricultural market access obligation of Article 4.2.

77. During the Panel's proceedings, Indonesia has suggested that "direct" does not have its
ordinary meaning, but may be used in the same manner as it is used in the airline industry. A
direct flight is one that may make stops and pick up additional passengers but the original
passengers do not leave the plane. Also, this requirement should be read in the context of the
other provisions in the same Article, which would suggest that transit is, in fact, allowed.

78. Firstly, the plain reading of Article 19(a) of MoA Regulation 34/2016 does not support the
conclusion that transit would be allowed by the Indonesian authorities. There is not a logical
connection (or any connection at all) identified in the specified provision that infers that the direct
transportation requirement must be interpreted together with the provisions that regulate
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quarantine. This generates uncertainty to exporters and economic operators, as they may not
have a legal remedy should their exports be prevented from entering Indonesia because they did
not travel a direct route. Secondly, the way Indonesia has described its direct transportation
requirement, as a flight that "makes stops and pick up additional passengers but the original
passengers do not leave the plane", seems to imply that transshipment is not included in
Indonesia's definition of transit. If this is the case, then the restrictions to transshipment is also a
quantitative restriction inconsistent with Article XI:1 and 4.2 of the AoA. Finally, even if transit
(and transshipment) is allowed in practice, the legal uncertainties generated by the murky
language of Regulation Article 19(a) of MoA Regulation 34/2016 also amount to a quantitative
restriction inconsistent with those Articles.

(c) Indonesia's import licensing procedures impose a border restriction inconsistent

with the obligations under the Agreement on Import Licensing Procedures

79. Brazil takes issue with the following measures that restrict/prohibit imports of chicken meat
and chicken products: (i) positive list of products allowed to be imported; (ii) intended uses; (iii)
limited (and short) application periods and validity periods of the MoA Import Recommendation
and MoT Import Approvals; (iv) fixed license terms; and (v) discretionary import licensing. In
addition of breaching Article XI:1 of the GATT 1994 and Article 4.2 of the AoA, these measures are
also inconsistent with Article 3.2 of the ILA.

80. The Panel in EC – Bananas III defined the two requirements that must be met in order to
determine whether import licensing procedures are within the scope of Article 1.1 of the ILA: (i)
the procedures should require the submission of an application or other documentation to the
relevant administrative body; and (ii) the submission of an application or other documentation
shall be a prior condition for importation.

81. The Indonesian procedures meet the two criteria. Firstly, in order to obtain a MoA Import
Recommendation and a MoT Import Approval, the importer must, among other steps, submit
applications to different administrative bodies. Secondly, the submission of the application and the
other required documents for the MoA Import Recommendation and MoT Import Approval are
clearly a condition for the importation of the products at issue into Indonesia. Both applications are
a prior condition for importation.

82. The ILA allows for two types of licensing procedures: (i) automatic import licensing and (ii)
non-automatic import licensing. Any licensing procedure that is not granted automatically or is
subject to different limitations to apply and obtain a license should be considered a non-automatic
licensing regime falling under the purview of Article 3.2 of ILA.

83. The specific features of Indonesia's import licensing procedures, such as the limited
application windows, short validity periods, fixed license terms, the positive list, the intended use
requirements, are sufficient to demonstrate that import recommendations and approvals cannot
qualify as an automatic procedure, as they are not "granted in all cases". Indonesia itself
recognizes that its licensing procedures are aimed at addressing policy concerns (halal and
sanitary requirements) what would suggest that such procedures are non-automatic. Also some
aspects of this regime for chicken meat and chicken products are discretionary. Therefore,
Indonesia's import licensing requirements are not automatic.

84. In this context, and according to Article 3.2 of the ILA, to be consistent with WTO
Agreements, the non-automatic procedures should be related to the implementation of a
permissible trade restrictive measure; should not have trade restrictive effects additional to those
caused by the imposition of the restrictive measure; should also correspond in scope and duration
to the measure they are used to implement and should be no more administratively burdensome
than absolutely necessary to administer the measure.

85. This is not the case in Indonesia. Indonesia's import licensing procedures are not connected
to a permissible restrictive measure. There is no persuasive connection between halal and sanitary
concerns with the positive list requirement, the intended use requirement, the limited and short
application periods and validity periods, the fixed license terms and the discretionary import
licensing procedures. Moreover, as Indonesia itself recognized there is a range of pre-market
procedures in place to ensure that sanitary and halal requirements are fulfilled, such as: desk
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review to establish the sanitary conditions of the country of origin, import risk analysis, on-site
visit inspections on business units and implementation of a halal assurance system, among others.
Once these appropriate measures are implemented there are no grounds in WTO rules to submit
the importation to the challenged measures.

86. Even if Indonesia's procedures were applied to administer legitimate restrictions on imports,
by its design, structure and operation the regime imposes restrictions on the importation far
additional than those that would be required to implement the relevant restriction in violation of
Article 3.2 of the ILA. Besides preventing importers from applying for licenses to products not
included in the positive list and restricting applications for very limited intended uses, Indonesia
prevents importers from obtaining licenses during most part of the year. These restrictions
combined with the short validity period and the fixed license terms, imposes an unduly additional
restriction on trade that severely affects Brazil's exports. Overall, there is a clear "causal
relationship" between the licensing procedures and the fact that Brazil (or any other country in the
world) has not exported chicken to Indonesia since 2009. Also, as there is no underlying
permissible measure, the procedures do not correspond "in scope and duration" to any "measure"
they are supposed to implement as required by the second sentence of Article 3.2. Finally, the lack
of transparency and predictability of Indonesia's multi-layered import licensing procedures are
more administratively burdensome than necessary to administer import procedures. Even
assuming in arguendo that the controls were justified, the operation of the procedures is far from
being simple, neutral in application and administered in a fair and equitable manner as required by
Article 1 and 3.2 of the ILA.

87. In respect to the standard of "no more administratively burdensome than absolutely
necessary" in Article 3.2 of the ILA, Brazil understands that it is more stringent than that
contained in Article XX of the GATT 1994. Firstly, different from the necessity test under the
chapeau of Article XX, the second sentence of Article 3.2 of the ILA refers to burden ("no more
burdensome"), and not to trade-restrictive. The trade-restrictiveness of the licensing procedures is
examined under the first sentence of Article 3.2, which means that the second sentence must add
to the obligations already contained under the first sentence. Secondly, the second part of the
second sentence of Article 3.2 of the ILA contains the word "absolutely", which further limits the
imposition of any burden on WTO Members in connection with the implementation of non-
automatic licensing procedures.

88. Similarly, the standard under Article 3.2 of the ILA is also not analogous to Article 2.2 of the
TBT Agreement, which provides that "technical regulations shall not be more trade-restrictive than
necessary to fulfil a legitimate objective taking account of the risks non-fulfilment would create".
Under Article 2.2 of the TBT Agreement, the focus is on the proportionality between the trade-
restrictiveness of the technical regulation (the measure) and the risks it seeks to mitigate. By
contrast, Article 3.2 of the ILA focuses on the burden of the implementation of the measure, not
on its trade-restrictiveness. Therefore, even in situations where trade-restrictive or distortive
effects cannot be substantiated, a non-automatic licensing regime can still violate Article 3.2 of the
ILA if it is more burdensome than necessary.

89. Indonesia also argued that of the five elements of its import licensing regime challenged by
Brazil under Article 3.2 of the ILA, only the limited application and validy periods would fall under
this agreement. The positive list and intended use do not fall under the ILA because they are
substantive, rather than procedural import licensing requirements.

90. Although the ILA distinguishes between administrative procedures (import licensing) and the
substantive rules (the measures) these procedures are meant to administer, Brazil considers that
this distinction does not apply in the present case. The dividing line between substantive and
procedural requirements is somewhat blurred in relation to the challenged elements of Indonesia's
import licensing regime. For instance, the positive list requirement establishes a quantitative
restriction on the importation and could be considered a "substantive measure", though not
permissible under WTO rules. Yet, it also obliges, as a prior condition for importation, the importer
to submit documentation attesting that the products are included in positive list. In other words,
there is also an administrative procedure attached to the implementation of the positive list
requirement that falls squarely under the scope of the ILA.

91. What makes it difficult to distinguish between procedural and substantive requirements is
the fact that there is no clear permissible measure Indonesia's import licensing regime is meant to
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implement. Even if one considers the positive list requirement as the measure the administrative
procedures are meant to implement, the question then becomes whether this requirement is
permissible: as the positive list is in violation of Article XI:1 and Article 4.2, it cannot constitute a
measure within the meaning of Article 3.2 of the ILA.

92. Due to this specific feature of Indonesia's import licensing regime, there are several
instances of grey zones where the requirements could be characterized both as substantive and
procedural, and, in this sense, not only do they violate the substantive provisions of WTO
Agreements, but also pertain to procedural provisions regulated by the ILA.

2. Claims related to discriminatory treatment

2.1. Relevant legal standard

93. Article III:4 of the GATT 1994 enshrines the basic national treatment obligation which states
that internal measures must not be applied so as to afford protection to domestic production.
Viewed as a cornerstone of the WTO multilateral trading system, it encompasses the obligation to
provide equality of competitive opportunities for both imported and like domestic products.

94. The Appellate Body in Korea – Various Measures on Beef provided a reliable guidance to
determine the existence of a violation of Article III:4. It ruled that three elements must be
satisfied: (i) the imported and domestic products at issue must be "like products"; (ii) the measure
at issue must be a "law, regulation, or requirement affecting their internal sale, offering for sale,
purchase, transportation, distribution or use"; and (iii) the imported products are accorded "less
favourable" treatment than that accorded to like domestic products.

95. In what regards the first element, there is a reiterated understanding in WTO jurisprudence
that if origin is the only factor distinguishing between imported and domestic products, there is no
need to conduct a full likeness analysis using the traditional criteria set out in the GATT panel
report in Border Tax Measures. In these cases, in which the foreign origin of the imported product
is the sole distinctive element, the imported and domestic products are considered to be "like" for
purposes of Article III:4, and the Panel need not go over the details of the competitive relationship
between them.

96. As for the second element, it must be established whether the measure could be viewed as a
"law, regulation or requirement". Panels have agreed on the definition of "regulation" as any
provision which is mandatory and applies across the board.3 However, the core of the analysis is
on the laws which "affect" the specific transactions, activities and uses mentioned in the provision.
Thus, the word "affecting" is central to the analysis because it makes the link between the type of
government action and the transactions, activities and uses relating to the like imported and
domestic products in the marketplace.

97. The Appellate Body has ruled that the word "affecting" has a broad scope of application and
interpreted it as a measure which has "an effect on" something.4 This understanding indicates that
any law, regulation etc. that has "an effect on" the internal sale, offering for sale, purchase,
transportation, distribution or use of the like products falls within the scope of Article III:4.
Additionally, the word "affecting" has also been interpreted to cover not only measures which
directly regulate the specific activities listed in Article III:4 but also any laws or regulations which
might adversely modify the conditions of competition or create incentives or disincentives between
the domestic and imported products.5

98. With regard to the third element, the Appellate Body decided that to determine whether or
not imported products are treated "less favourably" than like domestic products, it would be

3
Panel Report, China – Publications Audiovisual Products, para. 7.1513. Panel Reports, China – Auto
Parts, para. 7.239 (citing: GATT Panel Report on Canada – FIRA, para. 5.5; Panel Report, India – Autos, para.
7.181).
4
Appellate Body Report, US – FSC (Article 21.5 – EC), para. 209-210.
5
Panel Reports, China – Auto Parts, para. 7.251; Panel Report, China – Publications and Audiovisual
Products, para. 7.1450.
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necessary to assess whether a measure modifies the conditions of competition in the relevant
market to the detriment of imported products.6

2.2. Legal Analysis

(a) The restrictions on the intended uses violates Article III:4

99. As previously detailed, MoA Regulation 58/2015 imposes restrictions on the possible uses of
imported chicken meat and chicken products, while no such restrictions are imposed on domestic
like products. Considering that the origin of products is the only distinguishing element for the
imposition of this restriction, imported and domestic chicken meat and chicken products are "like"
for the purposes of Article III:4 and that the Panel do not need to analyze the details of the
competitive relationship between them.

100. Indonesia insists that imported frozen or chilled chicken and domestic fresh chicken are not
like products and could not have the same treatment. Domestic products are offered for sale fresh
while products imported from Brazil would necessarily be frozen. Brazilian chicken could not be
offered for sale in markets not equipped with cold-chain systems, as Indonesia would not be able
to ensure compliance with its sanitary and halal requirements.

101. Indonesia's arguments are groundless. Article 31(1) of MoA Regulation 58/2015 makes no
reference whatsoever to "fresh", "frozen" or "chilled" products. This provision is applicable to all
imported carcass and meat products, and the only distinctive criterion to restrict products to
certain intended uses is the foreign origin of the product. Based on this understanding, no further
analysis should be required to establish the likeness between imported and domestic chicken meat
and chicken products, and there is a clear discrimination in the conditions of competition of
imported and domestic like products in place in Indonesia.

102. However, if the Panel considers that a specific likeness analysis is deemed necessary, the
determination of likeness under Article III:4 of the GATT is, fundamentally, a determination about
the nature and extent of a competitive relationship between and among products. The application
of the traditional four criteria of the GATT's Border Tax Adjustments is also not mandatory but
simply a useful framework.

103. Indonesia has not provided any evidence to refute the assumption that the imported and
domestic products would compete in the marketplace. As a matter of fact, Indonesia appears to
agree with this argument when it affirmed that frozen-thawed chicken meat is similar to fresh
meat once thawed and could be thus offered for sale as fresh meat after being thawed. Although
limiting the discussion to fresh and thawed chicken meat, Indonesia concedes that the consumer
would not, in practice, distinguish them.

104. First of all, the difference between the imported and domestic products at issue would
depend only on the temperature conditions to which each one was subjected, something that does
not change the relevant properties of the product. Secondly, even products that may present
certain differences in physical characteristics, they may still be considered 'like' if the nature and
extent of their competitive relationship justifies such a determination. Thirdly, freezing is a process
capable of retaining the characteristics of chicken meat and chicken products, guaranteeing their
quality and sanity and cannot be used to disqualify the likeness of the products at issue.

105. If Indonesia considers the restrictions as sanitary measures, Brazil understands that
Indonesia would have to indicate what is its appropriate level of protection and whether a risk
assessment was carried out to establish that the consumption of frozen or chilled products poses a
higher risk to human health than fresh chicken. It has clearly not done so, limiting itself to assert,
without scientific basis, that the freezing process may affect the basic characteristics of the
product and therefore the analysis of likeness.

106. Finally, imported and domestic chicken are capable of serving the same or similar end-uses.
Indonesia's arguments that its consumers would not perceive imported and domestic product as
the same product because they could not be sure of the halalness of frozen or chilled product or of

6
Appellate Body Report, Korea - Various Measures on Beef, para. 137; Appellate Body Report, US –
Tuna II (Mexico), para. 214.
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the quality of the products is simply self-serving and devoid of any credibility. Halal-consuming
countries are amongst the major importers of halal frozen chicken. This discussion of whether or
not there would be a risk of deceptive practices for the Indonesian consumer does not appear to
square with the established analysis of likeness. This is a question of consumer information that
could be easily solved, among other measures, by a label that would indicate that the imported
chicken had been "previously frozen".

107. To determine whether the measure at issue falls within the scope of Article III:4, it is also
necessary to establish whether it corresponds to "laws, regulations and requirements affecting
internal sale, offering for sale, purchase, transportation, distribution or use". MoA Regulation
58/2015 is a legislation issued by Indonesia's Ministry of Agriculture, which is mandatory and
applies across the board to all importers of chicken meat and chicken products. Also this restriction
have "an effect on" the internal sale, offering for sale, distribution and use of the Brazilian chicken
meat and chicken products in Indonesia and adversely modify the conditions of competition,
favoring like domestic products. Firstly, it affects the uses available for the imported products.
Secondly, it affects the internal sale and offering for sale of Brazilian chicken meat and chicken
products. The restriction impedes direct access of consumers to Brazilian products through
relevant distribution and retail channels, such as "wet markets", severely restricting the size of the
Indonesian market and adversely shifting the balance of commercial opportunities towards like
domestic products.

108. This restriction also results in less favourable treatment to imported product as it modifies
the conditions of competition and accords like domestic products a competitive advantage in the
market over like imported products. In Korea – Various Measures on Beef the Appellate Body
confirmed the Panel's finding that the dual retail system for imported and domestic beef was
inconsistent with Article III:4 because it modified the conditions of competition in the Korean food
market to the detriment of imported products. The creation of a dual system, which required
retailers to choose between the sale of imported or domestic beef, resulted in the sudden cutting
off of access to normal distribution outlets, virtually excluding imported beef from the retail
distribution channels through which domestic beef had normal access to Korean consumers. The
main consequence of these restrictions was the imposition of a drastic reduction of commercial
opportunity to reach, and hence to generate sales to, the same consumers served by traditional
retail channels for domestic beef.

109. Brazil considers that the "less favourable treatment" under the present dispute is even more
serious. Due to the restriction imposed by MoA Regulation 58/2015, even if imports from Brazil
were allowed to enter into Indonesia, they could not reach the most important distribution
channels in that country, where a the vast majority of food purchase occurs. The huge majority of
consumers would not have access to Brazilian products. Thus, Indonesia's restrictions on the
intended uses is inconsistent with Article III:4 of the GATT.

(b) The halal labelling requirements violates Article III:4 of the GATT 1994

110. Brazil has demonstrated that imported and domestic chicken meat and chicken products are
"like" because origin is the only distinguishing feature between these products. Brazil also
demonstrated, and Indonesia has recognized, that Law 33/2014 and MoA Regulation 58/2015 are
a "law, regulation or requirement" within the meaning of Article III:4.

111. Law 33/2014 provides for a five-year grace period for the full compliance with the labelling
requirement. Even though this requirement is applicable for both imported and domestic halal
products, Indonesian authorities do not conduct consistent surveillance concerning the
implementation of halal labelling by domestic suppliers. It is very common for Indonesian
consumers to find locally produced chicken meat and chicken products for sale without the halal
label. This lack of surveillance is more evident in "wet markets", although it also occurs in other
retail distribution channels such as modern markets. Therefore, while domestic products are not
subject to strict control procedures, imports of chicken meat and chicken products must comply
with the labeling requirements before importing is authorized. Without a halal label, Brazilian
chicken meat and chicken products would not be able to access the Indonesian marketplace, even
if the production process in Brazil strictly complies with the halal requirements imposed by
Indonesia. This discriminatory treatment modifies the conditions of competition in the Indonesian
marketplace. Not requiring that domestic like products comply with halal labelling tilts the balance
in favour of local suppliers.
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3. A measure can violate different WTO provisions simultaneously

Article XI:1 of the GATT and 4.2 of the AoA

112. Indonesia claims that a measure can violate only one WTO provision at a time. It insists that
Article XI:1 of the GATT and Article 4.2 of the AoA are mutually exclusive provisions and that only
Article 4.2 should apply to the measures at issue, since it is lex specialis. It also argues that in the
case of Article 4.2 the complainant would have the burden to demonstrate not only that the
measure is a restriction but also that is not justified under any of the exceptions in the GATT.

113. It is beyond any reasonable doubt that a measure can be inconsistent with more than one
covered agreement simultaneously and that a Member is entitled to request for a panel to make
findings on each one of these inconsistencies. The Panel's reasoning in EC – Bananas III can
provide guidance to the understanding of what "conflict" means, based on the text of the General
Interpretative Note to Annex I of the Agreement establishing the WTO. A legal conflict would occur
in two situations: (i) first, clashes between obligations in the GATT and in the Annex 1A
Agreements, where those obligations are mutually exclusive in the sense that a Member cannot
comply with both obligations at the same time, and, second, (ii) when a rule in one agreement
prohibits what a rule in another agreement explicitly permits. None of these situations relate to
any of the alleged legal conflicts indicated by Indonesia.

114. There is no conflict between these Article XI:1 and 4.2. Actually, a violation of Article XI:1
would also entail a violation of Article 4.2. A measure that has a limiting effect on imports can
entail a violation of both Articles. Indonesia attempt to convince the Panel that, differently from
Article XI:1, the legal standard of Article 4.2 would require the complainant to bear the burden of
showing that the challenged measure is not maintained under any of "other general, non-
agriculture-specific provisions of GATT-1994", including its exceptions, such as Article XX, in order
to make its prima facie case. Indonesia's construed legal standard not only makes no sense but is
also contrary to all previous WTO jurisprudence which has determined that, in the case of
affirmative defenses, the burden of proof remains with the party asserting the defense, not the
opposite. To understand it otherwise would require the complainant not only to prove that there is
a restriction prohibited under Article 4.2 but also that none of the multiple exceptions available in
the GATT could justify the inconsistency of the measure at issue. This is simply unreasonable and
would mean to prove a negative.

Article XI:1 of the GATT 1994, 4.2 of the AoA and 3.2 of the ILA

115. Indonesia also argues that the general prohibition cannot be, at the same time, incompatible
with Article XI:1, Article 4.2 and Article 3.2 of the ILA. In Brazil's view, an import licensing
formality or procedure can constitute a violation of Article XI:1 if it has a limiting effect on imports,
what would also entail a violation of Article 4.2, and can also violate Article 3.2 of the ILA.
Members are required to administer non-automatic licensing in a manner which does not have
additional trade-restrictive or trade-distortive effects on imports than those already caused by the
imposition of the restriction itself. Indonesia's import licensing procedures are exactly the kind of
measures that violate the first sentence of Article 3.2, as they reinforce the restrictions imposed by
the country on the importation of chicken.

116. The same argument is used by Indonesia in respect to the substantive requirements
pertaining to the challenged import licensing regime. However, there are no grounds to consider
that a licensing procedure cannot violate at the same time all those three Articles. As a third party
has correctly reminded, if a Member imposes a consistent "restriction" through non-automatic
licensing procedures, the ILA, including Article 3.2, applies to ensure that the permissible measure
is not implemented through an overly restrictive or burdensome licensing procedure. Nevertheless,
licensing requirements that in themselves impose a limitation or limiting condition on importation
or have a limiting effect on trade also would fail within the scope of Article XI:1 of the GATT. The
limiting effect on trade of Indonesia's import licensing regime cannot be disputed as not a single
chicken has been able to enter the Indonesian market since 2009.

117. More specifically, the positive list requirement has an important limiting effect on imports, in
violation of both Article XI:1 and Article 4.2. Procedurally, requiring that the importer demonstrate
that previous imports have complied with its declared intended use as a prior condition to obtain a
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new license is a violation of Article 3.2 of the ILA. As there is no permissible measure this
requirement implements, any administrative procedure attached to the positive list is necessarily
an additional restriction in the sense of Article 3.2 of the ILA. The same is true for the intended
use requirement.

118. As for the limited application windows, the short validity periods and the fixed license terms,
Indonesia has not provided any defense to Brazil's claims regarding Article 3.2. It limited itself to
say that Brazilian exporters have not obtained the Import Recommendation and Import Approval
because they have not satisfied halal requirements. Yet, Indonesia has not explained how the
limited application windows, the short validity periods and the fixed license terms are related to
the observance of halal requirements. If there is no permissible measure non-automatic import
licensing procedures are meant to implement, they are in violation of Article 3.2 of the ILA.

Article XI:1 and Article III:4 of the GATT 1994

119. Finally, with regard to the intended used requirement, Indonesia argues that this
requirement cannot be challenged under both Article III:4 and Article XI:1 of the GATT and that it
should be viewed only as an internal measure, not a border measure, due to the alleged
application of the Ad Note to Article III. According to Indonesia, although enforced at the border,
this requirement applies also to domestic chicken. First, the intended use requirement has
different effects. It affects the process of importation itself: the importer will not have an import
license if the imports do not contemplate one of the permitted intended uses. It also affects the
conditions of competition once the product has entered the market. After customs clearance, the
importer is not allowed to offer for sale the imported products to other distribution and retail
channels than those listed in the import license. Therefore, the intended use requirement has
different effects and violates both Article X1:1 and III:4. Second, the intended use requirement is
not applicable in the same way to the domestic products. A shipment from Brazil to be used in a
restaurant in Jakarta could not be directed to a traditional market (or even to another intended
use, such as a hotel). However, if the same restaurant denies receiving chicken locally produced,
the distributor can redirect it to another buyer, such as a hotel, restaurant or the traditional
market. So, even the cold-chain requirement is not applicable in the same way to both imported
and domestic products. Since there is not an "equivalent internal requirement", Ad Note to Article
III is not applicable to the case. This is further demonstrated by Article 22(1) of MoA Regulation
34/2016 as it now requires importers, when applying for an Import Recommendation, to submit a
distribution plan for the imported chicken, which, according to the template annexed to the
legislation, shall include in advance information on the type of meat, the quantity, the name and
address of the establishments/buyers and the product's price. Brazil considers that the importer is
not only limited to the end-uses listed in the legislation but also to a pre-defined distribution plan
within the allowed uses, preventing the importer from actually distributing the imported chicken
meat and chicken product after the import operation occurs according to the best business offers it
may be able to get.

120. Regardless of the Panel's decision concerning the order of analysis and the exercise of
judicial economy, nothing in the WTO rules prevents the Panel from making findings on each one
of these inconsistencies challenged by Brazil. This would be particularly important in this case
because of the shifting nature of Indonesia's legislation regarding the intended use requirement. In
the absence of findings regarding the inconsistency of this measure both as a border measure and
as an internal measure, Indonesia could continue to evade its obligations by simply reinforcing in
new legislation the particular aspect of the intended used requirement that was not addressed by
the Panel.

3. Claims related to sanitary barriers

3.1. Relevant legal standard: Article 8 and Annex C(1)(a) of the SPS Agreement

121. Article 8 of the SPS Agreement provides that Members shall observe the provisions of Annex
C in the operation of control, inspection and approval procedures regarding sanitary and
phytosanitary measures. Annex C gives shape and content to Article 8 and a violation of the rules
of Annex C necessarily entails a violation of Article 8.
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122. The most relevant provision of Annex C in the present dispute is Annex C(1)(a), which
determines that "Members shall ensure, with respect to any procedure to check and ensure the
fulfilment of sanitary or phytosanitary measures, that" […] "such procedures are undertaken and
completed without undue delay".

123. The relevant aspects in the interpretation of Annex C (1)(a) to be taken into account in the
present dispute are (i) the identification of which are the "procedures designed to check and
ensure" a sanitary measure; and (ii) the understanding that the term undue delay does not refer
exclusively to a "delay", but also to an absence of formal response from the authorities when
certain sanitary procedure was initiated before them.

124. Concerning the first aspect, the term "procedure" is defined in the SPS Agreement in a
manner as broad as possible. This interpretation has been upheld in several WTO cases.7 The main
feature to be established when ascertaining whether a certain procedure falls under the purview of
Article 8 and Annex C(1)(a) is to determine that it "is aimed at 'checking and ensuring the
fulfilment of sanitary or phytosanitary measures', and is undertaken in the context of 'control,
inspection, or approval'". While Article 8 and Annex C list certain types of procedures as expressly
falling within their ambit, the terms "including" in Article 8, and "include, inter alia", in footnote 7
to Annex C, clarify that the lists are illustrative.

125. Previous WTO jurisprudence, in analyzing the term "procedures" as used in Annex A(1),
upheld the understanding that "procedure" has to be interpreted in a wide sense. The panel report
in US-Animals (para 7.40), stated that "the reference to 'procedures' in the second sentence of
Annex A(1) is broad enough to encompass both procedures of general application as well as the
specific implementation of a procedure in a particular instance."

126. On the basis of these elements, the term "approval procedures" in both Article 8 and Annex
C encompass "procedures applied to check and ensure the fulfilment of one or more substantive
SPS requirements the satisfaction of which is a prerequisite for the approval to place a product on
the market". The negotiation of an "International Veterinary Certificate" clearly constitutes a pre-
marketing approval requirement.

127. Concerning the second aspect, the term "undue delay" does not only refer to a "delay"
stricto sensu, but also refers to occasions where there is no response at all from a Member's
competent authority. This interpretation was clarified by the Panel in EC – Biotech (para 4.167),
which found that the ordinary meaning of the term "delay" is "(a period of) time lost by inaction or
inability to proceed". The requirement in Annex C(1)(b) of the SPS also provides context for this
interpretation, particularly regarding the necessity for the competent authorities to "promptly
examine the completeness of the documentation" and to "inform the applicant in a precise and
complete manner of all deficiencies". Moreover, in EC–Biotech, the Panel interpreted that "without
undue delay" could adequately mean "without an unjustified loss of time". The Panel also stated
that "[a]lthough Members are in principle allowed to take the time that is reasonably needed to
determine with adequate confidence whether their relevant SPS requirements are fulfilled, they are
also required to proceed with their SPS approval procedures as promptly as possible. Therefore, a
Member is not allowed to freely decide when it will finish the undertaking and completion of the
approval procedures. In cases in which there is a delay, the Member should ensure that it is not
excessive or unwarranted and its causes are rightfully justified". Therefore, although possible in
practice, a delay must be reasonable and cannot be unjustified and disproportionate. The absence
of response naturally represents an unjustified and disproportioned delay in the sense of Article
C(1)(a).

3.2 Legal Analysis: The undue delay of Indonesia to negotiate an "International

Veterinary Certificate" with Brazil violates Article 8 and Annex C(1)(a)

128. The negotiation of an International Health Certificate is the first step undertaken by
countries interested in the trade of animal products, including chicken. It is clear that the
negotiation of a valid International Health Certificate is encompassed by the term "approval
procedures" referred to by Article 8 and Annex C as it is a procedure "applied to check and ensure

7
Panel Report, US – Poultry (China), para. 7.363; Appellate Body Report Australia – Apples, para. 438;
Panel Report, US – Animals, para. 7.68
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the fulfillment of one or more substantive SPS requirements the satisfaction of which is a
prerequisite for the approval to place a product on the market".

129. The rule in Annex C(1)(a) determines that the competent sanitary authority must take the
necessary steps to ensure that a sanitary procedure initiated before it is concluded. There is no
defined deadline in Annex C(1)(a) and that the assessment of "undue delay" should be made on a
case-by-case basis. In the present dispute, the complete lack of response after seven years of the
first proposal is a clear evidence that Indonesian authorities have unjustifiably delayed the
procedures to check and ensure the fulfillment of the sanitary requirements that would allow for
the exportation of Brazilian products. By not answering, the Indonesian authorities violated Annex
C(1)(a) of the SPS Agreement. Even where a proposal is inaccurate or does not contemplate all
the necessary elements required by the Indonesian legislation, Indonesia must give a proper
response in order to allow for the corrections and additions necessary. Annex C stems logically
from Article 8 of the SPS Agreement. As the two provisions are intertwined, a breach of Annex
C(1)(a) entails a breach of Article 8.

130. Indonesia attempted to justify its inaction by arguing that the lack of response is Brazil's
own fault: Brazil did not present the appropriate documents and information related to the halal
requirements related to two different business units. First, compliance with halal requirements has
never been an issue for Brazil, which has had for several years its two main certification bodies
duly approved by Indonesia. Second, halal certification guards no connection with the conclusion
of the sanitary procedures required by Indonesia. Halal certification is not a SPS procedure and
should not be confounded with a sanitary requirement nor considered in a government-to-
government sanitary approval process of an International Health Certificate. Indonesia does not
dispute that halal certification is not covered by the scope of the SPS Agreement.

V. INDONESIA'S DEFENSES UNDER ARTICLE XX OF THE GATT

The intended use is not justified under Articles XX (b) and (d) of the GATT

131. Indonesia seeks to justify the intended use requirement under Article XX(b) of the GATT
1994, as it contributes to the protection of human life or health by eliminating the risk of freezing
and thawing products for sale to consumers. It sustains that frequent thawing and freezing would
increase microbial growth and facilitate product deterioration as this process would "mechanically
damage the cell membranes and reduce water-holding capacity". However, there is no meaningful
connection between limiting the sale of frozen chicken to places with cold chain facilities and the
alleged objective pursued. First of all, if traditional markets have no cold storage, how is it possible
that the chicken will be refrozen? Secondly, the freezing process is capable of ensuring that the
meat will remain fresh for a longer period, as compared to the meat that has never been frozen.
Indonesia would have more reasons to prohibit the sale of fresh chicken in markets without cold
storage than prohibiting the sale of frozen chicken. Finally, Indonesia has offered no evidence to
support its claims that food safety is the objective of the intended use requirement.

132. In any event, the intended use requirement is clearly not "necessary". There are less trade-
restrictive measures which could satisfy Indonesia's appropriate level of protection, such as rules
regulating the thawing of frozen chicken to be offered for sale and/or restricting the possibility of
refreezing previously thawed chicken for sale in traditional markets. An outright prohibition of the
sale of frozen chicken in those venues is in excess of the aim of protecting human life or health
due to the alleged "risk of freezing and thawing products". Indonesia's assertions on this subject
contradict the actual practice of its government. 9,000 tons of imported frozen meat from the
United States was recently offered for sale in Indonesian traditional markets. Indonesia confirmed
that the imported meat was sold frozen but did not inform whether it ensured that the products
were exclusively kept in cold-chain systems at the points of sale. Given that these systems are
normally not available in wet markets, it is improbable that the intended use requirement was duly
enforced.

133. Indonesia also alleges that the intended use requirement is provisionally justified under the
Article XX (d) because it is designed to secure compliance with Indonesia's laws and regulations on
public health (namely, those setting out sanitary requirements), deceptive practices and customs
enforcement. Indonesia has failed to provide any evidence that the measure contributes to the
enforcement of any particular law related to food safety. As noted by one of the third parties,
there is no basis in the text, structure, or the legislative history of Law 18/2009 and Law 8/1999 to
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support the claim that this measure was designed to secure compliance with the food safety and
consumer protection provisions cited by Indonesia. The recent decision to authorize the sale of
imported frozen beef during Ramada at traditional markets demonstrates that the intended use
requirement is only a protectionist tool. Similarly, Indonesia has not indicated whether there would
not be any less trade-restrictive alternative measures to secure compliance with its laws and
regulations. In any event, Indonesia has not demonstrated that the intended use respects the
chapeau of Article XX of the GATT 1994.

The positive list is not justified under Article XX (d) of the GATT 1994

134. Indonesia does not dispute the existence of a prohibition on the importation of chicken cuts.
However, it tried to justify this prohibition on the basis of Article XX(d) of the GATT 1994, claiming
that it "was necessary to secure compliance with Indonesia's laws and regulations dealing with
halal food. According to Indonesia, its main concern has been that certain exporters may try to
circumvent Indonesia's halal requirements by sourcing chicken parts from slaughterhouses that do
not produce halal chicken, and passing them off as halal.

135. Indonesia failed to demonstrate that this measure is necessary to secure compliance with its
halal requirements. In reality, MoA Regulation 58/2015 (revoked by MoA Regulation 34/2016) and
MoT Regulation 05/2016 (as altered by MoT 37/2016) do not impose the same restriction, for
instance, in relation to the importation of cuts of lamb and goat, which should also comply with
halal requirements. This exception demonstrates that Indonesia itself does not consider it
necessary in all cases to restrict imports of cuts of animal products in order to ensure compliance
with halal requirements. Moreover, there are less trade-restrictive alternative measures to
guarantee the halalness of the products, for example, to implement certification procedures with
foreign slaughterhouses seeking to export to Indonesia. Continuous certification procedures –
which are a common feature of international trade of food products – would ensure the halalness
of the products leaving the slaughterhouses and would also prevent deceptive practices with
regard to the compliance with halal requirements. The positive list requirement cannot be justified
under paragraph (d) of Article XX.

The limited application and validity periods are not justified under Article XX(d)

136. Indonesia frailly attempts to justify the limited application and validity period under Article
XX(d) of the GATT 1994 as a measure "designed to secure compliance with Indonesia's laws and
regulations addressing halal, public health, as well as deceptive practices (consumer protection)
and customs enforcement relating to halal and safety". It is difficult to see any connection between
the limited application and validity periods with the observance of halal requirements. Moreover,
compliance with halal and animal health requirements can be obtained through much less trade-
restrictive measures, such as proper certification procedures and verification, and information on
trade flows can easily be obtained through other means.

The fixed license terms are not justified under Article XX (d) of the GATT 1994

137. According to Indonesia, the fixed license terms "were designed to secure compliance with
Indonesia's laws on halal and public health, as well as deceptive practices and customs
enforcement relating to halal and food safety". Indonesia based its reasoning on the consideration
that, allegedly, the fixed license terms "enable[s] the Government to monitor foreign trade and to
facilitate customs enforcement. They provide an estimate of the volume of imports that would
enter Indonesia at a particular port and at a given time so that the Government can best allocate
its limited resources in order to expedite customs clearance". However, Indonesia had not
explained how the fixed license terms bear any relation to the observance of halal or sanitary
requirements. Secondly, according to Indonesia, "many of these terms are not as stringent", as
"importers may identify more ports than they ultimately use, or higher quantities of import than
they ultimately import". If this statement is accurate, one must wonder what actually the purpose
of fixing the license terms is. The only purpose they can have is to serve as yet another trade
restrictive tool to close the Indonesian market.
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The halal labelling is not justified under Article XX of the GATT 1994

138. Indonesia seeks to justify the implementation of its halal labelling certification procedures
under subparagraphs (a) and (d) of Article XX of the GATT 1994. Under Article XX (a), Indonesia
argues that "the halal requirements are necessary to protect public morals".

139. Brazil does not challenge Indonesia's right to establish the halal requirements nor questions
the fact that these requirements are necessary to protect its religious beliefs and public morals. As
the world's leading exporter of halal chicken, Brazil is fully aware of the importance of respecting
the different halal standards adopted by different Muslim countries. As required by Indonesia, halal
slaughtering in Brazil is performed by the country's poultry slaughterhouses through manual
slaughtering.

140. Brazil contends that Indonesia did not provide any evidence to justify the "necessity" of the
discrimination between domestic and imported chicken meat and chicken products to protect its
public morals, as required by Article XX or how this discriminatory treatment contributes to further
the public morals of the country. Also, even if it was possible to justify the discriminatory 5-year
grace period halal certification and labeling requirements under subparagraph (a) of Article XX,
this measure would not pass the test of the chapeau. Indeed, to the extent that the measure is
only applicable to imported products, it is on its face a violation of Article III:4 of the GATT 1994.

141. Furthermore, Indonesia tries to explain that halal labelling would be applicable only to
packaged products and, therefore, because domestic chicken meat and chicken products are
mainly sold in the traditional markets and are not necessarily packaged like imported products,
then the halal label would not be mandatory for the domestic products. However, Indonesia's
explanation forgets that Law 33/204 (article 38) does not make any reference with regard to the
necessity to attach the halal label only to packaged products. Instead, it provides for three
different possibilities to the attachment of the label: (i) in the package of the product; (ii) in a
specific part of the product; and/or (iii) in a specific place of the product. That is, according to
Indonesia legislation, packaging is not a reason to justify the discriminatory treatment.

142. The same applies to the defense under paragraph (d) of Article XX. Indonesia has not
provided any evidence that the challenged measures contribute to the enforcement of any
particular law or regulation. It is not sufficient to simply asserts that "the implementation of halal
requirements is ‘necessary' to secure compliance with these domestic legal provisions" without
providing any evidence or further clarification that would justify the discriminatory treatment
against imported products.

VI. CONCLUSION

143. Brazil respectfully requests that the Panel find that:

(i) Indonesia's general prohibition on the importation of chicken meat and chicken products is
inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture;

(ii) Indonesia's prohibition on the importation of chicken cuts and other prepared or preserved
chicken meat is inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement
on Agriculture;

(iii) Indonesia's restrictions on the use of imported chicken meat and chicken products is
inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture;

(iv) Indonesia's restrictive import licensing procedures is inconsistent with Article XI:1 of the
GATT 1994, Article 4.2 of the Agreement on Agriculture, and Article 3.2 of the Agreement on
Import Licensing Procedures;

(v) Indonesia's restrictive transportation requirements for imported chicken meat and chicken
products is inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture;
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(vi) Indonesia's restrictions on the use of imported chicken meat and chicken products is
inconsistent with Article III:4 of the GATT 1994;

(vii) Indonesia's implementation of halal labelling requirements is inconsistent with Article III:4
of the GATT 1994; and

(viii) Indonesia's undue delay with regard to the approval of sanitary requirements is inconsistent
with Article 8 and Annex C of the SPS Agreement.
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ANNEX B-2

INTEGRATED EXECUTIVE SUMMARY OF THE ARGUMENTS OF INDONESIA

I. INTRODUCTION

1. This dispute raises fundamental issues as to how a WTO Member may properly structure its
laws and regulations to promote food safety and ensure compliance with its religious
requirements. Indonesia is home to the fourth largest population in the world with over 255 million
citizens. It is home to the largest Muslim population in the world. Many devout Muslims in
Indonesia consume only halal food, which means they are prohibited from consuming pork and
other meat not slaughtered according to the Islamic Shar'ia, and from consuming products that
have been in contact with non-halal foods. The burden falls heavily on the Indonesian Government
to ensure that the food available to Muslim Indonesians conforms to halal requirements as well as
to ensure that Indonesia's food supply is adequate and safe. Indonesia believes that these societal
values are of the utmost importance. Indonesia also believes that it has struck the proper balance
between protecting the religious principles of its citizens and respecting its WTO obligations.

2. Brazil challenged Indonesia's laws and regulations relating to the importation of chicken
meat and chicken products as a general prohibition (or overarching measure) on the importation
of chicken meat and chicken products, as well as individual measures. The individual measures
challenged by Brazil are: certain aspects of Indonesia's import licensing regime, including the
positive list and intended use requirements; the alleged discriminatory implementation of halal
labelling requirements; the alleged restrictions on the transportation of imported chicken products;
and the so-called delays in the approval of sanitary requirements for the importation of chicken.
Brazil appears to regard this dispute as an "open-and-shut case". It is not.

3. Indonesia has no intention to ban, restrict or limit imports of chicken meat or chicken
products from any country, including Brazil. Indonesia only wishes to ensure that chicken meat
and chicken products are safe, healthy, wholesome and halal. Moreover, Indonesia is committed to
further liberalize its trade by enacting measures that are fully consistent with Indonesia's
legitimate interests in ensuring halal compliance, food safety and security, and safe and efficient
customs and quarantine administration. In fact, Indonesia's efforts at further liberalization have
resulted in the termination of some measures challenged by Brazil in these proceedings. Indonesia
will address these issues in detail in this integrated executive summary.

4. It is well known that complaining WTO Members engaging in WTO dispute settlement
proceedings must meet high standards. These high standards are reflected in the stringent
requirements for a panel request, which must plainly connect the challenged measures with the
provisions of the covered agreements claimed to have been infringed, so that the respondent is
aware of the basis for the claims. In addition, the Appellate Body has noted that the requirement
to make a prima facie case – made in the course of submissions to the panel – demands the same
high standards. It stated that "the evidence and arguments underlying a prima facie case therefore
must be sufficient to identify the challenged measure and its basic import, identify the relevant
WTO provision and obligation contained therein, and explain the basis for the claimed
inconsistency of the measure with that provision".1 Furthermore, each factual assertion must be
proven.2

5. With all due respect, Indonesia is of the view that Brazil has not met these high standards in
the course of these proceedings. As explained in greater detail below, Brazil has submitted many
Indonesian laws and regulations to the Panel but has not properly identified the WTO-
inconsistencies therein; it has cited several provisions in WTO agreements but has not explained
the basis for the claimed inconsistency of the measure with those provisions. Brazil has also not

1
Appellate Body Report, US – Gambling, para. 141.
2
Panel Report, Argentina – Textiles and Apparel, para. 6.35.
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always been clear as to whether it is challenging current or expired aspects of Indonesia's import
licensing regime.3

6. Moreover, throughout these panel proceedings (even at very late stages), Brazil made
changes to the scope of its claim on the general prohibition/overarching measure, the import
licensing regime and the halal labelling requirement. These constant changes result in a lack of
clarity as to what Brazil is actually challenging in these proceedings and deprive Indonesia of the
ability to defend itself properly. Furthermore, Brazil has challenged certain Indonesian measures
under the incorrect WTO covered agreement and has also challenged the same aspects of the
same measures under different WTO covered agreements, which have different obligations.
Indonesia therefore considers that Brazil has not met its burden of proof to demonstrate that the
measures it is challenging in these proceedings are inconsistent with Indonesia's WTO obligations.
In addition, Brazil has not convincingly responded to Indonesia's arguments and evidence
submitted with respect to each of these claims and it has not convincingly rebutted Indonesia's
defences under Article XX of the GATT 1994, where applicable. Importantly, Brazil has not
provided any relevant less-trade restrictive alternatives for the challenged measures.

7. There are many weaknesses in Brazil's arguments and evidence with respect to each of the
challenged measures. Indonesia submits that when a complainant fails to support its claims with
adequate arguments and evidence, these claims must necessarily fail. A panel, in this situation,
must find that the complainant failed to make its prima facie case of violation. Indeed, it is a well-
settled principle of international law that a sovereign State's measure will be treated as
consistent with that State's international obligations until proven otherwise.4

8. Indonesia has submitted detailed legal arguments and comprehensive factual explanations
with respect to its import licensing regime, including the intended use, positive list and
transportation requirements; halal labelling and certification requirements. Indonesia has
submitted charts detailing every step of the import licensing procedures, has explained fully the
roles of the main government authorities involved in these procedures, and has clarified the scope
and coverage of its own laws and regulations. Brazil has not fully engaged with, or properly
responded to, any of these detailed legal arguments and factual explanations.

9. Like many other active WTO Members, Indonesia is currently involved in several dispute
settlement proceedings both as complainant and as respondent. Indonesia wishes to stress that
the outcome of those disputes is not relevant for the conduct of this dispute. The outcome of this
dispute must be determined on the strengths and weaknesses of the legal arguments and
evidence put forward by both Brazil and Indonesia in this dispute. 5

II. INDONESIA'S REQUEST FOR A PRELIMINARY RULING

10. Indonesia submitted its request for a preliminary ruling as an attachment to its first written
submission. Indonesia considered that Brazil's panel request is problematic in several respects.
With respect to the alleged general prohibition/overarching measure, Indonesia submitted that
Brazil failed to provide a brief summary of the legal basis of the complaint sufficient to present the
problem clearly as required by Article 6.2 of the Understanding on Rules and Procedures Governing
the Settlement of Disputes (DSU), as it listed several elements of this measure, several
Indonesia's legal instruments and several WTO provisions without making a connection between
them.6

11. Moreover, Indonesia noted that the alleged general prohibition/overarching measure
described in Brazil's panel request does not correspond to the description of the alleged general
prohibition/overarching measure in Brazil's first written submission. In its panel request, Brazil
described this measure as a combined operation of seven individual measures resulting in the
general prohibition on the imports of chicken. In its first written submission, Brazil decided to
remove one such individual measure (halal labelling requirement) changing the scope of the

3
See, for example, Indonesia's opening statement at the second meeting, paras. 5-6 and Brazil's
rebuttal submission, para. 155.
4
See, inter alia, Appellate Body Report, US – Carbon Steel, para. 157.
5
The information in this section is based on, inter alia, Indonesia's opening statement at the first
meeting, paras. 3-4; and Indonesia's opening statement at the second meeting, paras. 2-8.
6
Indonesia's Request for a Preliminary Ruling under Article 6.2 of the DSU, paras. 1.14-1.28.
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general prohibition/overarching measure. It then referred to this measure for the first time as an
unwritten measure.7 Similarly, Brazil failed to describe the objective of the alleged general
prohibition/overarching measure in its panel request, but only referred to it in its first written
submission. However, the objective of an alleged unwritten overarching measure plays a pivotal
role in defining the measure at issue and, by not referring to it in the panel request, Brazil has not
complied with the specificity requirements in Article 6.2 of the DSU. 8

12. Furthermore, Indonesia noted that Brazil's challenge to Indonesia's import licensing regime
"as a whole" was not identified in its panel request, and was thus, outside the terms of reference
of the Panel.9 Along similar lines, Indonesia claimed that Brazil's challenge to an alleged import
prohibition on other prepared or preserved chicken meat was not identified in Brazil's panel
request and was therefore outside the terms of reference of the Panel.10

13. Finally, Indonesia argued that, to the extent that Brazil was challenging Indonesia's
measures under Article 1 of the Agreement on Import Licensing Procedures (Import Licensing
Agreement), the Panel should refrain from entertaining such claims, as Article 1 was not
mentioned in Brazil's panel request, and was thus outside the terms of reference of the Panel. 11

III. SYSTEMIC ISSUES ARISING IN THIS DISPUTE

A. BRAZIL'S CLAIM ON THE ALLEGED GENERAL PROHIBITION/OVERARCHING MEASURE IS A "MOVING

TARGET" FOR INDONESIA AND IS NOT SUPPORTED BY RELEVANT EVIDENCE

14. Brazil submitted that Indonesia maintains "several prohibitions or restrictions on the
importation of chicken meat and chicken products, which, combined, have the effect of a general
prohibition on the importation of these products". 12 Brazil described this measure as an
overarching measure/general prohibition comprising the following elements: the prohibition of the
importation of non-listed products; prioritization of "national food" over "food import"; prohibitions
or restrictions on imports of essential and strategic goods; limitations on chicken meat and chicken
products to certain intended uses; alleged undue refusal to approve the health certificates for
poultry products; alleged prohibitions and/or restrictions to importation through Indonesia's import
licensing regime; and alleged import prohibition imposed through the halal labelling requirements
for imported chicken meat and chicken products.13 In its first written submission, Brazil dropped
the halal labelling requirement so that the description of the overarching measure/general
prohibition then only included six elements.14

15. Indonesia raised systemic concerns with respect to the manner in which Brazil described the
alleged general prohibition/overarching measure and its challenge throughout these proceedings,
as well as the inadequate nature and amount of evidence Brazil submitted to prove the existence
of this measure. In Russia – Tariff Treatment, the panel acknowledged that if neither the
respondent nor the panel were able to pin down the measure whose consistency with the covered
agreements is contested, "[t]his could raise issues of due process". 15 Moreover, it is well-
established in WTO jurisprudence that "the complaining party must 'present relevant arguments
and evidence during the panel proceedings showing the existence of the measures, for example, in
the case of challenges brought against unwritten measures'". 16 It is also generally acknowledged
that a panel cannot lightly accept the complainant's assertion that the challenged unwritten

7
Brazil's first written submission, paras. 136-139.
8
Indonesia's Request for a Preliminary Ruling under Article 6.2 of the DSU, paras. 1.29-1.41. See also
Indonesia's response to Panel Question No. 68.
9
Indonesia's Request for a Preliminary Ruling under Article 6.2 of the DSU, paras. 5.1-5.6.
10
Indonesia's Request for a Preliminary Ruling under Article 6.2 of the DSU, paras. 1.43-1.48.
11
Indonesia's Request for a Preliminary Ruling under Article 6.2 of the DSU, paras. 1.49-1.52.
12
See, Request for the Establishment of a Panel by Brazil, Indonesia – Measures concerning the
Importation of Chicken Meat and Chicken Products, WT/DS484/8, 21 October 2015 (Brazil's panel request), pp.
1-2.
13
Brazil's panel request, p. 2.
14
Brazil's first written submission, para. 74.
15
Panel Report, Russia – Tariff Treatment, paras. 7.291, 7.302.
16
See Panel Report, Russia – Tariff Treatment, para. 7.338 (citing Appellate Body Report, US –
Continued Zeroing, para. 169).
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measure exists.17 This means that the evidentiary burden for a complainant challenging an
unwritten measure must necessarily be higher than that arising from challenges to written
measures, whose existence is not disputed.18 Brazil has itself recognised this heightened burden.19

16. With respect to the manner in which Brazil described the alleged general
prohibition/overarching measure and its challenge, until the end of the Panel's proceedings, Brazil
did not explain clearly what exactly it was challenging and on what basis. Brazil referred to the
measure at issue as: "a general prohibition on the importations" of chicken meat and chicken
products, "de jure" and "de facto" inconsistent with Indonesia's obligations; "a general proposition,
concerted action or practice", an unwritten, overarching measure, distinct from its elements; and
"on-going conduct" of "general and systematic application". In its panel request, Brazil stated that
the measure at issue consists of seven prohibitions or restrictions, which are "combined" (i.e.
interact and work in concert). In its first written submission, Brazil argued that the measure at
issue consists of only six elements. In its other submissions, Brazil argued that the alleged general
prohibition/overarching measure could consist of "six, seven or eight (or more, or fewer)" WTO-
inconsistent measures. And then, in its response to Panel Question No. 5.a.v, Brazil suggested that
other measures, in particular the direct transportation requirement, "could also be part of the
general prohibition".20

17. In its first written submission, Brazil specified the alleged objective of the general
prohibition/overarching measure for the first time, and then expanded upon its argument in its
opening statement at the first meeting of the Panel with the parties. In particular, Brazil clarified
that "the combined interaction of different individual WTO-inconsistent measures constitutes an
unwritten overarching measure and was conceived to implement an official trade policy based on
the overriding objective of restricting imports to protect domestic production". Brazil referred to
this policy as the requirement of "self-sufficiency". Brazil described the alleged requirement of
"self-sufficiency" as the "overriding objective" and one of the elements of the measure at issue, as
well as a "guiding principle". However, Indonesia explained that a measure and its objective are
different concepts.21

18. Indonesia acknowledges that a complainant has certain discretion to describe the measure it
is challenging in the way it considers necessary. Nevertheless, Indonesia submits that once the
complainant described the measure in one way, it is not free to stretch and squeeze its content
throughout the panel proceedings. Doing so would compromise the ability of the respondent to
prepare its defence, as in the present case. Moreover, given that the challenge to a rule or norm of
"general and systematic application" is different from the challenge to a measure as applied, or as
on-going conduct, or as an overarching measure, a complainant that has changed the description
of the challenged measure, or the essence of its challenge to that measure, would have to start to
make its prima facie case anew, possibly submitting additional evidence. Brazil has itself
acknowledged that the description/characterization of the measure at issue by the complainant
informs the evidence and arguments that are required to prove that the measure exists.22

19. A clear and consistent description of the content of the challenged measure is especially
important in circumstances where the measure is unwritten, as in the present dispute. By
definition, the alleged general prohibition/overarching measure is not a measure set out in any
laws, regulations or official policy documents. It is rather a construction that Brazil has devised in

17
See Panel Report, Russia – Tariff Treatment, paras. 7.348, 7.380. See also Appellate Body Report, EC
and certain member States – Large Civil Aircraft, para. 792.
18
See Panel Report, Argentina – Import Measures, para. 6.323.
19
Brazil's rebuttal submission, para. 12. See these issues discussed in Indonesia's first written
submission, paras. 96-109; Indonesia's opening statement at the first meeting, paras. 49-58; Indonesia's
rebuttal submission, paras. 65-75; Indonesia's opening statement at the second meeting, paras. 10-21;
Indonesia's responses to Panel Questions No. 5.c, 6-8, 68, 70; Indonesia's comments on Brazil's responses to
Panel Questions No. 68, 70, and 71.
20
See Indonesia's response to Panel Question No. 6; Indonesia's rebuttal submission, para. 66 (citing
inter alia, Brazil's first written submission, paras. 76, 173; Brazil's response to Indonesia's request for a
preliminary ruling, para. 32).
21
Indonesia's rebuttal submission, para. 66; and Indonesia's comment on Brazil's response to Panel
Question No. 68 (citing Brazil's first written submission, paras. 75 and174; Brazil's opening statement at the
first meeting, para. 11; and Brazil's responses to Panel Questions No. 5.b and 68).
22
Brazil's response to Panel Question No. 8.b (citing Appellate Body Report, Argentina – Import
Measures, para. 5.107). See Indonesia's rebuttal submission, paras. 67-68; Indonesia's opening statement at
the second meeting, paras. 10 and11.
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order to cluster various otherwise distinct measures together to suggest that they supposedly
advance a common objective. The very existence and the precise contours of the alleged
overarching, unwritten measure are, therefore, uncertain, and should have been clearly
established by Brazil.23

20. With respect to the evidence that Brazil presented to prove that the measure at issue exists,
the only pieces of evidence Brazil relied upon were: trade statistics showing the absence of imports
of chicken into Indonesia from Brazil, and certain legal instruments in which some individual
elements of the alleged general prohibition/overarching measure are established. Brazil did not
provide any evidence showing how the alleged elements of the measure at issue operate together,
as opposed to being merely individual unrelated "trade restrictions". Furthermore, Brazil did not
prove its assertion that each of these elements was indeed established with a view to achieving
Indonesia's alleged objective of "self-sufficiency". Finally, Brazil failed to substantiate its assertion
that the alleged general prohibition/overarching measure is applied in a "general and systematic"
manner.24

21. To be clear, Indonesia does not argue that the above elements must be demonstrated in
each and every dispute involving unwritten measures. Brazil's evidentiary burden stems from its
own characterization/description of the measure at issue in its panel request and its subsequent
clarifications in the course of the Panel proceedings.25

22. At the very end of these proceedings, in its response to a Panel's question following the
second substantive meeting of the Panel with the parties, Brazil attempted to introduce additional
pieces of evidence, such as a letter signed by Indonesia's Director General of Livestock, Ministry of
Agriculture, and four news articles allegedly quoting Indonesian government officials. Indonesia
requested the Panel to disregard these documents, as they constitute evidence-in-chief and,
pursuant to paragraph 8 of the Working Procedures for this dispute, had to be submitted "no later
than during the first substantive meeting". Most of the documents submitted were dated well
before the deadline for submitting factual evidence, and were in Brazil's possession. Brazil did not
even try to show good cause as to why it should be allowed to submit evidence-in-chief at that late
stage. Instead, it argued that it was entitled to submit evidence-in-chief in response to a Panel's
question.26

23. But even if those pieces of evidence were properly before the Panel, they do not provide any
meaningful support for Brazil's allegation that the general prohibition/overarching measure exists.
Brazil's evidence is contradictory and does not prove that the lack of imports of chicken meat and
chicken products from Brazil into Indonesia is caused by the alleged requirement of self-
sufficiency. On the contrary, as Indonesia demonstrated throughout these proceedings, the real
reason for the lack of imports is Brazil's own failure to comply with Indonesia's import procedures.
With respect to the news articles, they appear to contain "quotes" of Indonesian authorities taken
out of context, and do not portray the accurate picture of the Indonesian market for chicken. 27

24. Based on these considerations, the fact that, even at the very end of the Panel proceedings,
Brazil had not provided a clear description of the measure at issue and the nature of its challenge,
and had not submitted adequate evidence demonstrating that this measure exists means that
Brazil failed to make its prima facie case. Indeed, when various factual assertions of Brazil
regarding the alleged content of the measure are assessed in a holistic manner, it becomes clear
that the measure in the way it is described by Brazil in its different submissions does not even
exist.28

23
Indonesia's rebuttal submission, para. 69 (citing Appellate Body Report, EC and certain member
States – Large Civil Aircraft, para. 792).
24
Indonesia's rebuttal submission, paras. 100-109; Indonesia's opening statement at the second
meeting, para. 13.
25
See Indonesia's opening statement at the second meeting, para. 14 (citing Appellate Body Report,
Argentina – Import Measures, para. 5.108; and Panel Report, Russia – Tariff Treatment, para. 7.296, footnote
448).
26
See Indonesia's comment on Brazil's response to Panel Question No. 70; and Brazil's comment on
Indonesia's response to Panel Question No. 70.
27
Indonesia's comment on Brazil's response to Panel Question No. 70.
28
Indonesia's rebuttal submission, paras. 75 and 109.
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B. BRAZIL REQUESTS THE PANEL TO MAKE RECOMMENDATIONS ON MEASURES THAT HAVE EXPIRED

25. In the course of the proceedings, Indonesia explained that some of the measures
challenged by Brazil, namely, the intended use requirement, the positive list requirements, and
certain aspects of Indonesia's import licensing regime, had expired. These new measures
significantly liberalised the procedures and conditions to import chicken into Indonesia.

26. Brazil claimed that the intended use requirement in MoA Regulation No. 139/2014 limited
the importation and distribution of imported chicken to certain uses only, i.e. hotels, restaurants,
catering, manufacturing, other special needs and modern markets).29 Indonesia notes that this
Regulation was modified by MoA Regulation No. 34/2016,30 which terminated the intended use
requirement. Article 31(1) of MoA Regulation No. 34/2016 now permits the sale of frozen chilled
and chicken in any market where these products can be sold, i.e. any market with cold-chain
facilities, including traditional markets.

27. Brazil also challenged the positive list requirements, which prohibited the importation of
chicken cuts that were not listed in the relevant annexes to MoA Regulation No. 139/2014 and MoT
Regulation No. 46/2013.31 MoA Regulation No. 139/2014 was modified by MoA Regulation No.
34/2016, and MoT Regulation No. 46/2013 was modified by MoT Regulation No. 59/2016, which
terminated the positive list requirements. Pursuant to Article 7(3) of MoA Regulation No. 34/2016,
importers can import all chicken products as long as they apply for an Import Recommendation
and the imported products comply with the ASUH requirements (i.e. products are safe, healthy,
wholesome and halal).

28. Brazil also claimed that Indonesia's previous import licensing regime restricted the
importation of chicken as importers had to apply for an Import Recommendation during a specific
period (application period) that were valid for four months (validity period). Importers also had to
specify the price, quantity, country of origin, port of entry and intended use of imported products
without the ability to modify this information during the pertinent validity period (fixed-license
terms).32 As stated above, MoA Regulation No. 139/2014 was modified by MoA Regulation No.
34/2016, which further liberalised Indonesia's import regime. Article 21 of this Regulation
terminated the application period and Article 30 extended the validity period of Import
Recommendations from four to six months.

29. During the second substantive meeting of the Panel with the parties, Brazil requested the
Panel to review the WTO-consistency of these expired measures.33

30. Indonesia notes that a panel can make only findings, but not recommendations with respect
to measures that have expired.34 Furthermore, even though Brazil's panel request covers "any
amendments, replacements, related measures, or implementing measures", to the extent that the
measure at issue was terminated by an amendment, the amendment necessarily changes the
essence of the measure and, therefore, cannot be ruled upon. This approach finds support in WTO
jurisprudence.35 Thus, Indonesia submits that the provisions that terminate the positive list
requirements, the intended use requirement and the application periods fall outside the Panel's
terms of reference.

31. That said, Indonesia submits that MoA Regulation No. 34/2016 and MoT Regulation
No. 59/2016 can be used as evidence to confirm that the positive list requirements, the intended
use requirement and the limited application periods expired.36

29
Brazil's panel request, pp. 4 and 6.
30
Ministry of Agriculture Regulation No. 34/2016 Concerning Importation of Carcass, Meat, Offal and/or
their Processed Products into the territory of the Republic of Indonesia (MoA Regulation No. 34/2016), Exhibit
IDN-93.
31
Brazil's panel request, p. 4.
32
Brazil's panel request, p. 4.
33
See Brazil's response to Panel Question No. 66 and Brazil's comments on Indonesia's responses to the
Panel Questions after the second meeting, paras. 1-5.
34
See Indonesia's response to Panel Question No. 149.
35
See Appellate Body Report, Chile – Price Band System, paras. 136-137; Panel Report, China – Raw
Materials, para. 7.17; Panel Report, India – Additional Import Duties, paras. 7.62-7.63.
36
See a similar approach in Panel Report, China – Raw Materials, paras. 7.31, 7.33(b).
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32. Indonesia notes that the validity period requirement has not been terminated, but it was
rather modified in Article 30 of MoA Regulation No. 34/2016. This provision, therefore, did not
change the essence of the original measure. Indonesia submits that the Panel has jurisdiction to
rule on the WTO-consistency of the validity period requirement in Article 30 of MoA Regulation No.
34/2016.37

33. In the alternative, if the Panel were to find that it has jurisdiction over the expired
measures, Indonesia submits that the current regime is WTO-consistent for the reasons explained
in detail in its submissions.38 Indonesia's defences under Article XX(b) and (d) of the GATT 1994
would apply, mutatis mutandis, to these measures.

C. BRAZIL HAS CHALLENGED THE SAME ASPECTS OF THE SAME MEASURES UNDER DIFFERENT
AGREEMENTS

1. Relationship between Article 4.2 of the Agreement on Agriculture and Article XI:1
of the GATT 1994

34. Brazil challenged all measures at issue in this dispute, except Indonesia's halal labelling
requirements and Indonesia's alleged failure to approve sanitary requirements, under both Article
XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture. In Indonesia's view,
however, Article 4.2 of the Agreement on Agriculture applies to the exclusion of Article XI:1 of the
GATT 1994. Both provisions regulate quantitative import restrictions. The products at issue (i.e.
chicken meat and chicken products) are goods falling within the HS Codes listed in Annex 1 to the
Agreement on Agriculture (i.e. HS0207 and HS 1602). Article 4.2 of the Agreement on Agriculture
is, therefore, lex specialis vis-à-vis Article XI:1 of the GATT 1994.39

35. Indonesia explained that, when read together, Article 4.2 and footnote 1 of the Agreement
on Agriculture suggest that a complainant would not be able to make its prima facie case of
inconsistency with Article 4.2 unless it establishes two elements: first, that the challenged
measure is a "quantitative import restriction" or another type of restrictions listed, and, second,
that this restriction is not "maintained under … other general, non-agriculture-specific provisions of
GATT 1994 [such as Article XX]". This is a threshold issue in order to determine whether the
challenged measure is "of the kind which have been required to be converted into ordinary
customs duties", and, therefore, "shall not [be] maintain[ed], resort[ed] to, or revert[ed] to"
within the meaning of Article 4.2. In Indonesia's view, the difference between how the burden of
proof is allocated between the complainant and respondent under Article 4.2 of the Agreement on
Agriculture and Articles XI:1 and XX (General Exceptions) of the GATT 1994, respectively, gives
rise to a conflict.40

36. Pursuant to Article 21.1 of the Agreement on Agriculture and the General Interpretative Note
to Annex 1A to the WTO Agreement, when a conflict exists, Article 4.2 prevails and applies to the
exclusion of Article XI:1. Although the Appellate Body is yet to clarify the relationship between
Article XI:1 and Article 4.2 and the allocation of the burden of proof under different elements of
the latter provision, it has accepted in general, in a number of its decisions, that a conflict is
possible.41 The Appellate Body has understood the notion of "conflict" as covering situations in
which rules and procedures under WTO covered agreements cannot be read as complementing
each other.42 Certainly, rules in different agreements that differ on such a fundamental issue as

37
See Indonesia's rebuttal submission, paras. 19-22. See also Indonesia's justification of the validity
period and the fixed license terms in its response to Panel Questions No. 113, 114, 119, and 122 (covering the
new regime as well).
38
See e.g., Indonesia's response to Panel Question No. 77, 88-91 and 113. See also Indonesia's
comments on Brazil's responses to Panel Questions No. 77(d), 85, 86(b), 87, 90, 96, 99, 101 and 103.
39
See, inter alia, Indonesia's first written submission, paras. 66, 74; Indonesia's rebuttal submission,
paras. 80, 84-85.
40
Indonesia's first written submission, paras. 69-73; Indonesia's opening statement at the first
meeting, paras. 23-24, 36; Indonesia's rebuttal submission, para. 81.
41
See, inter alia, Appellate Body Report, EC – Export Subsidies on Sugar, para. 221.
42
See Appellate Body Report, Guatemala – Cement I, para. 65.
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the allocation of the burden of proof cannot be considered as "complementing each other" –
rather, they are "mutually exclusive".43

37. The Appellate Body has explicitly confirmed this hierarchy between the Agreement on
Agriculture and the GATT 1994, in particular between Article 4.2 and Article II:1(b) respectively, in
Chile – Price Band System.44 In Turkey – Rice, the panel expressed the same view with respect to
the relationship between Article 4.2 and Article XI:1 by stating that "[t]he Agreement on
Agriculture deals more specifically than the GATT 1994 with the prohibition on maintaining
quantitative restrictions or quotas".45

38. Brazil and a number of third parties in this dispute, in particular the European Union, New
Zealand and the United States, argued that the burden of showing that the challenged import
restriction meets the second element of the test in footnote 1 to Article 4.2 of the Agreement on
Agriculture rests on the respondent.46 The United States asserted that "[a]dopting Indonesia’s
interpretation would render a successful Article 4.2 claim nearly impossible".47

39. Indonesia is not convinced by these arguments. If the drafters intended to create a general
rule-exception relationship between the two elements of footnote 1 whereby the burden of
satisfying the second element would be on the respondent, they would have used different, more
explicit wording. For example, Article 3 of the TRIMS Agreement (titled "Exceptions") states
explicitly that "[a]ll exceptions under GATT 1994 shall apply, as appropriate, to the provisions of
this Agreement". Similar wording is used in Article 24.7 of the Agreement on Trade Facilitation.
Furthermore, there are many examples of provisions in the covered agreements that convert
exceptions under Article XX of the GATT 1994 into positive obligations, thereby shifting the burden
of proof to the complainant, for example, Article 2.2 of the TBT Agreement. There are also many
provisions in the covered agreements that require the complainant to demonstrate that certain
exceptions do not apply, and, therefore, do not remove the inconsistency of the measure with the
relevant positive obligation, for example, Article 2.4 of the TBT Agreement.48

40. Indonesia further notes that, in an effort to avoid any conflict between Article 4.2 and Article
XI:1, Brazil, Australia, the European Union and Canada suggested that both Articles apply
"harmoniously" to the same type of quantitative import restrictions and that the "scope of
measures prohibited could in principle be the same". 49 If the rules under Article 4.2 and Article
XI:1 were the same, then one of them would be superfluous. This would go against the well-
established principle of the effective treaty interpretation, pursuant to which "[a]n interpreter is
not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to
redundancy or inutility".50

41. Finally, the United States and New Zealand suggested that the Panel begin its analysis with
Article XI:1, and, in this way, it would not have to address the issue of conflict between Article
XI:1 and Article 4.2.51 Indonesia considers that the order of analysis suggested by these third
parties would distort the fundamental due process rights of Indonesia, as it would bear the burden
of proof in a situation where this burden is not envisaged by the applicable law. It is a well-
established principle that panels are free to determine the order of analysis only to the extent that

43
See Indonesia's first written submission, paras. 67and 68; Indonesia's opening statement at the first
meeting, paras. 28 and 29; Indonesia's response to Panel Question No. 49.
44
Appellate Body Report, Chile – Price Band System, para. 186 (see also paras. 187 and 190). See also
Panel Report, Peru – Agricultural Products, paras. 7.19 and7.20.
45
Panel Report, Turkey – Rice, para. 7.48, emphasis added. The EC expressed the same view in that
dispute in ibid, para. 7.47. See Indonesia's opening statement at the first meeting, para. 28.
46
Brazil's rebuttal submission, paras. 18-21; European Union's third party submission, paras. 23-24;
New Zealand's third party submission, paras. 67-70; and United States' third party submission, paras. 57-58.
47
United States' third party submission, para. 58.
48
Indonesia's opening statement at the first meeting, paras. 32-36.
49
See European Union's third party submission, para. 27. See also Brazil's rebuttal submission, para.
16; Australia's third party submission, para. 30; and Canada's third party submission, para. 58.
50
See Appellate Body Report, US – Gasoline, p. 20. See Indonesia's opening statement at the first
meeting, paras. 37-38.
51
United States' third party submission, paras. 59-60; New Zealand's third party submission, para. 71.
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this determination would not "amount to an error of law", or "have repercussions for the substance
of the analysis itself".52

2. Relationship between the Agreement on Import Licensing, Article 4.2 of the

Agreement on Agriculture and Article XI:1 of the GATT 1994

42. Brazil challenges the same aspects of Indonesia's import licensing regime under Article 3.2
of the Licensing Agreement and Article 4.2 of the Agreement on Agriculture and Article XI:1 of the
GATT 1994. These aspects are: (i) positive list requirements, (ii) intended use requirement, and
(iii) limited application and validity periods.53 Furthermore, in Question No. 128, the Panel asked
Brazil to clarify whether Brazil is also challenging the fixed licence terms under Article 3.2 of the
Licensing Agreement and "[i]f so, … where this claim was developed in Brazil's submissions". In
Indonesia's view, this claim, albeit included in Brazil's panel request, was not developed in Brazil's
submissions, which means that Brazil failed to make its prima facie case with respect to this claim.
This was confirmed by Brazil's response to this Question, in which it could not point to any
passages in its first written submission and other submissions where it provided legal arguments
and evidence in support for this claim.54

43. Indonesia explained that the respective scopes of the application of the Import Licensing
Agreement, on the one hand, and Article 4.2 of the Agreement on Agriculture and Article XI:1 of
the GATT 1994, on the other hand, are not the same. Article XI:1 of the GATT 1994 and Article 4.2
of the Agreement on Agriculture establish certain substantive rights and duties, in particular the
prohibition of quantitative import restrictions, whereas, according to Article 1.1 of the Licensing
Agreement, the latter agreement regulates "administrative procedures used for the operation of
import licensing regimes".55 Indonesia explained that, among the measures challenged by Brazil
under the Licensing Agreement, the only measure that actually falls within the scope of this
agreement is the limited application and validity periods. This measure consists of procedural
requirements that prescribe steps for obtaining the right to import chicken meat and chicken
products into Indonesia. This view was shared by the European Union. Brazil, therefore, could not
challenge the same measures under the Agreement on Import Licensing, and Article 4.2 of the
Agreement on Agriculture and Article XI:1 of the GATT 1994.56

44. In any event, in its submissions, Brazil failed to explain why the measures it challenged
under Article 3.2 of the Licensing Agreement in fact constitute import licensing procedures that are
non-automatic, and, therefore fall under Articles 1.1 and 3.2 of the Licensing Agreement.
Furthermore, Brazil did not demonstrate how these measures are inconsistent with the specific
legal obligations under Article 3.2.57

3. Relationship between Article 4.2 of the Agreement on Agriculture, Article XI:1

and Article III:4 of the GATT 1994

45. Another systemic issue arises from Brazil's approach of challenging the same aspects of the
intended use requirement under both Article III:4 of the GATT 1994 (covering internal measures
affecting competitive opportunities in the domestic market), and Article 4.2 of the Agreement on
Agriculture and Article XI:1 of the GATT 1994 (covering border measures affecting competitive
opportunities of imports).58 The Panel's determination of whether the intended use requirement is

52
Appellate Body Report, Canada – Wheat Exports and Grain Imports, para. 109. See Indonesia's
opening statement at the first meeting, para. 39; Indonesia's response to Panel Question No. 49.
53
Brazil's first written submission, paras. 200, 228, 251. See Indonesia's rebuttal submission, para. 96.
54
Indonesia's comment on Brazil's response to Panel Question No. 128.
55
Footnote omitted, emphasis added.
56
See EU's response to Panel Question No. 7 addressed to third parties. See Indonesia's first written
submission, paras. 75-80; Indonesia's responses to Panel Questions No. 48 and 49; Indonesia's rebuttal
submission, para. 96.
57
Indonesia's responses to Panel Questions No. 48, 58-61; Indonesia's rebuttal submission, paras. 114-
117; Indonesia's opening statement at the second meeting, paras. 24-36; Indonesia's comments on Brazil's
responses to Panel Questions No. 124, 127.
58
Indonesia's first written submission, paras. 81-89; Indonesia's opening statement at the first
meeting, paras. 41-47; and Indonesia's responses to Panel Questions No. 50-53 and 55.
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an internal measure or a border measure is a threshold issue as the challenged aspect of the same
measure cannot be a border measure and an internal measure at the same time.59

46. Indonesia recalls that Note Ad Article III draws a clear distinction between internal and
border measures. It provides that "any law, regulation or requirement of the kind referred to in
paragraph 1 which applies to an imported product and to the like domestic product and is collected
or enforced in the case of the imported product at the time or point of importation, is nevertheless
to be regarded as … a law, regulation or requirement of the kind referred to in paragraph 1, and is
accordingly subject to the provisions of Article III" (emphasis added). This distinction was also
clarified by the panel in India – Autos, which stated that what is targeted in Article XI:1 is
exclusively restrictions which relate to the importation itself, and not to already imported
products.60

47. Ad Note to Article III presupposes an equivalent measure that applies to imported and like
domestic products.61 Article 22 and 23 of Minister of Agriculture Decree 306/1994 provide that
frozen and chilled poultry meat is offered for sale in meat shops and supermarkets "equipped with
cooler facilities (refrigerator and/or freezer)".62 Thus, Minister of Agriculture Decree No. 306/1994
is a measure equivalent to the intended use requirement challenged by Brazil that applies to both
imported and like domestic products, namely chilled and frozen products. This brings the intended
use requirement clearly within the scope of Article III:4 of the GATT 1994. It thus, does not fall
under the scope of Article 4.2 of the Agreement on Agriculture or Article XI:1 of the GATT 1994.

IV. BRAZIL FAILS TO PROVE THAT THE CHALLENGED MEASURES ARE

INCONSISTENT WITH INDONESIA'S WTO OBLIGATIONS

A. ALLEGED GENERAL PROHIBITION/OVERARCHING MEASURE

48. Indonesia recalls that Brazil challenged the so-called overarching measure/general
prohibition as a "quantitative import restriction" inconsistent with Article XI:1 of the GATT 1994,
and a "quantitative import restriction" or a "similar border measure" inconsistent with Article 4.2 of
the Agreement on Agriculture.63 As explained in Indonesia's submissions, Brazil failed to prove that
the measure at issue exists in the way it is described by Brazil.64

49. Moreover, even if the Panel were to find otherwise, for the reasons already explained,
Indonesia considers that, in the present dispute, Article 4.2 of the Agreement on Agriculture
applies to the exclusion of Article XI:1 of the GATT 1994. In the context of its claim under Article
4.2, Brazil did not substantiate its assertions that a causal relationship exists between the alleged
measure and the claimed trade distortion (i.e. the measure has a limiting effect), that the measure
at issue constitutes a similar border measure, and that it is not "maintained under … general, non-
agriculture-specific provisions of GATT 1994 or of the other Multilateral Trade Agreements in
Annex 1A to the WTO Agreement". In light of these deficiencies, Brazil failed to prove that the
general prohibition/overarching measure – to the extent that Brazil established its existence (quod
non) – is inconsistent with Article 4.2 of the Agreement on Agriculture.65

50. If, despite Indonesia's arguments, the Panel were nevertheless to address Brazil's claim
under Article XI:1 of the GATT 1994, Brazil failed to prove that this measure is a quantitative

59
See Appellate Body Report, China – Auto Parts, para. 139 (referring to Panel Report, China – Auto
Parts, para. 7.105). See also GATT Panel Reports, EEC – Parts and Components, para. 5.4; Greece – Import
Taxes, para. 5; Canada – Gold Coins, para. 49 and Panel Report, Argentina – Hides and Leather, para. 11.139.
60
The panel also explained that only in the very specific circumstance of state-trading enterprises
involving a monopoly over both importation and distribution of goods, such as in the case of Korea – Various
Measures on Beef, the traditional distinction between measures affecting imported products and measures
affecting importation may be blurred. Panel Report, India – Autos, para. 7.221 and footnote 410 (citing Panel
Report, Korea – Various Measures on Beef, para. 766).
61
See Panel Report, EC – Asbestos, paras. 8.91-8.95 (referring to GATT Panel Report, US – Section 337
of the Tariff Act of 1930); and Panel Report, Argentina – Hides and Leather, paras. 11.150 and 11.154.
62
Article 22(c) and Article 23 of the Minister of Agriculture Decree 306/1994 concerning slaughtering of
poultry and handling of poultry meat and its by-products, Exhibit IDN-83.
63
Indonesia's first written submission, para. 94.
64
Indonesia's first written submission, para. 109; Indonesia's rebuttal submission, paras. 98-109.
65
Indonesia's first written submission, paras. 118-124.
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import restriction inconsistent with this provision. This is because, as explained, Brazil failed to
demonstrate that the general prohibition/overarching measure has a limiting effect.66

51. Thus, due to the highly abstract nature of Brazil's claim on the general
prohibition/overarching measure, Indonesia submits that Brazil failed to make its prima facie case
that this measure was inconsistent with both Article 4.2 of the Agreement on Agriculture and
Article XI:1 of the GATT 1994.67

B. HALAL LABELLING REQUIREMENTS

1. Brazil has not demonstrated that the halal labelling requirements are
inconsistent with Indonesia's obligations under Article III:4 of the GATT 1994

52. Brazil challenged Indonesia's halal "labelling" requirements imposed through, inter alia, Law
No. 33/2014 (Halal Law).68

53. Brazil claimed that Indonesia's halal "labelling" requirements violate Article III:4 of the GATT
1994. First, Brazil argued that Indonesia discriminated against Brazilian producers by granting a
five-year grace period from the halal "labelling" requirement only to domestic products, but not to
imported products. Brazil considered the certification requirements fell under labelling. Indonesia
explained that what Brazil referred to as "labelling" was actually "certification".69

54. Indonesia enacted Law No. 33/2014 (Halal Law) to unify the halal assurance requirements
under one instrument and to create new government bodies to guarantee halal product assurance,
in coordination with the Indonesian Ulama Council (MUI). Article 4 of Law No. 33/2014 (Halal Law)
provides that "products that enter, circulate and [are] traded in the territory of Indonesia must be
certified halal". The Halal Product Assurance Organizing Agency (BPJPH) was the new agency
formed by the Government to certify products as halal.70 Article 67(1) provides that the "obligation
of halal certification that circulate and [are] traded in the territory of Indonesia as intended in
Article 4 comes into effect 5 (five) years from the [enactment] of this Law." Moreover, Article 64
provides that "the formation of the BPJPH .... must be formed no later than three years
commencing from the [enactment] of this Law." Thus, it was expected that it would take three
years to set up the BPJPH and another two years for the BPJPH to establish procedures before
which its Halal Certification procedures would be mandatory.

55. However, the obligation for establishments to obtain halal certification was still required until
the BPJPH was formed. Article 60 provides that "MUI still conducts its task in Halal Certification
until BPJPH is formed." The requirement to obtain halal certification through the MUI, therefore,
applied to both domestic and imported products throughout this grace period. It is only the BPJPH,
as a body, that received the grace period. Indonesia submits that Brazil has not established a
prima facie case that the grace period constitutes discrimination with respect to the halal
certification requirement.71

56. Second, Brazil argued that the implementation of the halal labelling is discriminatory
because Indonesian producers can sell chicken meat and chicken products without the halal label,
whereas foreign products had to have a halal label. Indonesia recalls that for a violation of Article
III:4 to be established, three elements must be satisfied: (i) the imported and domestic products
at issue are "like products"; (ii) the measure at issue is a "law, regulation, or requirement affecting
the products' internal sale, offering for sale, purchase, transportation, distribution, or use", and
(iii) the imported products are accorded "less favourable treatment" than that accorded to like
domestic products.72 Brazil has not satisfied these elements.

66
Indonesia's first written submission, paras. 125-127; Indonesia's opening statement at the first
meeting, paras. 54-58.
67
Indonesia's first written submission, para. 128.
68
Brazil's panel request, p. 6.
69
Indonesia's opening statement at the first meeting, paras. 113-115. Indonesia's opening statement at
the second meeting, para 47.
70
See Articles 1(5) to 1(11) of Law 33/2014 (Halal Law), Exhibit IDN-5.
71
See Indonesia's opening statement at the second meeting, paras. 46 and 47.
72
Appellate Body Report, Korea – Various Measures on Beef, para. 133.
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57. Brazil argued that imported chicken meat and products were like domestic chicken meat and
products.73 Indonesia disagreed. Indonesia recalls that the determination of "likeness" under
Article III:4 of the GATT 1994 is "…fundamentally, a determination about the nature and extent of
a competitive relationship between and among products."74 As the determination of likeness
relates to the competitive relationship between domestic and imported products in the relevant
marketplace,75 a panel should base its analysis on the products that actually compete in the
relevant market. For example, in Indonesia, domestic fresh chicken meat does not compete with
imported fresh chicken meat because it would be virtually impossible for Brazil to import fresh
chicken into Indonesia. Fresh chicken has a storage life of less than one day. A consignment from
Brazil to Indonesia that is transported via marine cargo would take around 30 days, while
transportation by air from São Paolo to Jakarta takes more than 45 hours and would be
prohibitively expensive. Thus, in all likelihood, considering the distance, the transport time and the
prohibitive transportation cost (if by air), Brazil would only import frozen chicken meat and
products into Indonesia.76 In contrast, domestic chicken meat is usually sold fresh in traditional
markets.77

58. Indonesia further explained that although, the end-uses of fresh and frozen products are
similar for the ultimate consumer, the products at issue are not classified under the same
HS-six-digit code and they have different products characteristics that affect heavily consumer
tastes and habits in the Indonesian market.78 Indonesia did not dispute that the halal labelling
requirements are domestic regulations falling under Article III:4.

59. Brazil argued that imported chicken meat and products were accorded "less favourable
treatment" than that accorded to like domestic products. Brazil relied on the text of Article 38 of
Law No. 33/2014 (Halal Law), which provides that "halal labels must be affixed on (a) product's
packaging; (b) specific part of the products, and/or (c) specific place of the product". 79 Indonesia
explained although the Halal Law applies to a wide range of products including cosmetics, chemical
products and consumer goods,80 Government Regulation No. 69/1999 is the more specific
regulation providing that halal labels do not need to be affixed to "food directly sold and packed
before buyers". For example, it is common practice to sell fresh chicken without a halal label
affixed directly on the product, but have the halal certificates for the products and for the
slaughterman displayed at the point of sale in the traditional markets.81 Thus, Indonesia requires
halal compliance (albeit through different methods) for both frozen/chilled chicken sold in
packages and for fresh chicken sold unpackaged. Therefore, there is no "less favourable
treatment" accorded to imported chicken meat and products. In any event, at a late stage of the
proceedings, Brazil stated that it "accepts Indonesia's contention that because Government
Regulation 69/1999 is more specific it should prevail over Law 33/2014".82 This means that
Brazil's original arguments that Article 38 of Law No. 33/2104 requiring halal labels be placed on
specific parts of fresh products prevailed over the exception in Government Regulation 69/1999 on
"food directly sold and packed before buyers in a small number" are no longer valid.83

60. Third, Brazil claimed that previously-frozen (thawed) chicken meat must be allowed to be
sold as fresh chicken, i.e. unpackaged and unlabelled when sold before consumers in small
quantities.84 Indonesia argued that fresh, chilled and frozen chicken are not like products.85
Moreover, there are legitimate grounds for distinguishing between the places where sellers can sell

73
Brazil's first written submission, para. 285.
74
Appellate Body Report, EC – Asbestos, para. 99.
75
Appellate Body Report, EC – Asbestos, para. 103 (emphasis added).
76
Indonesia's first written submission, para. 149 and footnote 188.
77
Indonesia's first written submission, para.159.
78
Indonesia's first written submission, paras. 316-328.
79
See Brazil's response to Panel Question No. 46.
80
See Article 1(1) of Law No. 33/2014 (Halal law).
81
See Indonesia's first written submission, paras. 316-328; Indonesia's response to Panel Question
No. 43. See also Exhibit IDN-118.
82
See Brazil's response to Panel Question No.143.
83
See Indonesia's comment on Brazil's responses to Panel Question No. 143.
84
See Brazil's response to Panel Question No. 144.
85
Indonesia's comments on Brazil's responses to Panel Questions after the second meeting, paras. 62-
66 and 120.
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fresh chicken as compared to chilled/frozen products. These legitimate grounds are also reflected
in the laws and regulations of other countries, notably Brazil itself and the Philippines.86

61. In the light of the foregoing, Indonesia submits that Brazil has not made a prima facie case
that the implementation of halal labelling requirements is inconsistent with Indonesia's obligations
under Article III:4 of the GATT 1994. Brazil has not met its burden of proof and its claim should
therefore be dismissed.

2. If the Panel were to find that the halal labelling requirements are inconsistent
with Article III:4, this measure is justified under Article XX(a) and Article XX(d)
of the GATT 1994

62. If, however, the Panel were to find otherwise, Indonesia submits that the halal labelling
requirements are justified under Article XX(a) and (d) of the GATT 1994. For a measure to be
provisionally justified under Article XX(a) or Article XX(d) of the GATT 1994, a panel must conduct
a two-step analysis. First, a panel must address whether the measure is designed and necessary
"to protect public morals" or "to secure compliance with laws or regulations which are not
inconsistent with the provisions of this Agreement", respectively. Then, a panel must address
whether the application of the measure does not unjustifiably or arbitrarily discriminate among
countries where the same conditions prevail or otherwise lead to a disguised restriction on
international trade (the chapeau).

63. With respect to the provisional justification under Article XX(a), Indonesia notes that the
halal labelling requirements are "designed to protect public morals".87 Indonesia recalls that the
examination of whether a measure is designed to protect public morals is not "particularly
demanding".88 A measure will be designed to protect public morals if it is "not incapable of"
protecting public morals.89 The preamble of Law No. 33/2014 (Halal Law) makes clear that the
halal requirements are designed to protect the religious principles of the majority Muslim
population by guaranteeing that the products they are consuming are halal. The halal
requirements are also "necessary to protect public morals" as they make a meaningful contribution
to ensure that consumers are not misled as to what they are eating. In addition, the halal
requirements are not trade-restrictive as they apply to all packaged products, whether domestic or
imported. Indonesia submits that the relatively slight impact on packaged products is more than
outweighed by the importance of the religious values Indonesia is attempting to protect through its
halal labelling laws and regulations.

64. With respect to the provisional justification under Article XX(d), Indonesia notes that the
halal labelling requirements are "designed to secure compliance with laws and regulations" that
are not inconsistent with the GATT 1994.90 This is demonstrated by many textual linkages between
the halal labelling requirements and the laws and regulations they seek to implement. In addition,
the halal labelling requirements are "necessary to secure compliance with laws and regulations"
that are not inconsistent with the GATT 1994 as they provide information to the consumer about
the product he or she is consuming so that consumers are not misled as to what they are eating.
In addition, they are not trade-restrictive as they apply to all packaged products, whether
domestic or imported. If the Panel were nevertheless to consider these requirements as trade
restrictive, Indonesia submits that the "relatively slight impact on imported products" is more than
outweighed by the importance of the religious values Indonesia is attempting to protect through its
halal labelling laws and regulations.

65. Once a panel has weighed and balanced these different factors, it must then compare the
challenged measure with possible alternative measures that achieve the same level of protection
while being less trade-restrictive. The burden of submitting reasonably available alternatives lies

86
Indonesia's comments on Brazil's response to Panel Question No. 10..
87
See Indonesia's first written submission, paras. 342-356; and Indonesia's opening statement at the
first meeting, paras. 110-132.
88
Indonesia's opening statement at the first meeting, para. 117.
89
See Indonesia's opening statement at the first meeting, paras. 116-119. See also Appellate Body
Report, Colombia – Textiles, para. 5.68.
90
See Indonesia's first written submission, paras.342-356 and Indonesia's opening statement at the
first meeting, paras. 110-132.
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with the complainant, Brazil. Brazil has never provided a less trade restrictive alternative to the
halal labelling requirement.

66. Turning to the chapeau of Article XX, it is well established that this provision is concerned
with the manner in which the measure is applied. In undertaking an analysis under the chapeau, a
panel must examine the design, architecture, and revealing structure of a measure. 91

67. Indonesia submits that the halal labelling requirements are not discriminatory as they apply
to all packaged products, whether domestic or imported. If the Panel nevertheless were to find
that discrimination exists because the halal labelling requirements apply only to packaged foods,
Indonesia submits that there is a rational connection between the policy objective of protecting the
religious beliefs of Indonesian Muslims not to eat non-halal products and informing them as to
whether they are purchasing legitimate halal products. To be clear, the halal labelling
requirements are not applied differently to countries in which the same conditions prevail. They
are applied to all packaged products from all countries (including Indonesia) in a consistent
manner.

68. Finally, under the chapeau of Article XX, a measure must not constitute a disguised
restriction on international trade, e.g., "concealed or unannounced restriction or discrimination in
international trade".92 The halal labelling requirements do not amount to a disguised restriction on
international trade because the measures are transparent. The halal labelling requirements are
published in, inter alia, Law 33/2014 (Halal Law) and Article 97 of the Law 18/2012 (Food Law). 93

69. In sum, Indonesia submits that the halal labelling requirements are not inconsistent with
Article III:4 of the GATT 1994. If the Panel were to consider otherwise, Indonesia submits that this
measure is justified under Article XX(a) and Article XX(d) of the GATT 1994.

C. INTENDED USE REQUIREMENT

1. Brazil has not demonstrated that the intended use requirement is inconsistent
with Indonesia's obligations under Article III:4 of the GATT 1994

70. Brazil claimed that Indonesia's intended use requirement violated Article III:4 of the GATT.
Indonesia recalls that for a violation of Article III:4 to be established, three elements must be
satisfied: (i) the imported and domestic products at issue are "like products"; (ii) the measure at
issue is a "law, regulation, or requirement affecting the products' internal sale, offering for sale,
purchase, transportation, distribution, or use, and (iii) the imported products are accorded "less
favourable treatment" than that accorded to like domestic products. 94 Brazil has not satisfied
these elements.

71. As discussed above, Indonesia explained that fresh, and frozen and chilled chicken are not
"like products".95 In addition, Indonesia noted that the intended use requirement was an internal
measure imposed with respect to imported products at the moment of importation. 96

(a) Previous regime

72. Before the enactment of MoA Regulation No. 34/2016, Indonesia required that frozen and
chilled chicken meat and chicken products to be sold in industries, hotels, restaurants, catering,
or be used for other specific purposes.97 Article 22 and 23 of Minister of Agriculture Decree
306/1994 provide that domestic frozen and chilled poultry meat must be offered for sale in meat
shops and supermarkets "equipped with cooler facilities (refrigerator and/or freezer)". 98 Such
facilities had not been available in traditional markets. This intended use requirement aimed at

91
Appellate Body Report, Japan – Alcoholic Beverages II, p. 29, DSR 1996:I, p. 120.
92
Appellate Body Report, US – Gasoline, p. 25.
93
See Indonesia's opening statement at the first meeting, para. 131.
94
Appellate Body Report, Korea – Various Measures on Beef, para. 133.
95
See also Indonesia's first written submission, paras. 147-164.
96
Indonesia's first written submission, paras. 81-89; Indonesia's opening statement at the first
meeting, paras. 41-47; and Indonesia's responses to Panel Questions No. 50-53 and 55.
97
See Section II.B.3 of Indonesia's rebuttal submission.
98
Article 22(c) and Article 23 of the Minister of Agriculture Decree No. 306/1994, Exhibit IDN-83.
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ensuring that "frozen" or "chilled" chicken meat and products were not sold in markets that did not
have proper cold-chain systems. It is generally recommended that frozen meat should ideally be
thawed inside refrigerated facilities.99 Indonesia must also ensure that previously frozen products
were not thawed and refrozen.100 It is noteworthy that Brazil shares these same food safety
concerns. In fact, Brazil requires thawing to be carried out in a refrigerated facility and prohibits
the refreezing of thawed products.101

73. Brazil argued that the intended use requirement meant that imports "could not reach the
most important distribution channels" while domestic products "had open and free access to the
'wet markets'" "which represent around 70% of the Indonesian consumer market". 102 Indonesia
explained that Articles 22 and 23 of Minister of Agriculture Decree 306/1994 provide that all frozen
and chilled poultry meat must be offered for sale in meat shops and supermarkets "equipped with
cooler facilities (refrigerator and/or freezer)". As a result, neither domestic nor imported frozen
products had "open and free access to the 'wet markets'".

74. Brazil argued that chicken products that had been imported for one intended use e.g. hotels,
could not be redirected to another intended use, e.g. restaurants. 103 There is no basis for this
assertion. Indonesia recalls that Article 31 of MoA Regulation No. 58/2015 provides that "intended
use ... is for hotels, restaurants, caterings, industries, and other particular purposes". Article 38
(e) of the same Regulation provides that there would be sanctions for a breach of the intended use
requirement. These sanctions apply when an importer directs the chicken products to a place other
than those listed in Article 31. They do not apply when an importer redirects the products to
another place listed in Article 31.104

(b) Current regime

75. Under the current regime, MoA Regulation No. 34/2016 terminated the intended use
requirement by providing that frozen and chilled chicken meat can be sold in any market with cold-
chain facilities, including traditional markets with cold chain facilities. This regulation also requires
importers to provide a distribution plan and a distribution report. The distribution plan requires the
importer to indicate an estimate of the products it intends to import and information with respect
to potential buyers that must have cold-chain facilities available. The distribution report requires
importers to submit information with respect to the actual imports and the actual buyers that are
required to have cold-chain facilities available.

76. Brazil argued that Indonesia simply replaced the term "modern markets" used in MoA
Regulation No. 39/2014 with "markets with cold chain facilities" in MoA Regulation No. 34/2016.
Brazil stated that "this seemingly more flexible formulation was, however, made more restrictive
by the requirement [to] submit a "distribution plan" [and] "distribution reports" (every Thursday)
so as to confirm that importers did not evade the previous plan". Indonesia explained that the
term "markets with cold chain facilities" is a broader term, which includes, but is not limited to,
"modern markets". Modern markets are characterized by offering a wide variety of products with a
longer shelf life including pre-packaged and/or processed products, such as minimarkets,
supermarkets, and hypermarkets. In contrast, "market with cold chain facilities" can be any
market, including traditional markets, to the extent they have refrigerators, freezers or any other
cold-chain facility. The difference between these two types of markets is critical. While MoA
Regulation No. 34/2016 allows the sale of frozen/chilled products in traditional markets with cold
chain facilities, the previous MoA Regulation No. 39/2014 did not.

77. Brazil also argued that importers are now tied to the terms of the distribution plan submitted
in the application process and any deviation may subject the importer to harsh sanctions.105
Indonesia explained that importers are not tied to the terms of the distribution plan because they
do not need to match the distribution report. Sanctions only apply when the importer fails to
99
See, inter alia, Exhibit IDN-85.
100
Indonesia's first written submission, para. 134.
101
See Article 1.1 of Brazil's Resolution No. 216/2004 on good practices for food services, Exhibit
IDN-150 and Brazil's Normative Instruction DIVISA/SVS No. 4/2014 on good practices for commercial food
establishments and food services, Exhibit IDN-151.
102
Brazil's first written submission, paras. 278-283 and 289.
103
Brazil's rebuttal submission, para. 55.
104
Indonesia's rebuttal submission, para. 141.
105
Brazil's opening statement at the second meeting, para. 20.
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submit the required documents in the first place.106 In addition, an equivalent requirement is
applied to domestic producers when they apply for their meat distributor license. 107 This license
requires that applicants disclose the delivery, type, area of the products, the report of sales for the
last three months, as well as the meat distributor permit history.108

78. Brazil argued that the distribution report served to confirm that chicken products that had
been imported for one intended use, e.g. hotels, were not redirected to another intended use, e.g.
restaurants, and any deviation would be subject to sanctions.109 Indonesia notes that although
there are enforcement provisions in Article 38 of MoA Regulation No. 34/2016, they apply only if
the importer deviates from the terms listed in the Import Recommendation, i.e. if he sells at a
market without a cold chain facility. Moreover, there is no sanction if the distribution plan does not
match the distribution report. These sanctions only apply when the importer fails to submit the
required documents in the first place.110

79. In light of the above, Indonesia submits that the intended use requirement is not
inconsistent with Article III:4 of the GATT 1994.

2. If the Panel were to find that the intended use requirement is inconsistent with
Article III:4, this measure is justified under Article XX(b) and Article XX(d) of the
GATT 1994

80. Should the Panel nevertheless consider otherwise, Indonesia demonstrated that this
measure was justified under Article XX(b) and Article XX(d) of the GATT 1994.111

81. To recall, for a measure to be provisionally justified under Article XX(b) or Article XX(d) of
the GATT 1994, a panel must determine whether the measure is designed and necessary "to
protect human health" or "to secure compliance with laws or regulations which are not inconsistent
with the provisions of this Agreement", respectively. Following this determination, a panel must
address whether the application of the measure complies with the requirement of the chapeau of
Article XX.

82. With respect to the provisional justification under Article XX(b), Indonesia noted that the
intended use requirement is designed to, and necessary to, protect public health. 112 The intended
use requirement is designed to protect public health, a value of the highest degree of
importance,113 as it prohibits the sale of frozen or chilled chicken in markets without cold-chain
facilities. By doing so, the intended use requirement contributes to ensure that only safe chicken is
sold in Indonesia. Indonesia has submitted several scientific articles114 and regulations
establishing food safety requirements from WTO Members115 on the risks of (i) thawing frozen
chicken meat at open-air temperatures, and (ii) refreezing products that had previously been
frozen and then thawed at open-air temperatures. In addition, the intended use requirement is not
trade-restrictive as it applied in an equivalent manner to both imported and domestic products.

83. With respect to the provisional justification under Article XX(d), Indonesia notes that the
intended use requirement is designed to, and necessary to, secure compliance with laws and
regulations that are not inconsistent with the GATT 1994.116 The intended use requirement is
designed to ensure compliance with consumer protection laws and regulations. This is
demonstrated by the textual linkages between the intended use requirement and the laws and

106
See Indonesia's response to Panel Question No. 88(a).
107
See Requirements to obtain a Meat Distributor License, retrieved from:
http://pelayanan.jakarta.go.id/site/detailperizinan/472, Exhibit IDN-131.
108
Ibid.
109
Brazil's opening statement at second meeting, para. 20.
110
Indonesia's response to Panel Question 88(a).
111
Indonesia's first written submission, paras. 179-216; Indonesia's opening statement at the first
meeting, paras. 62-79.
112
See Indonesia's first written submission, paras.342-356 and Indonesia's opening statement at the
first meeting, paras. 110-132.
113
Appellate Body Report, EC – Asbestos, para. 172.
114
Exhibits IDN-54, IDN-55 and IDN-56.
115
Exhibits IDN-84 and IDN-85.
116
See Indonesia's first written submission, paras.342-356 and Indonesia's opening statement at the
first meeting, paras. 110-132.
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regulations it seeks to implement. Indonesia notes that thawed chicken meat is deceptively
similar to fresh chicken meat. The sanctions imposed in case of violation of the intended use
requirement on sellers of imported products (that is, the revocation of the Import
Recommendation)117 contribute to the prevention of deceptive practices against consumers, as
sellers will be reluctant to thaw frozen products and present them as fresh, in the light of the
possible sanctions they may face. Indonesia submitted that the intended use requirement is not
trade-restrictive as it applied in an equivalent manner to both imported and domestic products.

84. Once a panel has weighed and balanced these different factors, it must then compare the
challenged measure with possible alternative measures that achieve the same level of protection
sought by the concerned Member, while being less trade-restrictive. Brazil provided "alternatives"
that would not have achieved the specific objective and level of protection Indonesia sought with
respect to the (now expired) intended use requirement, namely, to protect the public health of
consumers by preventing frozen products from being thawed at tropical temperatures in open-air
markets and to prevent consumers from being misled into buying thawed products believing they
were fresh products. For example, Brazil's alternative of introducing a mandatory good hygienic
practice (GHP) plan for establishments selling chicken meat is not a valid alternative as the
Minister of Agriculture Decree No. 306/1994 already provides for good hygienic and sanitary
practices. In addition, some of Brazil's alternatives became moot with the introduction of cold-
chain facilities at the traditional markets. Nowadays, a consumer can buy a frozen product in a
traditional market, keep it in a cold storage thermal bag, go home and put it safely in his freezer.

85. Turning to the chapeau of Article XX, it is well established that discrimination under the
chapeau is only possible "among countries where the same conditions prevail". In Indonesian
traditional markets, chicken meat and products are mostly sold fresh and unpackaged. In contrast,
imported products are frozen and packaged. Indonesia submitted that there is a different risk
posed by frozen meat being thawed in open-air spaces compared to fresh meat that has been
slaughtered a few hours before. Even if both products are exposed to tropical open-air conditions,
fresh chicken meat does not have the excessive moisture conducive to bacteria growth as does
frozen chicken. Therefore, there is no discrimination vis-à-vis imported products. Indonesia treats
all frozen products in the same way, regardless of their origin, by preventing their sale in markets
without proper cold-chain facilities.

86. If the Panel were nevertheless to find that discrimination exists, Indonesia submits that
there is a rational connection with the policy objective of protecting public health and ensuring
compliance with food safety and consumer protection regulations. In addition, the intended use
requirement does not constitute a disguised restriction on international trade as it is a transparent
measure published in MoA Regulation No. 34/2016.118

87. In sum, Indonesia submits that the intended use requirement is not inconsistent with Article
III:4 of the GATT 1994. If the Panel were to consider otherwise, Indonesia submits its measure is
justified under Article XX(b) and Article XX(d) of the GATT 1994.

D. POSITIVE LIST REQUIREMENTS

88. Brazil claims that the positive list requirements constitute a "prohibition or restriction"
inconsistent with Article XI:1 of the GATT 1994. Brazil argues that this measure prohibits or
restricts the importation into Indonesia of chicken meat and chicken products not included in the
positive lists.119

89. Under the previous regime, the positive list was introduced in response to an incident in
1999, where Tyson Foods of the United States sent a shipment of chicken cuts that was part halal

117
Article 38(e) of the MoA Regulation No. 58/2015, Exhibit IDN-24.
118
Indonesia's first written submission, paras. 213-216; and Indonesia's opening statement at the first
meeting, paras. 76-79.
119
Brazil's first written submission, paras. 192-194. In addition, Brazil claimed that the positive list
requirements constituted a "quantitative import restriction" or a "border measure similar to quantitative import
restrictions" within the meaning of footnote 1 to Article 4.2 of the Agreement on Agriculture; and that this
measure was also inconsistent with Article 3.2 of the Import Licensing Agreement. Brazil's first written
submission, paras. 219-223, 251. Indonesia addressed the relationship between Article 4.2 of the Agreement
on Agriculture, Article 3.2 of the Import Licensing Agreement and Article XI:1 of the GATT in other parts of this
summary. Therefore, Indonesia addresses only Brazil's claim under Article XI:1.
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and part non-halal. The Tyson incident was not an isolated incident. Rather, there were other
instances that caused unrest among the majority Muslim community in Indonesia (87 per cent of
the population) and led the Indonesian Government to take steps to ensure the integrity and
halalness of all imported products.120

90. Under the current regime, the Ministry of Trade and the Ministry of Agriculture have further
liberalized Indonesia's trade policies with respect to the importation of chicken meat and chicken
products. Under the current regime, neither the MoA nor the MoT Regulations provide for positive
list requirements. Article 7(3) of MoA Regulation No. 34/2016 provides that chicken meat and
chicken products that are not included in the relevant attachments to these Regulations may be
imported in Indonesia as long as they meet the requirements of being safe, healthy, wholesome
and halal (ASUH requirements).

91. With respect to the current regime, Brazil argued that compliance with the ASUH
requirements only provided an "abstract possibility of importation" and that the assessment of
compliance with these requirements was "discretionary". Indonesia noted that the expression
"may still be granted recommendation" is not used to express an "abstract possibility of
importation", but rather the concrete conditions precedent that must be met prior to the granting
of the Import Recommendation, i.e. that the importer: (i) applies for the Import
Recommendation,121 and (ii) complies with the ASUH requirements. Moreover, Indonesia explained
that there are objective criteria for the assessment of compliance with the ASUH requirements. 122
For example, compliance with Indonesia's halal requirements is assessed by customs officials
through the inspection of the Halal Certificate.123

92. Moreover, Brazil's concern that both "listed" and "non-listed" chicken meat and chicken
products have to comply with ASUH requirements, but only "listed" chicken products enjoy
certainty of being granted approval is without merit. The Annexes to MoA Regulation No. 34/2016
and MoT Regulation No. 59/2016 do not serve any purpose at this point in time. Indonesia has
explained that pursuant to Article 2(b) of MoA Regulation No. 34/2016, the ASUH requirements
apply to all imported products. In addition, ASUH as a comprehensive principle has existed since
Animal Law No. 18/2009 was enacted. In addition, halal requirements date back to Law No.
6/1967 (previous Animal Law).124 Safety requirements have applied ever since importation first
took place. These safety and halal requirements continue to apply in accordance with, inter alia,
MoA Regulation No. 34/2016.125

93. To sum up, if an importer applies for an Import Recommendation and the imported products
comply with the ASUH requirements (regardless of whether they are listed or not listed in the
annexes to MoA Regulation No. 34/2016), the Import Recommendation will be granted.

94. If the Panel were nevertheless to find that the positive list requirements are inconsistent
with Article XI:1 of the GATT 1994, Indonesia justified this measure under Article XX(d) of the
GATT 1994.126

95. In its submissions, Indonesia identified specific laws with which the measure was designed
to secure compliance. Furthermore, Indonesia showed that the positive list requirements were
"designed to secure compliance with the relevant laws and regulations" by pointing to the textual
linkages between the positive list requirements and the laws and regulations it seeks to secure
compliance with. In addition, Indonesia submitted that the positive list requirements were
"necessary to secure compliance with the relevant laws and regulations" as they prevented the
circumvention of Indonesia's halal requirements.127 Indonesia also considers that the importance
of its objective and the existence of the contribution of the measure to the objective outweighed
the relatively insignificant trade-restrictiveness of the measure. Nothing prevented Brazilian

120
Opening statement of Indonesia at the first meeting, para. 89. See Letter by Indonesia's Minster of
Agriculture, Exhibit IDN-82; Letter by the US Secretary of Agriculture, Exhibit IDN-81.
121
See Article 4(3) of MoA Regulation No. 34/2016.
122
See Indonesia's response to Panel Question No. 77(a).
123
Exhibit IDN-92(c).
124
See Law of the Republic of Indonesia No. 6/1967 Concerning Basic Provisions on the Husbandry and
Animal Health (previous Animal Law), Exhibit IDN-129.
125
See Indonesia's response to Panel Question No. 77(a).
126
Indonesia's first written submission, paras. 230-231.
127
Indonesia's first written submission, para. 232.
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exporters from exporting to Indonesia whole carcasses of chicken, provided that Indonesia's halal
requirements were fulfilled. Thus, in Indonesia's view, the measure is not highly trade restrictive.

96. Indonesia further submitted that the positive list requirements were justified under the
chapeau of Article XX. The chapeau of Article XX requires the measure not to 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". 128
Indonesia applied the positive list requirements in a non-discriminatory manner to chicken meat
and chicken products imported from all Members.129 However, even if the Panel were to find that
the positive list requirements accorded discriminatory treatment to imported chicken from Brazil,
Indonesia submits that the discriminatory application of the measure is not unjustifiable or
arbitrary. On the contrary, it is justifiable when considered in the light of the objective of the
measure to secure compliance with Indonesia's halal requirements.130 Put differently, the
discrimination, to the extent that it existed, was necessary to achieve the measure's objective.
Furthermore, again, the fact that there are important differences between the conditions that
prevail in Indonesia and Brazil, namely that Indonesia is the country with the world's largest
Muslim population, resolves any doubts as to whether the discriminatory treatment was arbitrary
or unjustifiable. It was not.

97. Finally, Indonesia submits that the question of whether the measure was a disguised
restriction on international trade cannot be addressed in isolation from the analysis of the other
elements of the chapeau.131 The fact that the measure meets the requirements of the first two
elements confirms that it is not a disguised restriction. In any event, the positive list requirements
are a transparent regulation published in MoA Regulation No. 39/2014 and MoT Regulation No.
46/2013.

E. IMPORT LICENSING REGIME

1. Most of Brazil's claims with respect to Indonesia's import licensing regime are
repetitive, not supported by adequate evidence and arguments, or outside the
Panel's terms of reference

98. Brazil challenges almost identical elements of Indonesia's import licensing regime under
Article XI:1 of the GATT 1994, Article 4.2 of the Agreement on Agriculture, and Article 3.2 of the
Licensing Agreement. In particular, Brazil claims that the following elements of the import
licensing regime "constitute restrictions on the importation of chicken meat and chicken products"
that are inconsistent with both Article 4.2 of the Agreement on Agriculture and Article XI:1 of the
GATT 1994: (i) the positive list requirements; (ii) the intended use requirement; (iii) the limited
application and validity periods; and (iv) the fixed license terms. The first two elements were also
challenged as individual measures. With respect to these elements, Brazil simply incorporated by
reference its arguments made in the context of its other claims.132

99. In addition, in the course of these proceedings, Brazil raised a number of additional claims
that were either unsubstantiated, or outside the Panel's terms of references. For example, Brazil
claimed in the alternative, without providing adequate evidence and arguments, that the elements
of Indonesia's import licensing regime at issue constitute "similar border measures other than
ordinary customs duties" within the meaning of footnote 1 to Article 4.2 of the Agreement on
Agriculture. Brazil did not make its prima facie case with respect to these claims.133

100. Along the same lines, Brazil challenged the first, second and third elements of Indonesia's
import licensing regime as inconsistent with Article 3.2 of the Licensing Agreement. However,
Brazil did not explain adequately why these measures constitute "non-automatic" "import licensing
procedures" within the meaning of Articles 1.1 and 3.1 of the Licensing Agreement, which is a
threshold issue that must be addressed before analysing the consistency of a measure with Article

128
Indonesia's first written submission, paras. 209-212.
129
Indonesia's first written submission, para. 233.
130
See Indonesia's first written submission, para. 210.
131
Appellate Body Report, US – Gasoline, p. 25.
132
See Indonesia's first written submission, paras. 235-247; Indonesia's rebuttal submission, paras.
120-123 (citing Brazil's first written submission, paras. 200-201, 212, 228-231).
133
Indonesia's rebuttal submission, para. 123.
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3.2. Furthermore, Brazil did not provide any arguments or evidence proving that the relevant
aspects of Indonesia's import licensing regime are inconsistent Article 3.2, in particular they are
"more administratively burdensome than absolutely necessary". Brazil's interpretation of Article
3.2 is based on an erroneous premise that, according to this provision, "a non-automatic
procedure must be related to the implementation of a permissible 'trade restrictive measure', that
is, a measure consistent with the relevant provisions of the WTO Agreement". 134 Brazil introduces
this requirement into the legal tests under the first and second sentences of Article 3.2, and
alleges that the challenged measures failed to satisfy this requirement.135 However, Brazil did not
explain from where it derived this additional requirement. Indeed, Indonesia demonstrated that
Brazil's interpretation lacks any support in the text of Article 3.2, its context (in particular Article
1.1), negotiating history, and makes little sense from both a legal and a practical perspective. As
stated clearly in Article 1.1, the Licensing Agreement disciplines administrative procedures, that is,
import licensing, and is not concerned with a broader question of the WTO-consistency of the
underlying measures those procedures seek to implement.136

101. Furthermore, as explained, in Question No. 128, the Panel asked Brazil to clarify whether
Brazil is also challenging the fixed licence terms under Article 3.2 of the Licensing Agreement and,
"[i]f so, … where this claim was developed in Brazil's submissions". In its response, Brazil could
not point to any passages in its first written submission, as well as other submissions, where it
provided adequate legal arguments and evidence to develop this claim. Indonesia trusts that the
Panel will find that Brazil failed to make its prima facie case with respect to the alleged
inconsistency of the aforementioned measures with Article 3.2 of the Licensing Agreement. 137

102. In its response to Panel Question No. 15.b, Brazil stated generally that "[t]o the … extent
that MoT Regulation 87/2015 and MoT 05/2016 introduce additional requirements and procedures
to obtain an import license whenever a product is considered a 'certain product', in the first case,
or is a processed product coming from a country having a risk of spread of zoonosis, in the
second, Brazil submits that these additional restrictions are also at issue in the present dispute".
Brazil, however, failed to explain which specific measures it is challenging, under which specific
provisions of the WTO covered agreements, and on what legal basis.138

103. A number of Brazil's claims with respect to Indonesia's import licensing regime are not
properly identified in Brazil's panel request and are, therefore, outside the Panel's terms of
reference. In addition to Brazil's challenge to the regime "as a whole" already rejected by the
Panel in its preliminary ruling, Brazil also challenged: (i) a letter of recommendation from
provincial livestock services office; (ii) supervision on the compliance of veterinary public health
requirements; and (iii) the alleged discretionary powers in determining "the amount in
Recommendation per Business Player" under Article 27 of MoA Regulation No. 58/2015. Brazil
claimed, inter alia, that these measures constitute "discretionary import licensing" within the
meaning of footnote 1 to Article 4.2 of the Agreement on Agriculture.139

104. However, even if the Panel were to find that it has jurisdiction over these claims, Indonesia
demonstrated that Brazil's claims are without merit. The first two requirements do not constitute
"licensing", and the second requirement does not even address the issue of importation. These
measures cannot, therefore, be characterised as "import licensing". Furthermore, Brazil failed to
demonstrate that the alleged licensing elements bestow any discretion on Indonesia's authorities,
as these measures are set out clearly in Indonesia's legislation and are based on transparent
criteria.140

105. Indonesia addresses below Brazil's claims that the limited application and validity periods
and the fixed license terms are "quantitative import restrictions" within the meaning of Article 4.2

134
See Brazil's rebuttal submission, para. 117.
135
Brazil's rebuttal submission, paras. 128 and 129.
136
See Brazil's claim under Article 3.2 discussed in Indonesia's first written submission, paras. 76-80,
279-290; Indonesia's responses to Panel Questions No. 48, 57, 58, 59, 60; Indonesia's rebuttal submission,
paras. 114-117; Indonesia's opening statement at the second meeting, paras. 22-36; Indonesia's comments
on Brazil's responses to Panel Questions No. 124, 127.
137
Indonesia's comment on Brazil's response to Panel Question No. 128.
138
Indonesia's rebuttal submission, paras. 77-79, 118.
139
Indonesia's responses to Panel Questions No. 105.
140
See, inter alia, Indonesia's first written submission, paras. 267-275; Indonesia's responses to Panel
Questions No. 12, 18 and 105; Indonesia's comment on Brazil's response to Panel Question No. 108.
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of the Agreement on Agriculture and Article XI:1 of the GATT 1994. The other claims with respect
to Indonesia's import licensing regime are repetitive, not supported by adequate evidence and
arguments, or outside the Panel's terms of reference.

2. Brazil has not demonstrated that the limited application and validity periods and
the fixed license terms are inconsistent with Indonesia's obligations under Article
4.2 of the Agreement on Agriculture

106. As explained, Indonesia considers that, in the present dispute, Article 4.2 of the Agreement
on Agriculture applies to the exclusion of Article XI:1 of the GATT 1994. In the context of its claim
under Article 4.2, Brazil did not substantiate its assertion that the limited application and validity
periods and the fixed license terms constitute a quantitative import restriction as these measures:
"(a) unduly restrict market access for Brazilian products; (b) create uncertainty as to an
applicant's ability to import…; and (c) impose a significant burden on importers that is unrelated to
their normal importing activity". Brazil further argued that these measures create what Brazil calls
a "dead zone", i.e. a period during which products cannot be imported into Indonesia. In its
submissions, Indonesia has, however, demonstrated that, under both previous and current
regimes, its import licensing procedures are fast and simple. Indeed, despite these measures, an
importer could import the products at issue to Indonesia without interruption on terms it
determined itself in its application for the Import Recommendation. For example, under the
current regime, producers and importers can make their application for an Import
Recommendation and an Import Approval at any time of the year to import within a six-month
validity period. The flexibility is that an importer can apply for an infinite number of Import
Recommendations and Import Approvals, at whichever point in time he wishes throughout the
year. Brazil has not rebutted these arguments, or provided adequate evidence that Indonesia's
import licensing regime indeed creates a "dead zone". To the extent that the alleged "dead zone"
results from the way how Brazilian exporters operate, as Brazil's own evidence suggests, this dead
zone cannot be attributed to any action or omission of Indonesia. 141

107. Moreover, Brazil did not provide any arguments or evidence showing that the above
measures are not "maintained under … general, non-agriculture-specific provisions of GATT 1994"
within the meaning of footnote 1 of the Agreement on Agriculture. 142

108. In light of the foregoing, Brazil failed to prove that the limited application and validity
periods and the fixed license terms are one of the measures listed in footnote 1 of the Agreement
on Agriculture, and are not "maintained under … general, non-agriculture-specific provisions of
GATT 1994". Brazil thus failed to make its prima facie case that these measures are inconsistent
with Article 4.2 of the Agreement on Agriculture.143

3. Brazil has not demonstrated that the limited application and validity periods and
the fixed license terms are inconsistent with Indonesia's obligations under Article
XI:1 of the GATT 1994

109. Should the Panel find that Article XI:1 of the GATT 1994 applies to the limited application
and validity periods and the fixed license terms (quod non), as explained, these measures, under
both previous and current regimes, do not have a limiting effect on imports. Brazil, therefore,
failed to make its prima facie case of inconsistency with Article XI:1 of the
GATT 1994.144

110. Nevertheless, even if the Panel were to find otherwise, these measures are justified under
Article XX(d) of the GATT 1994.145

141
See, inter alia, Indonesia's first written submission, paras. 250-259, 261-265 (citing Brazil's first
written submission, paras. 202, 212, 228-231); Indonesia's rebuttal submission, paras. 9-22; Indonesia's
comment on Brazil's response to Panel Question No. 103.
142
Indonesia's first written submission, para. 277.
143
Indonesia's first written submission, para. 278.
144
See Indonesia's rebuttal submission, paras. 9-22, 126-127. See also Indonesia's first written
submission, paras. 292-294.
145
Indonesia's rebuttal submission, para. 128.
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4. If the Panel were to find that the limited application and validity periods and the
fixed license terms are inconsistent with Article XI:1, these measures are
justified under Article XX(d) of the GATT 1994

111. As explained, Article XX(d) of the GATT 1994 allows Members to apply measures that are
"necessary to secure compliance with laws or regulations which are not inconsistent with the
provisions of this Agreement, including those relating to customs enforcement, … and the
prevention of deceptive practices". Indonesia demonstrated that the limited application and
validity periods and the fixed license terms are justified under Article XX(d), as these measures
were designed to secure compliance with Indonesia's laws and regulations addressing halal
requirements, public health, as well as deceptive practices (consumer protection) and customs
enforcement relating to the halal requirements and food safety.146

112. In particular, Indonesia identified certain laws with which the measures at issue ensure
compliance, such as Law No. 18/2009 (Animal Law) as amended by Law No. 41/2014; Law No.
33/2014 (Halal Law); and Law No. 8/1999 (Consumer Protection Law). In this respect, Indonesia
referred the Panel to the relevant provisions of these laws on food safety, halal requirements, and
consumer deceptive practices. Furthermore, these laws are "not inconsistent with the provisions of
[the GATT 1994]". It is a general principle that a Member's law is recognized to be WTO-consistent
until proven otherwise. Brazil has not provided this proof.147

113. Indonesia further explained how the application and validity periods and the fixed license
terms contribute to securing compliance with these laws. At the outset, Indonesia noted that even
though these measures are challenged as individual measures, they are the interrelated elements
of Indonesia's import licensing regime for chicken. These measures are integral parts of
Indonesia's comprehensive package of measures that aim at fulfilling the same objective. Although
these measures operating together contribute to Indonesia's objective, it is difficult to segregate
the individual contributions they make to Indonesia's objective.148

114. With respect to the issue of contribution, Indonesia explained that it is a developing
archipelagic country with vast territory, which imposes additional constraints on its ability to
conduct expedient customs clearance operations, in particular for products that pose halal and
safety risks, such as animal products. The application and validity periods and the fixed license
terms seek compliance with Indonesia's relevant laws by facilitating the supervision by Indonesia's
customs and quarantine officials over the importers' compliance with these laws at the time of
importation. In other words, the facilitation of supervision is the immediate objective of these
measures through which Indonesia seeks to achieve its ultimate objective of ensuring that animal
products are safe, healthy, wholesome and halal; and that consumers are not deceived about
these issues. For example, absent the limited validity period, one would not be able to estimate
how many products of which particular type will be imported through which particular ports.
Conversely, if Indonesia were to impose the validity period requirement without applying the fixed
license terms requirement, it would have received information on the period of importation.
However, it would not know, at least approximately, what quantity of which particular products
would be imported and through which particular ports. In addition, importers submit arrival plans
for imports on a monthly basis, which provide further information as to the quantity and the timing
of the imports that will arrive at the specified ports. Thus, without these requirements, Indonesia
would not be able to allocate a sufficient number of quarantine and customs officials to a particular
port of entry to supervise an importer's compliance with halal and food safety requirements, as
well as consumer protection. These measures, therefore, contribute to Indonesia's objective.149

115. In light of the foregoing, Indonesia considers that it has satisfied its burden of proof under
Article XX(d) of the GATT 1994.150

146
See, inter alia, Indonesia's first written submission, paras. 295-300; Indonesia's opening statement
at the first meeting, paras. 97-109; Indonesia's responses to Panel Questions No. 24, 27, 113-119, 121-122;
Indonesia's comments on Brazil's responses to Panel Questions No. 120-123.
147
See, inter alia, Indonesia's first written submission, paras. 297-298 (citing Appellate Body Report, US
– Carbon Steel, para. 157); Indonesia's response to Panel Question No. 113.
148
Indonesia's response to Panel Question No. 113.
149
See, inter alia, Indonesia's responses to Panel Questions No. 113, 115, 119.
150
Indonesia's response to Panel Question No. 113.
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116. Indonesia notes that Brazil did not propose any concrete alternative measures that are less-
trade restrictive and make an equivalent contribution to Indonesia's objective. Brazil's so-called
"alternatives" are vague and imprecise, and do not address the issue of supervision by Indonesia's
customs and quarantine officials over the importer's compliance with Indonesia's relevant laws at
the time of importation. Moreover, Indonesia already applies these measures. Brazil, therefore,
failed to rebut Indonesia's defence under Article XX(d).151

117. Finally, Indonesia demonstrated that the limited application and validity periods and the
fixed license terms are justified under the chapeau of Article XX. Indonesia applies these measures
in a non-discriminatory manner to chicken meat and chicken products imported from all Members.
In addition, there is no discrimination between imported and domestic like products, as Indonesian
producers of the products at issue must comply with Indonesia's safety and halal requirements.
Furthermore, even if these measures were found to accord discriminatory treatment to imports,
Indonesia submits that this treatment is not unjustifiable or arbitrary. On the contrary, it is
justifiable when considered in the light of the importance of Indonesia's objective to secure
compliance with Indonesia's laws that address halal and public health, as well as the conditions
that prevail in Indonesia. Finally, the fact that the measures at issue are not applied in a manner
that constitutes a means of arbitrary or unjustifiable discrimination confirms that they are not a
disguised restriction, as all elements of the test under the chapeau "may … be read side-by-side
[and] … impart meaning to one another". In any event, these measures are published, and are,
therefore, not "disguised".152

118. In light of the foregoing, even if the Panel were to find that the limited application and
validity periods and the fixed license terms fall under Article XI:1 of the GATT 1994 (which they do
not), these measures are, nevertheless, justified under both sub-paragraph (d) and the chapeau of
Article XX of the GATT 1994.153

F. ALLEGED DELAYS IN APPROVING BRAZIL'S VETERINARY CERTIFICATE

119. Brazil claims that "Indonesia has consistently failed to undertake and complete the
procedures to check and ensure the fulfillment of sanitary requirements necessary to authorize
Brazilian exports of chicken meat and chicken products" thereby violating the requirements of
Article 8 and Annex C(1)(a) of the Agreement on the Application of Sanitary and Phytosanitary
Measures (SPS Agreement).154 Brazil states it "has submitted in 2009 to Indonesia's authorities a
proposal of an International [Veterinary] Certificate, which followed every single guideline from the
World Organization for Animal Health".155

120. Indonesia submits that Brazil has not obtained the "International Veterinary Certificate"
because it has not submitted all the appropriate documentation. A letter from the Ministry of
Agriculture, Directorate-General of Livestock and Animal Health Services dated 22 January 2013
indicates that the Director-General acknowledged the questionnaire of MFG-MARFRIG
FRIGORIFICOS BRASIL S/A and COOPERATIVE CENTRAL AURORA ALIMENTOS, two Brazilian
companies wishing to export beef, chicken meat and products to Indonesia. 156 The Indonesian
government then informed Brazil that the application documents presented by the two Brazilian
companies were at the stage of desk review. However, the submitted questionnaire only covered
the food safety assurance system, and did not include information on halal practices in the
exporting poultry slaughter house.157 Therefore any delays experienced by Brazil are because they
have not submitted the proper documentation, and should not be attributed to the Government of
Indonesia.

151
Indonesia's responses to Panel Questions No. 121, 122; Indonesia's comments on Brazil's responses
to Panel Questions No. 121, 123.
152
Indonesia's opening statement at the first meeting, paras. 107-109 (citing, inter alia, Appellate Body
Report, US – Gasoline, p. 25).
153
Indonesia's first written submission, para. 302.
154
See Brazil's opening statement at the first meeting, para. 96. See also ibid., paras. 96-105; and
Brazil's first written submission, paras. 294-315. Indonesia provided its interpretation of Article 8 and Annex
C(1)(a) in, inter alia, its response to Panel Question No. 65.
155
Brazil's opening statement at the first meeting, para. 97. See also Brazil's first written submission,
para. 35.
156
Letter from the Ministry of Agriculture to the Embassy of Brazil in Jakarta, 22 January 2013. Exhibit
IDN-40.
157
Ibid.
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121. Indonesia does not dispute that negotiation of a Veterinary Certificate, which certifies that
the country of origin is free of diseases or that exporters comply with safety requirements, may
fall within the scope of Article 8 and Annex C of the SPS Agreement. 158 In Indonesia's view, the
real question is whether Brazil has established that there was indeed a "delay" in the approval of
the veterinary certificate for chicken meat and chicken products within the meaning of Article 8
and Annex C, and the delay, if were found to exist (quod non), is "undue". Indonesia understands
the phrase "undue delay" as indicating that a delay in the approval procedure (i.e. "time lost by
inaction" or "something [that] is late or postponed")159 can only result from a properly submitted
application, which was not submitted in the case at hand. Furthermore, even if one were to
interpret the term "delay" broadly as encompassing delays that were caused by applicants
themselves (for example, applicants that failed to attach all required documents to their
application), Indonesia submits that delays "attributable to action, or inaction, of an applicant"
cannot properly be considered as "undue" (i.e. "[u]nwarranted or inappropriate"), as was
confirmed by the panel in EC – Approval and Marketing of Biotech Products.160 Such delays are,
therefore, not inconsistent with Article 8 and Annex C of the SPS Agreement.

122. Indonesia submits that Brazil's claim is based on its erroneous interpretation of Article 8 and
Annex C(1)(a) of the SPS Agreement, its total misunderstanding of Indonesia's import licensing
regime, and the misleading presentation of facts underlying this claim. First, Brazil's argument
that, under the SPS Agreement, sanitary procedures must be isolated from other procedures is
legally incorrect. Indonesia submits that the determination of whether the delay in question is
"undue" is not dependent upon the nature of the document that the applicant failed to submit as
long as the document/requirement relates to the approval procedure. The Appellate Body and
previous panels have confirmed that a wide range of measures, including those that are not
themselves sanitary procedures, may fall within the scope of Article 8 and Annex C.161

123. The Appellate Body's statement that measures other than the sanitary procedures may
infringe the requirements of Article 8 and Annex C must necessarily mean that the failure of an
applicant to comply with additional legitimate requirements (e.g. to pay fees, or, in casu, to fill out
the halal questionnaire) is relevant for the assessment of whether the alleged "undue delay"
exists. For example, in the event of an applicant's failure to comply with these requirements, the
delay cannot be attributed to governmental authorities conducting the approval procedure. Brazil
has itself acknowledged that the term "procedures" in Article 8 and Annex C "is defined in the SPS
Agreement in a manner as broad as possible".162

124. In addition, Brazil's argument has far-reaching practical implications. There may be
legitimate reasons why a Member may wish to conduct a holistic assessment of the compliance by
a particular establishment with sanitary requirements as well as other requirements. In its
response to Panel Question No. 29, Indonesia explained that it would be inefficient to start the
Document Desk Review process of the food safety assurance system of the business unit in Brazil
and proceed to the field on-site inspection for food safety, if it is not known whether the business
unit has a halal assurance system. To make separate trips to assess food safety and halal
requirements separately would entail unnecessary costs for Indonesia, which is a developing
country. This is why Indonesia treats the assessment of the food safety and halal requirements on
a holistic basis.

125. Furthermore, in its responses to Panel Questions No. 30, 32 and 37, Indonesia provided a
detailed description of a four-step process for obtaining the approval of country of origin and
business units. This process starts with the Desk Document Review, during which Indonesian
authorities assess certain documents provided by Brazil and its business units, including: the
questionnaire covering food safety and assurance system,163 the halal questionnaire,164 and the

158
Indonesia's response to Panel Question No. 65.
159
See Panel Report, EC – Approval and Marketing of Biotech Products, para. 7.1495. See definition of
"delay" in Oxford Dictionaries, Exhibit IDN-106.
160
See Panel Report, EC – Approval and Marketing of Biotech Products, para. 7.1497.
161
Appellate Body Report, Australia – Apples, para. 438. The broad scope of Article 8 and Annex C was
also confirmed in Panel Report, US – Poultry (China), para. 7.363; and Panel Report, US – Animals, paras.
7.67-7.68.
162
Brazil's first written submission, para. 299, emphasis added.
163
See Questionnaire for Country of Origin on Food Safety, Exhibit IDN-101.
164
See Questionnaire for Business Unit on Food Safety and Halal Assurance System, Exhibit IDN-102.
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halal certificate approved by MUI or an Islamic body in Brazil recognized by the MUI. 165 Based on
the results of the Desk Document Review, a field inspection will be undertaken to the proposed
establishment (i.e. On-site Field Inspection in Country of Origin). At the following stage of Risk
Analysis in Jakarta, Indonesia then analyses the reports to determine whether to approve or reject
the application. The four-step process culminates with the conclusion of a bilateral agreement
between the country of origin and Indonesia (Protocol)166 which specifies the body in the country
of origin responsible for the issuance of Veterinary Certificates at the regional or local level,
certifying that meat exports will meet all veterinary and specific requirements determined by
Indonesia. A model certificate is attached to the completed and signed Protocol between the
country of origin and Indonesia.167

126. Indonesia trusts that it has become clear that Brazil's proposal of an International Health
Certificate was very premature and failed to meet the requirements under Indonesia's import
licensing regime. A Veterinary Certificate can only be agreed upon at the very end of the four-step
country of origin and business unit approval process, during the negotiations on the Protocol. It is
in the Protocol that the approval of the permanent official veterinaries by a body in the country of
origin can be established. However, Brazil has not reached this final stage of the approval
process. In fact, Brazil's application is incomplete, and did not even trigger the Desk Document
Review (i.e. the first step). The only document that Brazil has so far provided is the questionnaire
covering food safety and assurance system. There are other documents that are still to be
submitted, including those establishing compliance with Indonesia's halal requirements. In its
response to Question 4, Indonesia made clear that "[t]he delay of the approval for Brazil and its
business units of slaughterhouse was due to failure in the application to comply with the existing
procedures and technical regulations, stipulated by the Indonesian law", and "[t]he process of
desk review was discontinued because the Brazilian applications [were] not equipped with halal
questionnaire".168

127. In the light of the above, Indonesia submits that Brazil's claim must be rejected in its
entirety, as Brazil did not prove that there is any "delay" in the country of origin and business unit
approval process, attributable to Indonesia within the meaning of Article 8 and Annex C(1)(a) of
the SPS Agreement. Alternatively, should the Panel find otherwise, Brazil failed to prove that the
delay is "undue".169

G. TRANSPORTATION REQUIREMENTS

128. Brazil alleges that Indonesia imposes restrictions on the transportation of imported products
by requiring that the transportation of carcass, meat and/or processed products shall be
"conducted directly from the country of origin to the port of discharge within the territory of [the
Republic of] Indonesia".170 It claims that the measure "clearly operates as a 'quantitative import
restriction' within the meaning of Article 4.2 [of the Agreement on Agriculture] and Article XI:1 of
the GATT 1994, and alleges that the measure restricts the volume of imports.171

129. Indonesia submits that Brazil incorrectly understands the legal requirements related to the
transportation of carcass, meat and/or processed products to Indonesia.

165
See Form 2 to Questionnaire for Business Unit on Food Safety and Halal Assurance System, Exhibit
IDN-102. See also Indonesia's response to Panel Question No. 30(a).
166
See Sample Protocol between the Directorate General of Livestock and Animal Health Services of the
Ministry of Agriculture of the Republic of Indonesia and the Directorate General of XXX Concerning
Establishment, Approval, and Inspection for Export of Meat, Meat Products and Milk Products from XXX to
Indonesia, Exhibit IDN-115.
167
See Sample Health Certificate for Export of Beef from XXX to the Republic of Indonesia, Exhibit IDN-
114.
168
Indonesia's responses to Brazil's information request under Article 5.8 of the SPS Agreement, Exhibit
BRA-20, emphasis added.
169
These issues are discussed in Indonesia's rebuttal submission, paras. 159-174; Indonesia's response
to Panel Question No. 65.
170
Brazil's first written submission, para. 239, citing Article 20(a) of MoA Regulation 58/2015, Exhibit
IDN-24.
171
Brazil's first written submission, paras. 214-217 and paras. 239-243.
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130. Indonesia acknowledges that Article 20(a) of MoA 58/2015 refers to a direct transportation
requirement from the country of origin to Indonesia.172 However, this provision must be read in
the context of the other provisions in the same Article, which provide for the application of animal
quarantine measures. Article 20(b) requires that animal quarantine measures must be carried out
at the country of origin, before the products are loaded on the conveyance. Article 20(c) of the
same regulation provides that the "transit during importation shall be carried out pursuant to the
animal quarantine laws and regulations". Thus, this provision acknowledges that transit during
importation can take place as long as animal quarantine laws are respected. Article 20(e) requires
that upon arrival at the port of discharge, further animal quarantine measures shall be performed
or applied to the carcass, meat and/or processed products.

131. Animal quarantine requirements are regulated under Law 16/1992 on Animal, Fish and Plant
Quarantine.173 Recital (c) of the Considerations notes that "most of the pests and diseases of
animals, fish and plants that are particularly injurious to [Indonesia's] biotic natural resources are
not yet found in the Indonesian archipelago whereas a number of those that are already present
are confined to certain islands".174 Thus, Indonesia has concerns about pests and other organisms
invading its territory, as do other countries that do not share contiguous borders. Article 5 of Law
16/1992 and Government Regulation 82/2000 on Animal Quarantine provides for animal
quarantine requirements. Article 2 provides that all carrier media (or animal or non-animal
products) must be equipped with health certificates issued by the authorized officials in the
country of origin and the transit country. The definitions section provides that "transit is a
temporary stop of [the means of transportation] in a harbour during a journey that brings in
animals, material derived from animals, animal products and other things before arriving in the
designated harbour." Part Three of Government Regulation 82/2000 is entitled "Transit" and
provides, inter alia, in Article 34 that "in order to prevent quarantine animal pests entering
[Indonesia] from a foreign country, transit shall only be approved at a designated place" and in
Article 35 that the designated places for transit must have appropriate facilities.

132. Indonesia explained that imported products do not have to make the journey on a non-stop
basis but on a direct basis.175 It further explained that a breach of the "direct" transportation
requirement would only occur if the vessel transporting the goods in question broke journey en
route to Indonesia and the goods were imported and then re-exported from the transit country.176

133. In the light of the foregoing, it is factually incorrect for Brazil to argue that transit is not
permitted during the transportation of chicken meat and chicken products from Brazil to Indonesia.
As can be noted from the various laws and regulations discussed above, transit is permitted as
long as it complies with Indonesia's animal quarantine regulations. Indeed, Format-1 for the
Import Recommendation attached to MoA Regulation No. 58/2015 contains the following fields to
be completed for importation: (a) tariff position, type/products category, country of origin and port
of discharge; (b) name of business unit and establishment number; (c) transit, (d) intended use
and (e) term of validity.177

134. The European Union has noted that the existence of a prohibition to pass through third
parties is factually disputed between Brazil and Indonesia.178 Indonesia has submitted exhibits
demonstrating that transit during importation has, in fact, occurred. Indonesia submitted an
Import Declaration indicating that frozen, boneless beef was transited through Singapore before
arriving at Tanjung Priok in Indonesia to demonstrate that transit was allowed by Indonesian

172
In this context, the term "direct" may be used in the same manner as it is used in the airline
industry. A direct flight is one that may make stops and pick up additional passengers but the original
passengers do not leave the plane. A "non-stop" flight does not make any stops at all. See:
http://www.programmerinterview.com/index.php/assortment/whats-the-difference-between-a-nonstop-and-
direct-flight/
173
Law No. 16/1992 on Animal, Fish and Plants Quarantine, Exhibit IDN–72.
174
Recital (c) of Law No. 16/1992 on Animal, Fish and Plant Quarantine, Exhibit IDN–72.
175
Indonesia's first written submission, para. 310.
176
Indonesia's response to Panel question No. 39 after the first meeting.
177
MoA Regulation No. 58/2015, "Import Recommendation by Directorate General of Livestock and
Animal Health", p. 27, Exhibit IDN-24.
178
European Union's third party submission, para. 52.
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authorities.179 Indonesia also submitted a bill of lading and Import Declaration for another
shipment that stopped in transit in a third country, namely Singapore, in September 2015. 180

135. In response to Indonesia's clarification of the so-called direct transportation requirement,

Brazil merely stated "...if this is indeed the case, it is far from clear on the basis of Indonesia's
trade regulations. It is actually a challenge to understand the notion of legal certainty argued by
the Indonesian Government".181 In Indonesia's view, this does not constitute a proper rebuttal.

136. Brazil admits that it is unclear how transportation requirements operate in practice. 182 In US
– Carbon Steel, the Appellate Body stated that "a party asserting that another party's municipal
law, as such, is inconsistent with relevant treaty obligations bears the burden of introducing
evidence as to the scope and meaning of such law to substantiate that assertion". 183 Brazil has not
met this burden as it has not introduced any such evidence. Indonesia has explained the legal and
administrative requirements for transportation of imports to Indonesia. The Appellate Body has
endorsed the principle that a Member is normally well-placed to explain the meaning of its own
law.184

137. Brazil argues that Indonesia's description of its transportation requirements "seems to
imply" that transhipment is not included in Indonesia's description of its transit requirements, and
thus, in violation of Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture."185 Indonesia submits that Brazil's assertion is incorrect. Transhipment is the "transfer
of a shipment from one carrier, or more commonly, from one vessel to another. 186 Article 19(c) of
Regulation 34/2016 explicitly allows for importation by way of transit or, in other words, a change
in the vessel used to transport the goods.

138. In its rebuttal submission, Brazil in essence acknowledges that the requirement of direct
transportation may in fact not exist, and that "transit (transhipment) is allowed in practice". It
made a new claim, however, that restrictions on the transportation are caused by "the legal
uncertainties generated by the murky language of Regulation Article 19(a) of MoA Regulation
34/2016".187 Indonesia submits that this claim falls outside the Panel's terms of reference. In
section II(ii) (third and tenth bullets) of its panel request, Brazil challenged "[r]estrictions on the
transportation of imported products by … requiring direct transportation from the country of origin
to the entry points in Indonesia", as inconsistent, inter alia, with Article XI:1 of the GATT 1994.
The preposition "by" indicates that the requirement of direct transportation was the only relevant
cause of the alleged restrictions on the transportation of imported products.188

139. In the light of the foregoing, Indonesia submits that Brazil has not made a prima facie case
to support its claim that the so-called direct transportation requirement violates Article XI:1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture.189

179
Import Declaration from Australia, Exhibit IDN-79.
180
See Indonesia's responses to Panel Questions No. 39 and 40; Bill of Lading and Import Declaration in
Exhibit IDN-88.
181
Brazil's opening statement at the first substantive meeting, para. 107.
182
Brazil's rebuttal submission, para. 216.
183
Appellate Body Report, US-Carbon Steel, para. 157.
184
Appellate Body Report, Thailand – Cigarettes (Philippines), footnote 253 endorsing para. 7.684 of the
Panel Report, and referring to Panel Report, China – Intellectual Property Rights, para. 7.28. See also Panel
Report, EC – Trademarks and Geographical Indications, para. 7.55.
185
Brazil's rebuttal submission, para. 219 (emphasis added).
186
See definition of transhipment in http://www.businessdictionary.com/definition/transshipment.html,
last accessed on 03.10.2016 (emphasis added).
187
Brazil's rebuttal submission, para. 222.
188
Indonesia's response to Panel Question No. 139.
189
See Indonesia's first written submission, paras. 303-311; Indonesia's response to Panel Question No.
139.
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V. CONCLUSION

140. In the light of the foregoing, Indonesia requests the Panel to find that all of Brazil's claims
are without merit and should be rejected

_______________
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ANNEX C

ARGUMENTS OF THE THIRD PARTIES

Contents Page
Annex C-1 Executive summary of the arguments of Argentina C-2
Annex C-2 Executive summary of the arguments of Australia C-8
Annex C-3 Executive summary of the arguments of Canada C-11
Annex C-4 Executive summary of the arguments of the European Union C-15
Annex C-5 Executive summary of the arguments of Japan C-17
Annex C-6 Executive summary of the arguments of New Zealand C-20
Annex C-7 Executive summary of the arguments of Norway C-25
Annex C-8 Executive summary of the arguments of Paraguay C-27
Annex C-9 Executive summary of the arguments of Qatar C-28
Annex C-10 Executive summary of the arguments of the United States C-30
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ANNEX C-1

EXECUTIVE SUMMARY OF THE ARGUMENTS OF ARGENTINA

1. Argentina takes part in this case due to its systemic interest in the correct and consistent
interpretation and application of the covered agreements. This executive summary includes
comments made by Argentina in its written submission, during the third party session and in its
reply to the written questions by the Panel.

Brazil's claim of undue delay under article 8 and annex C(1)(a) of the SPS Agreement
2. In Argentina's view, Article 8 of the SPS Agreement establishes an obligation to comply with
the provisions contained in Annex C with regard to the operation of "control, inspection and
approval procedures."

3. Annex C(1) provides a general obligation to ensure that any procedure aimed to "check and
ensure the fulfillment of sanitary and phytosanitary measures" complies with the specific
obligations in paragraphs (a) to (i). The use of the word any in this provision does not seem to
limit the scope Article 8 and Annex C.

4. The use of the term inter alia and including does not restrict the possibility of other
procedures falling within their scope. All in all, article 8 and Annex C have a wide scope of
application.

5. In this context, Argentina considers that Brazil is correct in affirming that "the negotiation of
the International Veterinary Certificate is a procedure designed to check and ensure the fulfillment
of sanitary requirements" under Article 8 and Annex C(1) of the SPS Agreement, since the
successful completion of this procedure is a prerequisite to allow the importation of Brazilian
chicken meat and chicken products, and therefore it is subject to the obligations set forth in
Article 8 and Annex C(1)(a).

6. The negotiation of the International Veterinary Certificate is the only way available to obtain
access to the Indonesian market and successful completion of this procedure is a prerequisite to
allow the importation of chicken meat and chicken products.

7. Argentina notes that there is uncontested evidence on the record that shows that both Brazil
and Indonesia started and maintained periodical bilateral negotiations regarding the approval of
the "Health Certificate" by the competent authorities of both countries for the importation of
chicken meat and chicken products. Unlike the halal certificate, the "Veterinary" or "Health"
Certificate serves mainly to check the compliance with several SPS requirements. In this regard,
Argentina understands that the negotiation of the Veterinary Certificate is an approval procedure
applied to comply with several of the objectives listed in Annex A(1) of the SPS Agreement and
therefore falls within the definition of an SPS measure.

8. Therefore, in making a determination under this procedure, Indonesia must comply with the
pertinent obligations on "approval procedures" under Annex C(1) of the SPS Agreement.

9. Second, Argentina believes that "the analysis of a claim under Article 8 and Annex C(1)(a)
requires two steps. When intending to identify an undue delay under Article 8 and Annex C(1)(a),
the complainant must establish first that there has been a "delay". Second, the complainant must
establish that the delay was "undue."

10. The first step for establishing that there has been a delay is to determine its existence. In
this regard, "a determination of whether a delay exists should be made in light of the nature and
complexity of the procedure to be undertaken and completed."

11. A period of time lost because of the lack of response from a Member's competent authority
in the negotiation of an International Veterinary Certificate, especially when there are available
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guidelines from the relevant international organization, can be considered as a "delay" incurred by
that Member in the procedure.

12. Argentina recognizes that the seven years delay alleged by Brazil could not be, in and of
itself, conclusive as to whether Indonesia incurred in a delay. However, in light of the aforesaid
and considering Brazil's evidence submitted for this claim, Argentina considers that in the present
case there is a presumption of inactivity by Indonesia with regard to the negotiation of an
International Veterinary Certificate, which acts as a strong indication that in such circumstances
Indonesia may have incurred in a "delay".

13. Regarding the second step, i.e. establishing that the existing delay is "undue", the Appellate
Body defined "undue" as something "that ought not to be or to be done, inappropriate, unsuitable,
improper, unrightful, unjustifiable" or "going beyond what is warranted or natural; excessive,
disproportionate." It also explained that Annex C(1)(a) requires that relevant procedures are
undertaken and completed with appropriate dispatch.

14. Argentina considers that the term "undue delay" suggests that both the reason for the
"delay" and its duration are relevant considerations for determining whether the delay is "undue"
and therefore they must be analyzed taking special account on the proportionality between them.
The proportionality between the reason and the duration of the delay has a central role in defining
whether the delay is "undue". Such proportionality must be addressed always on a case-by-case
basis, and in the context of the circumstances of each individual case.

15. In the present case, according to the evidence submitted by Brazil, it can be inferred that
Indonesia has not provided an adequate explanation that could justify its delay in the negotiation
of the International Veterinary Certificate. Therefore, absent a proper justification by Indonesia, it
can be considered that such delay was "undue".

16. Argentina would like to highlight as well that Brazil is not challenging certain provisions of
the Indonesian Regulations as such. According to Argentina's understanding, Brazil is challenging
the undue delay of the Indonesian authorities to undertake and complete the sanitary procedures
required to allow Brazilian imports of chicken meat and chicken products into Indonesia. Therefore,
the measure at issue under this claim is Indonesia's undue delay and not the legal provision. As
Indonesia explains in its submission, "any act or omission attributable to a WTO Member can be a
measure of that Member for purposes of dispute settlement proceedings." Hence, in the present
dispute Brazil is challenging Indonesia's omission to undertake and complete the approval
procedures, and not a particular provision of certain Regulation.

17. Even assuming, arguendo, that Brazil could be challenging certain provisions of the
Indonesian legislation as such for the undue delay claim, Argentina notes that the defense
presented by Indonesia is not clear or could have been exposed with a greater level of precision.
At the beginning of its argument, Indonesia seems to be suggesting that Brazil's claim is incorrect
because it addressed provisions of a wrong chapter of MoA Regulation 58/2015 (i.e. "Supervision"
instead of "Import Procedures"). Argentina does not agree. While the title of the chapter of a
Regulation does not always confine the scope of its provisions, Argentina considers that
Article 33(1) provides that the performance of the "supervision" and/or "control" is precisely on
the veterinary public health requirements. In turn, Article 36(4) details that these "requirements
[…] are the veterinary certificate and halal certificate for the required product." Hence, in light of
the findings of the Panel in EC – Approval and Marketing of Biotech Products, the application of
these provisions ensure "the fulfillment of one or more SPS substantive requirements."

18. Indonesia seems to suggest that Brazil's claim is incorrect because it addressed the wrong
legislation (i.e. "MoA Regulation 58/2015" instead of "Government Regulation 95/2012").
However, Argentina notes that, according to the evidence in the record, in 2014 – when Regulation
95/2012 was already in force - Indonesia informed Brazil that "the importation of poultry meat into
Indonesia's territory is allowed as long as they meet the requirements stipulated in the Minister of
Agriculture Regulation No. 84/2013" and when asked about the approval procedures for the Health
Certificate for Brazilian poultry, Indonesia informed that "based on Minister of Agriculture
Regulation No. 84/2013, the approval step for country and business unit will only be granted after
desk review and on site review are completed." Argentina also notes that MoA Regulation 84/2013,
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which replaced MoA Regulation 50/2011, has been replaced by MoA Regulation 139/2014 which, in
turn, has been replaced by MoA Regulation 58/2015, which is the regulation referred to by Brazil.

19. All these regulations are similar in their design, structure and even content. Therefore,
despite the subsequent modifications of the legislation, the Sanitary Certificate requirement seems
to be a permanent requirement which existed before Government Regulation 95/2012 went into
force.

20. Argentina considers that the evidence in the record, including Indonesia's reply to Brazil
questions pursuant to Article 5.8 of the SPS Agreement, does not establish that the importation
requirements are addressed in Government Regulation 95/2012 and not in MoA Regulation
58/2015.

21. Furthermore, Indonesia provides an explanation of the stages of the approval procedure to
import chicken meat and chicken products and affirms that any delays experienced by Brazil [in
the approval procedure] are of its own doing. Argentina is puzzled with Indonesia's argument.
Argentina notes that Indonesia does not contend the existence of a delay in the procedure for
approval to import chicken meat and chicken products. Rather, Indonesia tries to justify the
existence of any delay in its approval procedure by attributing it to Brazil's failure to submit certain
documentation regarding the halal requirements.

22. Argentina agrees that delays attributable to action or inaction of an applicant cannot be held
against the Member carrying out the procedure and that delays which "are justified in their
entirety" by the Members' need "to determine with adequate confidence whether their relevant
SPS requirements are fulfilled" should not be considered undue. However, this is not the case.
Argentina considers that a "procedure applied to check and ensure the fulfillment of one or more
substantive SPS requirements" should not be delayed by non SPS requirements. As Indonesia
recognizes, "[t]he halal requirements are enforced for religious reasons, rather than to protect
human health."

23. In fact, the Panel in EC – Approval and Marketing of Biotech Products made exactly the
same finding. According to the Panel, delays caused by measures which are not based on scientific
evidence may be considered "undue". The Panel went further on by explicitly stating that "[t]his
could be the case, for example, if a delay is caused by a request for additional information which
has nothing to do with the issue of whether the relevant product meets the SPS requirements
concerned". This seems to be exactly what Indonesia did, according to its own statements. The
delay in the approval of the veterinary certificate was caused by an alleged failure to submit
documentation regarding halal requirements, i.e., information which "has nothing to do" with the
issue of whether Brazilian chicken meat and products met the SPS requirements concerned.

24. Indonesia asserts that the halal certificate requirement falls outside the scope of the
SPS Agreement because "the information required for complying with halal requirements are
completely different from sanitary or phytosanitary information provided by the business units to
obtain the International Veterinary Certificate."

25. Argentina believes that this argument does not help Indonesia's position. Argentina agrees
that the halal requirement is not a sanitary or phytosanitary requirement. As a matter of fact, the
parties in this dispute are also in agreement on this point. Argentina considers that this only
reinforces the fact that, as mentioned before, Indonesia incurred in an undue delay by requiring a
non SPS requirement to justify a delay in an SPS approval procedure.

Brazil's claim under Article 4.2 of the Agreement on Agriculture

26. According to Indonesia, when presenting a claim of inconsistency of a given measure with
Article 4.2, together with bearing the burden of showing that the measure falls within the scope of
this provision, the complainant must show a "second element", i.e. that the measure at issue is
not "maintained under [inter alia] … other general, non-agriculture-specific provisions of
GATT 1994 [such as Article XX]". Without providing at least some evidence or argumentation
addressing both of those elements, Indonesia believes that the complainant cannot make its prima
facie case of inconsistency with Article 4.2.
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27. As many of the third parties in this dispute, Argentina disagrees with Indonesia's
interpretation of the burden of proof under Article 4.2. Indonesia's arguments run counter not only
with long standing WTO jurisprudence but also, if adopted, would result in an unreasonable burden
for the complaining party.

28. First, as it was made clear by the Panel in India - Quantitative Restrictions, the phrase
"measures maintained under balance-of-payments provisions or under other general,
non-agriculture-specific provisions of GATT 1994 or of the other Multilateral Trade Agreements in
Annex 1A to the WTO Agreement" in footnote 1 constitutes an exception or an affirmative defense.
Furthermore, the Panel in Chile – Price Band System explained that footnote 1 must be read "…as
excluding from the scope of Article 4.2 those measures which Members are allowed to maintain in
accordance with the provisions in GATT 1994 laying down exceptions to the general obligations of
GATT 1994…". Indonesia recognizes such phrase as an exception. In its First Written Submission
Indonesia states that "[a] number of panels have interpreted the latter phrase as excluding from
the scope of Article 4.2 measures maintained under various exceptions set out in the
GATT 1994…".

29. As it is clear since US – Wool Shirts and Blouses, it is the burden of the defending party to
invoke an exception or an affirmative defense. In fact, quoting US – Wool Shirts and Blouses,
Indonesia itself recognizes that in the case of a provision which "…is in the nature of affirmative
defense, […] 'the burden of establishing such a defense should rest on the party asserting it',
namely the respondent".

30. Therefore according to well established WTO jurisprudence and Indonesia's own statements,
it is clear that it is for the responding party to invoke the second phrase in footnote 1 as an
affirmative defense or exception and submit evidence that a measure which falls under that
footnote is not maintained under a general, non-agriculture-specific provision of the GATT.

31. Furthermore, according to Indonesia, a party claiming a violation to Article 4.2 of the
Agreement on Agriculture should show first that the measure falls within the category of
measures specified in footnote 1. Then, for example, it should demonstrate that it is not
maintained under inter-alia, article XII, article XIX, any of the sub-paragraphs a) to j) in article
XX or the chapeau and even article XXI of the GATT. And this is only for the GATT. Not only the
argumentative exercise would be almost endless for the complainant, but also such party would
be required to submit arguments without knowing in advance which of the exceptions or
affirmative defenses will be invoked by the responding party, if any.

32. As the United States and the European Union stated in their written submissions, adopting
Indonesia's interpretation would render a successful Article 4.2 claim either difficult or nearly
impossible. In Argentina's opinion, Indonesia's interpretation is unreasonable and could, in effect,
deter complaining parties from pursuing claims under Article 4.2 due to the excessive burden they
would face, depriving such provision of its role as one of the fundamental obligations in the
Agreement on Agriculture.
The restrictions on intended use under Articles III:4 and XI:1 of the GATT 1994

33. MoA Regulation 58/2015 is a mandatory legislation within the scope of Article XI:1. Within
the import procedures set forth in Chapter III of the Regulation, Article 29(j) provides that all the
recommendations issued for accepted applications shall at least contain the intended use, among
other requirements. Hence, detailing the intended use is a condition for the issuance of the
recommendation of importation.

34. Furthermore, when defining the scope of the term "intended uses" for carcass and meat and
processed products, Article 31 expressly limits these products to be used in hotels, restaurants,
caterings, industries, particular purposes, and modern markets for processed products only.
Therefore, there is a presumption that these restrictions may impose a condition for the
importation of chicken meat and chicken products that is limiting, i.e. that has a limiting effect, in
a manner inconsistent with the obligations under Article XI:1 of the GATT 1994.
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35. Also, in Argentina's view, the three elements as described in paragraph 263 of Brazil's First
Written Submission could be the basis for a violation of GATT Article III:4. In the first place, the
"intended use" that must be declared in the recommendation of importation following an online
application is a condition that, according to the plain text of Regulation 58/2015 and its application
by Indonesia, is not based in any other factor different from the origin of the product, i.e., whether
it is imported or domestic.

36. Secondly, as above mentioned, the MoA Regulation is a mandatory legislation. Argentina
considers that certain provisions of this Regulation have "an effect on" the use, internal sale and
offering for sale of imported products. While Argentina is conscious of the fact that a broad
interpretation of the term "to affect" does not necessary imply that any measure can fall within the
scope of Article III:4 of the GATT 1994, it also believes that Brazil has identified the link of the
MoA Regulation with the imported products so that it could be established that it affects the
conditions of competition of the imported products on the Indonesian market in such a way that
the domestic products are protected.

37. Thirdly, regarding the less favourable treatment analysis, Argentina notes that this
restriction does not seem to apply to domestic products. In this sense, Argentina considers that if
certain requirements are imposed only on imported products, such as the "intended use"
requirement, the mere existence of this requirement, applied only to imported products, may
provide an indication that such products are treated less favourably.

38. Argentina agrees with the EU in that Articles XI:1 and III:4 of the GATT 1994 contain
different obligations and have each their own legal standard. Article III is relevant for goods after
that have cleared customs already, whereas Article XI:1 is relevant to assess measures that affect
the actual importation of products. Without making reference to Article XI, Ad Note to Article III
sheds some further light with respect to the application of Article III. According to this provision, a
measure "enforced or collected in the case of an imported product at the time or point of
importation" can be regarded as an internal measure. In that sense, for internal regulations
applying to imported and like domestic products and enforced at the time of importation for the
imported product, an analysis under Article III is prioritized.

39. As the EU recalls, the condition for Article III to apply is that the imported product and the
domestic product face the same (although not necessarily identical) requirement. Such a
requirement is then an internal regulation, although enforced upon importation. As the Panel in
EC – Asbestos explained, "… the word … "and" in the English text … [of Ad Note to Article III]
implies in the first place that the measure applies to the imported product and to the like domestic
product."

40. However, Ad Note to Article III does not imply that when a measure is subject to Article III
then Article XI cannot apply. In this regard, it must be recalled that in India – Autos the Panel
considered that in certain circumstances a measure may have an impact (or effect) upon both the
importation of products (Article XI) and the competitive conditions of imported products on the
internal market (Article III).

41. The Panel in India – Autos implied that, in the context of a specific measure and in the
particular circumstances of a case, different effects of such measure may come under the purview
of Article III and Article XI. That finding seemed to reflect in a later dispute in Argentina – Import
Measures. In that case the Panel addressed a measure by which, among other requirements,
companies were not allowed to import unless they increased the level of local content of domestic
production through import substitution. 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 imports, because economic operators were required to replace a specified
amount of imports with domestic products in order to continue importing. The Panel found that
this requirement, together with others, constituted a restriction on the importation of goods and
thus rendered the measure inconsistent with Article XI:1 of the GATT 1994.
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42. Interestingly, in that case the Panel found that the same measure, with respect to the same
local content requirement, modified the conditions of competition in the market to the detriment of
imported products. Therefore, imported products were granted less favorable treatment than like
domestic products within the meaning of Article III:4 of the GATT 1994. Accordingly, the measure,
with respect to the local content requirement, was found to be inconsistent also with Article III:4
of the GATT 1994.
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ANNEX C-2

EXECUTIVE SUMMARY OF THE ARGUMENTS OF AUSTRALIA

AUSTRALIA'S VIEWS ON INDONESIA'S IMPORT LICENCING REGIMES

1. Under various Indonesian laws identified by Brazil,1 and by ourselves and other third parties
in written submissions, Indonesia has in place the following measures to restrict imports of animal
products:

(a) prohibition of chicken meat and chicken products not listed in its regulations. 2 This is in
effect a positive list prohibition;
(b) restriction of importation other than for certain limited uses.3 This includes rules
preventing the sale of imported meat products in modern and traditional markets,
which reduce the commercial opportunities for imported goods;
(c) limited licence validity periods and application windows. These prevent long term
planning and contractual arrangements, impose additional costs on importers and
exporters when the issuance of licences is delayed, and effectively prevent imports at
the beginning and end of each import period;4
(d) fixed licence terms. These prevent importers from responding to any changes in the
importing or exporting market during an import period;5
(e) restrictions on the transportation of imported animal products;6 and
(f) strict enforcement of halal labelling requirements7 when these same requirements are
rarely enforced with regard to equivalent domestic products.

Australia considers that these measures constitute prohibitions and restrictions on importation
inconsistent with Article XI:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994)
and Article 4.2 of the Agreement on Agriculture. To the extent that this Panel finds that the use,
sale and distribution restrictions are internal measures, Australia considers that they are contrary
to Article III:4 of the GATT 1994.8

2. Australia agrees with Brazil that, to the extent the Panel considers that Indonesia's
measures are non-automatic licensing procedures, they are also inconsistent with Article 3.2 of the
Agreement on Import Licensing Procedures. As there is no underlying permissible restriction
implemented by these licensing procedures, the trade-restrictive effects of these procedures,
including their effect on long-term business planning and the flow of goods at the beginning and
end of each import period, must be considered "additional". Furthermore, the procedures are
clearly "more administratively burdensome than absolutely necessary" as there is no permissible
measure that they administer.

INDONESIA'S CLAIMS REGARDING ITS MEASURES

3. In our written submission, Australia disagreed with several claims made in Indonesia's first
written submission. In Australia's view, Indonesia's assertions in regard to Article XI.1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture, and in regard to Article 4.2 of the
Agreement on Agriculture and Article XX of the GATT 1994, are not supported by the text of the
WTO covered agreements and are inconsistent with the findings of previous panels and Appellate
Body reports.

1
Brazil's first written submission, paras. 49-56, 80-86, 172-189.
2
Brazil's first written submission, paras. 191-194.
3
Brazil's first written submission, paras. 195-199.
4
Brazil's first written submission, paras. 200-209.
5
Brazil's first written submission, paras. 210-213.
6
Brazil's first written submission, paras. 214-217.
7
Brazil's first written submission, paras. 136-139.
8
Brazil's first written submission, paras. 268-283.
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4. A number of disputes have considered claims made by Members under both Article XI:1 of
the GATT 1994 and Article 4.2 of the Agreement on Agriculture. As outlined in Australia's written
submission, the panels in Korea - Beef and India - Quantitative Restrictions, found that certain
measures breached both Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture.9

5. As Australia outlined in paragraph 24 of its written submission, Australia agrees with Brazil
that Indonesia's restrictions on imports of animal products are "measures of the kind which have
been required to be converted into ordinary customs duties"10 that are prohibited under Article 4.2
of the Agreement on Agriculture. These measures are also "quantitative import restrictions …
discretionary import licensing … and similar border measures" 11 as identified in footnote 1 to
Article 4.2 as specifically prohibited under Article 4.2. These measures are contrary to Article 4.2
as a result of the same limiting effects on imports that rendered them inconsistent with
Article XI:1 of the GATT 1994. As previous panels have found, a breach of Article XI:1 of the
GATT 1994 will also constitute a breach of Article 4.2 of the Agreement on Agriculture, where the
measure is among those listed in footnote 1 to Article 4.2.12

6. Indonesia has also asserted that Article III:4 of the GATT 1994 and Article XI:1 of the
GATT 1994 are mutually exclusive in their scope of application.13 To date, these provisions have
not been found by panels to be mutually exclusive. Given the systemic issues regarding the
distinction between market access and domestic regulation, in Australia's view the Panel should
carefully consider the classification of the measures at issue before reaching a conclusion. It is
Australia's view that the Panel should examine the relationship between the two provisions in light
of the manner in which Brazil has characterised its claims.

7. The Panel in India – Autos found that "there may be circumstances in which specific
measures may have a range of effects".14 The Panel went on to say that "[i]n appropriate
circumstances [specific measures] may have an impact both in relation to the conditions of
importation of a product and in respect of the competitive conditions of imported products on the
internal market within the meaning of Article III:4".15 For a Panel to find that a measure has
"different effects" (i.e. definitive effect on importation, and then modifies the conditions of
competition once the goods have entered the market), and therefore the measure may be both an
internal measure and a border measure, will turn on the facts in dispute, and the scope of the
measure under challenge. In Brazil – Retreaded Tyres, the Panel noted that "what is important in
considering whether a measure falls within the types of measures covered by Art. XI:1 is the
nature of the measure".16 In Australia's view, the Panel should examine whether a measure can be
assessed as a border measure and internal measure simultaneously in light of the manner in which
Brazil has characterised its claims.

8. Australia notes that regulations that give effect to the measures at issue in this dispute have
been frequently replaced. This has created continuing uncertainty and lack of transparency,
without effecting any material change.17 Australia considers that in order to "secure a positive
solution to [a] dispute"18 it is important that the Panel make rulings and recommendations on the
measures at issue, irrespective of any changes to the regulations that Indonesia may have made,
which do not actually effect any material change. In this regard, the Panel's characterisation of the
measure will be important.

9. In its first written submission, Indonesia asserts that regardless of whether its measures are
found to be WTO-inconsistent under various agreements, the measures are nevertheless justified

9
Panel Report, Korea- Various Measures on Beef, paras. 762 and 768. Panel Report, India -
Quantitative Restrictions, paras. 5.238-5.242.
10
Article 4.2, Agreement on Agriculture.
11
Footnote 1 to Article 4.2, Agreement on Agriculture.
12
Panel Reports, Korea – Various Measures on Beef, para. 762 and India – Quantitative Restrictions,
paras. 5.238-5.242.
13
Indonesia's first written submission, paras. 81-89.
14
Panel report, India-Autos, para 7.296.
15
Ibid.
16
Panel report, Brazil – Retreaded Tyres, para 7.372.
17
Brazil's first written submission, paras. 57-58.
18
Article 3.7 of the Understanding on Rules and Procedures Governing the Settlement of Disputes
(DSU).
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under Article XX of the GATT 1994.19 Australia does not agree with Indonesia's claims that several
of its measures can be justified under the exceptions in Articles XX(a), (b) and (d) of the
GATT 1994. Indonesia provides no convincing evidence to support its claims that these measures
are designed or "necessary" to achieve these objectives or that it has considered less trade-
restrictive alternatives. Nor has Indonesia demonstrated it has equivalent measures in place to
address any similar alleged risks posed by like domestic products. The Panel should therefore
conclude that these measures do not meet the criteria in the Article XX exceptions, and also
amount to "an arbitrary or unjustifiable discrimination between countries where the same
conditions prevail, or a disguised restriction on international trade", contrary to the chapeau of
Article XX.

CONCLUSION

10. In conclusion, Australia considers that Indonesia's prohibitions and restrictions on imports of
animal products are clearly inconsistent with Indonesia's WTO obligations under the GATT 1994,
the Agreement on Agriculture and the Agreement on Import Licencing Procedures. In respect of
the GATT 1994, Australia further considers that these measures cannot be justified under any of
the exceptions in Article XX of the GATT 1994. Australia is further concerned that the measures at
issue have been frequently amended to cause further uncertainty for importers and exporters, in
order to achieve Indonesia's broader policy of self-sufficiency.

19
Indonesia's first written submission, paras. 179-192, 209-217, 232-234, 295-302, 342-355.
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ANNEX C-3

EXECUTIVE SUMMARY OF THE ARGUMENTS OF CANADA

I. INTRODUCTION

1. Canada intervenes in this dispute because of its systemic interest, as a major exporter of
agricultural products, including animals and animal products, in the correct interpretation of
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture (AoA).

II. INDONESIA'S IMPORT CONTROL MEASURES

2. The various laws and regulations maintained by Indonesia that make up its import control
regime overlap in substance and appear to Canada to be designed to function as an integrated
whole.

3. Several of the measures at issue refer in some way to "insufficiency of local production" as a
prerequisite for the approval of importation. Other measures appear to impose restrictions on the
end use of imported chicken meat and products. There is also a positive list of goods that may be
imported that seems to prohibit unlisted products from being imported. A multi-step approval
process for the importation of chicken meat and products confers broad discretionary powers on
decision-makers and appears to require that importers recomplete the process if they wish to
continue to import products beyond the prescribed "validity term". Shipping requirements stipulate
that carcasses, meat and/or processed products must be transported directly from the country of
origin to their Indonesian port of destination. Finally, one measure at issue appears to require a
valid International Veterinary Certificate as a pre-condition to importation.

III. ARTICLE XI:1 OF THE GATT 1994

4. Article XI:1 of the GATT 1994 lays down a general obligation to eliminate quantitative
restrictions. In doing so, it reflects one of the basic principles animating the GATT 1994, that is,
the idea that tariff measures are preferable to border measures that restrict trade volumes and
distort prices. Thus, measures that prohibit or restrict the importation, exportation, or sale for
export of products, other than duties, taxes or other charges, are inconsistent with the
GATT 1994.1

5. The Appellate Body has observed that the use of the word "quantitative" in the title of the
provision indicates that "Article XI […] covers those prohibitions and restrictions that have a
limiting effect on the quantity of a product being imported and exported." 2 However, the Appellate
Body has also noted that Article XI:1 does not cover "every condition or burden placed on
importation or exportation".3 For a measure to fall within the scope of Article XI:1, it must "limit
the importation or exportation of products".4

6. The Appellate Body has also indicated that the phrase "made effective through" suggests
that Article XI:1 covers, not only measures that set out prohibitions or restrictions, such as
quantitative limits or quotas, but also measures "through which a prohibition or restriction is
produced or becomes operative".5 The Appellate Body has further stated that "in the context of
import formalities or requirements, Article XI:1 requires an examination of whether those
measures themselves produce a limiting effect on imports."6

1
Panel Reports, India – Quantitative Restrictions, paras. 5.128-5.129; Colombia – Ports of Entry, para.
7.233; and Dominican Republic – Import and Sale of Cigarettes, para. 7.248.
2
Appellate Body Reports, China – Raw Materials, para. 320.
3
Appellate Body Reports, Argentina – Import Measures, para. 5.217.
4
Ibid.
5
Ibid. para. 5.218.
6
Appellate Body Reports, Argentina – Import Measures, para. 5.245.
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7. In addition, demonstrating that a measure has a limiting effect on imports does not require
a complainant to produce evidence of actual trade effects. Rather, "such limiting effects can be
demonstrated through the "design, architecture, and revealing structure of the measure at issue
considered in its relevant context."7 This is because Article XI:1 "protects competitive
opportunities" rather than trade flows.8

8. The Appellate Body has observed that the term "prohibition" is defined as a "legal ban on
the trade or importation of a specified commodity."9 This suggests that for a measure to constitute
a "prohibition" it must proscribe all trade in the commodity in question.

9. In contrast, the legal standard for determining whether a measure "restricts" imports
considers: 1) the limiting effect of conditions placed on imports and 2) the negative effect on the
condition of competitive opportunities of like imported goods.10

A. The panel must properly characterize measures under Indonesia's

Licensing Regime as restrictions or prohibitions

10. In Canada's view, various measures under Indonesia's import control regime appear to be
designed to protect and promote the domestic chicken industry. Canada does not take a final
position on the proper characterization of the various measures cited by Brazil, but notes that
most of the measures at issue appear to fit more easily into the category of import restrictions
under Article XI:1. Only the alleged delay in undertaking and completing the sanitary approval
required to enable Brazilian exports of chicken meat and products seems to operate as a de facto
general prohibition. This is because the alleged failure by Indonesia to undertake and complete
the approval process has precluded imports of Brazilian chicken meat and products to Indonesia
since 2009.

11. The panel in Argentina – Import Measures reiterated the meaning of "restriction" as
interpreted by previous panels and the Appellate Body:

The panel in India – Quantitative Restrictions also noted that the ordinary meaning
of the term "restriction" is "a limitation on action, a limiting condition or
regulation". The panel in India – Autos and the Appellate Body in China – Raw
Materials endorsed this interpretation. The Appellate Body in China – Raw Materials
added that the term "restriction" "refers generally to something that has a limiting
effect".11

12. In Colombia – Ports of Entry, the panel reaffirmed the reasoning applied by the India –
Autos panel that a "restriction" cannot mean merely "prohibitions" on imports since Article XI:1
covers both instances of restrictions and prohibitions on imports.12 Likewise, a prohibition cannot
mean only that restrictions on imports exist. This distinction should similarly be properly reflected
in the panel's assessment of Brazil's claims since Brazil refers to both the general measure and the
individual measures as operating to both limit imports of chicken meat and products and as a
general prohibition on imports. This conflation of the terms 'prohibition' and 'restriction' has the
potential to expand the meaning of the term "restriction" and the understanding of measures that
constitute a restriction on imports. Such a conflation should be avoided.

13. Canada submits that the positive list maintained by Indonesia on permitted chicken meat
and products appears to operate as a restriction rather than a complete prohibition under
Article XI:1 as it only excludes from import certain subcategories of chicken meat and products.

7
Ibid. para. 5.217.
8
Panel Report, Argentina – Hides and Leather, para. 11.20.
9
Appellate Body Reports, China – Raw Materials, para. 319.
10
Panel Report, Colombia – Ports of Entry, para. 7.234.
11
Panel Reports Argentina – Import Measures, para. 6.452. See also Panel Reports, India – Quantitative
Restrictions, para. 5.129; India – Autos, paras. 7.269-7.270; and Appellate Body Reports, China – Raw
Materials, para. 319.
12
Panel Report, Colombia – Ports of Entry, para. 7.234.
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14. Canada agrees with Brazil that the design and structure of the import licensing system
creates a procedural burden on importers and creates a disincentive to import, negatively affecting
the conditions of competition and limiting imports.13

15. Meanwhile, the possibility of additional restrictions being implemented pursuant to the
discretion that is accorded to the Minister under Indonesia's chicken products and meat import
regime can affect the business decisions of private actors to avoid imports. The panel in Argentina
– Import Measures found that completely opaque and unfettered discretion exercised by
governmental entities over import licenses creates uncertainty for importers of goods and is
therefore a restriction that violates Article XI:1 of the GATT 1994.14 Therefore, a measure that
lacks criteria and provides overly broad discretion in determining if the required approvals will be
granted, and consequently if the import licence will be issued, is likely to constitute an import
restriction that is inconsistent with Article XI:1 of the GATT 1994.

B. The panel must assess whether individual measures or the cumulative

effects of measures operate as a de facto prohibition on imports of
chicken meat and products

16. The limiting effects on imports or the negative effects on the conditions of competition of
imports under Article XI:1 of the GATT 1994 should be characterized as a "prohibition" only where
the effects are so severe as to completely prevent the entry of any of the subject goods. Where an
individual measure or the cumulative effect of numerous measures operates to create a de facto
prohibition on imports, then those measures must be found inconsistent with Article XI:1 of the
GATT 1994. Therefore, the Panel must consider whether the cumulative effect of the measures at
issue operate as a de facto complete ban on chicken meat and products from Brazil.

17. Both the delays in the veterinary certification and the direct transportation requirements for
chicken meat and products appear to operate as a de facto prohibition on chicken meat and
chicken imports from Brazil, even though the measures, on their face, do not prohibit imports of
such products.

18. Canada recalls that a prohibition has been defined as instituting a legal ban on a good. The
legal standard applied by the Panel should maintain that threshold. Anything less than a "legal
ban", whether de facto or de jure, should still be assessed as a restriction on imports.

IV. ARTICLE 4.2 OF THE AOA: ANALYSIS OF PROHIBITED NON-TARIFF MEASURES

A. The legal standard to be applied

19. Under Article 4.2 of the AoA, WTO Members are obliged not to maintain, resort to, or revert
to any measures of the kind which have been required to be converted into ordinary customs
duties.15 Footnote 1 provides examples of measures captured by Article 4.2. If a WTO Member
adopts or maintains a measure of the kind listed in Footnote 1, that Member violates Article 4.2.

B. Indonesia's Measures: Quantitative Import Restriction, Discretionary

Import Licensing, or "Similar Border Measure"?

1. The domestic insufficiency condition

20. Indonesia's framework legislation, as applied through its import licensing regime, only allows
for the possibility of imports of chicken and chicken products when the government deems
domestic production insufficient to satisfy the market. Furthermore, the laws and regulations
establishing Indonesia's import licensing regime do not provide for explicit criteria by which the
government is to determine domestic insufficiency. In Canada's view, this strongly suggests that
Indonesia's "domestic insufficiency" condition operates as a quantitative import restriction. If,
however, Indonesia's "domestic insufficiency" condition does not constitute a quantitative import

13
Ministry of Trade Regulation 05/M-DAG /PER/1/2016, Exhibit BRA-03.
14
Panel Reports, Argentina – Import Measures, para. 6.467.
15
Article 4.2 of the Agreement on Agriculture, as contained in Annex 1A to the WTO Agreement
(Article 4.2).
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restriction, it should also be assessed against the "discretionary import licensing" category.
Should Indonesia's domestic insufficiency condition not fall squarely within the meaning of a
quantitative import restriction or discretionary import licensing, it should also be evaluated to
determine whether it falls within the meaning of a "similar border measure other than ordinary
customs duties".

2. Strict application windows and short licence validity periods

21. Indonesia's one-month application window for import recommendations and approvals
directly preceding the three-month validity period for import licences limit the quantity of imports
of chicken and chicken products for several weeks within each quarter of a given year. Should
Indonesia's strict licence application windows and short licence validity periods not constitute per
se quantitative import restrictions, given that they have the effect of limiting the quantity of
imports of chicken and chicken products, they should be considered as "similar border measures
other than ordinary customs duties".

3. End-use restrictions

22. Indonesia's end-use requirements for imports of chicken and chicken products prohibit their
importation except for certain specific purposes, restricting access to the Indonesian market,
either fully or partially. Indonesia's Schedules of Concessions under the GATT 1994 does not
provide for such restrictions. Should Indonesia's end-use requirements not constitute per se
quantitative import restrictions, given that they have the effect of restricting access to the
Indonesian market, either fully or partially, they should be considered as similar border measures
that are like or resemble the non-tariff measures listed in Footnote 1 to Article 4.2.

V. CONCLUSION

23. Canada invites the Panel to take the foregoing observations into account when assessing
whether Indonesia's measures collectively and/or individually comply with the requirements of
Article XI:1 of the GATT 1994 and Article 4.2 of the AoA.
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ANNEX C-4

EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE EUROPEAN UNION

1. The European Union intervenes in this case because of its systemic interest in the correct
and consistent interpretation and application of the covered agreements and other relevant
documents, and the multilateral nature of the rights and obligations contained therein, in particular
the General Agreement on Tariffs and Trade 1994 (GATT 1994), the Agreement on Agriculture, the
Agreement on Import Licensing Procedures (Import Licensing Agreement) and the Agreement on
the Application of Sanitary and Phytosanitary Measures (SPS Agreement). This executive summary
integrates comments made by the European Union in the Third Party Hearing on 14 July 2016 and
in its reply to the written questions by the Panel of 2 August 2016.

2. The case concerns a number of measures by Indonesia restricting the importation of chicken
meat and chicken products. The European Union believes that the measures challenged by Brazil
constitute quantitative restrictions within the meaning of Article XI:1 of the GATT 1994 and Article
4.2 of the Agreement on Agriculture. Their justification under Article XX of the GATT 1994 is
implausible for most of them, and at least doubtful for the intended use requirement. The
combined operation of various features of the Indonesian import licensing system, including
applications to and documents issued by various authorities, very limited application windows and
validity periods for import licences and fixed terms thereof is also problematic with regard to
Article 3.2 of the Import Licensing Agreement. The main legal arguments made by the European
Union in its submissions can be summarised as follows.

3. On the scope of application of the various provisions at stake: The European Union does not
see a conflict between the provisions of Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture. For the purposes of the analysis in these proceedings, both provisions
contain substantially similar obligations, especially with the same burden of proof as regards
exceptions under Article XX of the GATT 1994. Hence, they apply concurrently to the measures at
issue, with no mandatory order of analysis. Article 3.2 of the Import Licensing Agreement applies
only to procedural restrictions (requirements of a formal, administrative nature), not to
substantive restrictions (the import regime itself), which the non-automatic licensing procedure
implements. Such procedural restrictions can be challenged concurrently under Article 3.2 of the
Import Licensing Agreement and Article XI:1 of the GATT 1994 1, without a mandatory order of
analysis.

4. On the alleged overarching measure of a "general import ban" on Brazilian chicken meat and
chicken products, the European Union invites the Panel to consider all measures composing the
overarching measures individually before examining the alleged overarching measure composed of
these measures. In the European Union's view, in principle only components which are themselves
non-compliant with WTO-law should be taken into account when assessing the existence of the
overarching measure. The approach to be taken might however be different where (some of) the
individual measures are inseparable from each other or from the overarching measure.

5. The elements that a complainant must substantiate are attribution of the measure to the
respondent, precise content and any additional features relevant to the specific type of measure at
stake. What these additional features are depends on how the measure has been described or
characterized by the complainant2. In the present case, following Brazil's description of the
overarching measure, such additional feature consists in the fact that the individual measures,
linked by virtue of the underlying policy objective of protecting domestic production, operate
together so as to constitute a total import ban. It must result from the design and architecture of
the overall system that it is more than the sum of the individual measures. Figuratively speaking,
the overarching measure is like a "bouquet" of flowers, which by its composition and arrangement
is obviously more than individual flowers lying around scattered on the floor. When considering
whether individual components work together as a single measure distinct from its components,

1
See Appellate Body Report, Argentina – Import Measures, para. 5.244.
2
Appellate Body Report, Argentina – Import Measures, paras. 5.108, 5.110.
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the Panel needs to carry out a holistic assessment of the entire system, with particular attention to
the overall effects and the underlying policy objective. The underlying objective is a central
element; it can be considered as the "glue" that glues the individual measures together into the
overarching measure.

6. On the question whether the intended use requirement falls under Article III:4 and XI:1 of
the GATT 1994, the European Union invites the Panel to consider the design and architecture of
the measure. By its design and architecture, the requirement seems to be a border measure falling
under Article XI:1 of the GATT 1994 (rather than a "behind the border measure" falling under
Article III:4 of the GATT 1994). The measure has a clear potential impact on trade volumes, and,
in particular, the European Union has not seen evidence of equivalent domestic legislation
restricting uses for domestic frozen meat in the same way as for imported frozen meat. Thus, the
measure cannot be considered an internal measure pursuant to the Ad note to Article III of the
GATT 19943 If Indonesia were to show that such truly equivalent internal regulation exists, the
assessment would be different.

7. For the so-called "likeness test" under Article III:4, the Panel should not apply
mechanistically the different criteria developed by the case-law (physical properties, end-uses,
consumers' tastes and habits and tariff classification). It should rather analyse which are the
products that are in a competitive relationship at least in a certain segment of the market 4 It is
crucial that the universe of products on both sides of the equation (imported and domestic) is
exactly the same.

8. With regard to an alleged undue delay of the competent authorities in undertaking and
completing the approval procedures within the meaning of Article 8 and Annex C(1)(a) of the
SPS Agreement, the European Union is of the opinion that the inaction of the applicants can only
be relevant to justify that delay if it relates to the failure to submit documents or other evidence
required in order to conduct the risk assessment or other controls designed to protect human,
animal or plant life or health. The fact that domestic legislation makes the completion of a
procedure under the SPS Agreement dependent on the satisfaction by the applicants of other
requirements unrelated to the objectives of that Agreement should not, regardless of the nature of
such requirements and of their eventual consistency with WTO obligations, justify of itself the
inaction of the authorities competent for administering the SPS approval procedure.

3
See Panel Report, EC — Asbestos, paras. 8.91-8.95.
4
Appellate Body Reports, EC-Asbestos, paras. 101-103 (and cases cited therein); Philippines — Distilled
Spirits, paras. 121, 220.
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ANNEX C-5

EXECUTIVE SUMMARY OF THE ARGUMENTS OF JAPAN

I. The Relationship of Article 4.2 of the Agreement on Agriculture With Article XI:1 of
the GATT 1994

1. Although Indonesia argues that the "difference between how the balance is struck between
Members' obligations and rights" under Article 4.2 of the Agreement on Agriculture, on the one
hand, and Articles XI:1 and XX of the GATT 1994, on the other, "results in a conflict within the
meaning of the Article 21.1" of the Agreement on Agriculture,1 Japan disagrees with Indonesia's
argument. Indonesia's interpretation is not supported by previous WTO jurisprudence in Korea –
Various Measures on Beef2 and India – Quantitative Restrictions,3 which found that certain
measures breached both Article 4.2 of the Agreement on Agriculture and Articles XI:1 of the
GATT 1994. Further, there is no conflict between Article 4.2 of the Agreement on Agriculture and
Article XI:1 of the GATT 1994. A complainant claiming a violation of Article 4.2 does not have to
demonstrate that the challenged measure is not a measure maintained under other general, non-
agriculture-specific provisions of the GATT 1994 or other Multilateral Trade Agreements in
Annex 1A of the WTO Agreement, if the complainant chose not to challenge the measure under
any other provisions or when a respondent chooses not to invoke any other provisions in its
defense.

2. In any case, in this dispute, the complainant invokes both Article 4.2 of the Agreement on
Agriculture and Article XI:1 of the GATT 1994 and the Panel has the discretion to decide the order
of analysis of these alleged violations.

II. General Prohibition

3. Brazil argues that six challenged measures, when combined, impose a general ban on
imports of chicken meat and chicken products.4 In its examination of this claim, the Panel should
be guided by the Appellate Body's finding in Argentina – Import Restrictions that, in addition to
attribution and precise content of the challenged measure that must be established in every WTO
disputes, a complainant may be required to demonstrate "other elements, depending on the
particular characteristics or nature of the measure being challenged" 5 in proving the existence of a
measure at issue. Japan also notes that, in Argentina – Import Restrictions, the Appellate Body
stated that "a complainant challenging a single measure composed of several different instruments
will normally need to provide evidence of how the different components operate together as part of
a single measure and how a single measure exists as distinct from its components."6

4. Further, Japan is of the view that, although the Panel may begin its assessment by
considering the WTO-inconsistency of each element of the general prohibition, such assessment is
not enough to reach a conclusion that the general prohibition is inconsistent with Indonesia's WTO
obligation. This understanding is consistent with the panel's finding in US-Export Restraints, which
stated that "[i]n considering whether any or all of the measures individually can give rise to a
violation of WTO obligations, the central question that must be answered is whether each measure
operates in some concrete way in its own right. By this we mean that each measure would have to
constitute an instrument with a functional life of its own, i.e., that it would have to do something
concrete, independently of any other instruments, for it to be able to give rise independently to a
violation of WTO obligations." 7 This finding indicates that the general prohibition should exist as

1
Indonesia FWS, para. 74.
2
Panel Report, Korea – Various Measures on Beef, WT/DS161/169/R, July 31, 2000, para. 762.
3
Panel Report, India – Quantitative Restrictions, WT/DS90/R, April 6, 1999, paras. 5.241-5.242.
4
Brazil FWS, paras. 74-76.
5
Appellate Body Report, Argentina – Import Measures, WT/DS438/444/445/AB/R, January 15, 2015,
para. 5.104
6
Id., para.5.108
7
Panel Report, US – Export Restraints, WT/DS194/R, June 29, 2001, para. 8.85.
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distinct from its elements, and it is such nature of the general prohibition which should be
assessed in considering the WTO-consistency.
5. In any case, the Panel should carefully assess the interaction and operation of each element
of the general prohibition to decide whether the general prohibition exists and whether the
combination of each element leads to a finding of WTO-inconsistency because the
WTO-inconsistency of the general prohibition should not be found simply by combining multiple
elements into a single measure.
III. Intended Use
6. Indonesia argues that Article III:4 of the GATT 1994, concerning internal measures, and
Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture, concerning border
measures, are mutually exclusive and that only Article III:4 applies in this case. Japan submits
that the Panel's decision to apply Article III:4 or Article XI:1 should be guided by the structure,
design, and architecture of the challenged measure. While the intended use requirement imposed
in this case is an import licensing requirement, which suggests the measure is subject to
Article XI:1, if the Panel finds that a similar measure applies to Indonesia's domestic like products,
application of Article III:4 would be appropriate.
IV. Article XI:1 of the GATT 1994
7. Japan agrees with Brazil that any "prohibition" or "restriction" on importation may be
considered a violation of Article XI:1 of the GATT 1994, if that restriction could have limiting
effects on the importation of products of other Members.8 Article XI:1 does not impose a high
threshold with respect to the limiting effects that a measure must have to constitute a
"restriction." Rather, limiting effects exist when a measure narrows opportunities for importation,
thus limiting an imported product's ability to compete. 910
8. With regard to the means or features that may have "limiting effect" under Article XI:1, the
panel in Colombia – Ports of Entry explained that "a number of GATT and WTO panels have
recognized the applicability of Article XI:1 to measures which create uncertainties and affect
investment plans, restrict market access for imports or make importation prohibitively costly, all of
which have implications on the competitive situation of an importer", and that "these cases were
based on the design of the measure and its potential to adversely affect importation."11 Likewise,
in Argentina – Import Measures, the panel found the DJAI procedure (in which an importer must
file a DJAI (Advance Sworn Import Declaration) and obtain "exit" status to import goods into
Argentina) had a limiting effect because "it: (a) restrict[ed] market access for imported products
to Argentina as obtaining a DJAI in exit status is not automatic; (b) create[d] uncertainty as to
applicant's ability to import; (c) d[id] not allow companies to import as much as they desire or
need without regard to their export performance; and (d) impose[d] a significant burden on
importers that is unrelated to their normal importing activity."12 In short, prohibitions or
restrictions to imports through basically any means violate Article XI:1.13
9. The following three considerations also support a broad understanding of the concept of
"limiting effects" and accordingly of the term "restriction" in Article XI:1 of the GATT 1994:

8
Panel Report, Argentina – Import Measures, WT/DS438/444/445/R, June 26, 2014, para. 6.363.
9
E.g., Panel Report, Argentina – Hides and Leather, WT/DS155/R, February 16, 2001, para. 11.20,
Panel Report, India – Autos, WT/DS146/175/R, December 21, 2001, paras. 7.269-7.270, and Panel Report,
Dominican Republic – Import and Sale of Cigarettes, WT/DS/302/R, November 26, 2004, para. 7.261.
10
As presented in the Responses of Japan to Panel's Questions for the Third Parties Following the First
Panel Meeting, Japan considers that the EU's argument stressing a discernible quantitative dimension of a
measure puts too much weight on the quantitative aspect required for there to be a limiting effect. The EU's
argument seems to entail an additional unnecessary burden of proving "a discernible quantitative dimension of
the measure, in the form of a limiting effect on the quantity or value" for demonstrating a limiting effect under
Article XI:1 of the GATT 1994.
11
Panel Report, Colombia – Ports of Entry, WT/DS366/R, April 27, 2009, para. 7.240.
12
Panel Report, Argentina – Import Measures, para. 6.474. (emphasis added) This finding was not
reversed by the Appellate Body (see Appellate Body Report, Argentina – Import Measures, paras. 5.287-288).
13
Other examples are: the trade balancing condition as "an importer is not free to import as many
restricted kits or components as he otherwise might so long as there is a finite limit to the amount of possible
exports" (Panel Report, India – Autos, paras. 7.320-7.322.); and all of (i) the granting of licenses on
"unspecified merits", (ii) making only government agencies eligible for licenses to import certain products, and
(iii) restricting the entities that could obtain import licenses and the purpose for which they could do so,
because they operated so that "certain imports may not be permitted" due to the product or the prospective
importer at issue. (Panel Report, India – Quantitative Restrictions, paras. 5.125, 5.129, 5.137, 5.139, 5.140
and 5.142.)
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(a) a fundamental principle of the GATT 1994 is that trade-restrictive measures other
than tariffs are prohibited unless expressly permitted under Article XI:2 or justified
by the explicit exceptions in Article XX of the GATT 1994;

(b) the measures that are excluded from the prohibition under Article XI:1 are
specifically stipulated in Article XI:1 itself ("duties, taxes or other charges") and in
Article XI:2, and thus all other measures with limiting effects were intended to be
prohibited under Article XI:1; and

(c) while application of a high threshold for the limiting effects could result in
circumvention of GATT disciplines for measures without justifiable underlying policy
objectives, it is not the case that legitimate trade-restrictions are unreasonably
prohibited by a broad understanding of the concept of limiting effects because
import restrictions which serve justifiable policy objectives could be justified under
the general exceptions provided in Article XX of the GATT 1994 and thus properly
addressed under the GATT disciplines.

V. Article XX of the GATT 1994

10. Finally, Japan invites the Panel to carefully assess Indonesia's claims under Article XX of the
GATT 1994. In particular, Indonesia's arguments under Article XX (a), (b), and (d) should be
carefully assessed as to whether the alleged objectives are specific enough, and whether the
measures are designed for and are necessary to achieve these policy objectives listed in these
provisions.
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ANNEX C-6

EXECUTIVE SUMMARY OF THE ARGUMENTS OF NEW ZEALAND

INTRODUCTION

1. Since 2009, Indonesia has enacted a series of laws and regulations that prohibit and restrict
imports of agricultural products when domestic production is deemed sufficient to satisfy domestic
demand. These instruments result in complex import licensing regimes that underpin a publicised
government strategy to reduce imports to encourage domestic agricultural production in the hope
of achieving self-sufficiency in food.

2. In New Zealand's view, Indonesia's import regime is inconsistent with core WTO obligations.
Specifically, as argued in Indonesia — Importation of Horticultural Products, Animals and Animal
Products (DS477/DS478), New Zealand considers that several elements of Indonesia's import
licensing regime for animal products (including chicken meat and chicken products) are
inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture.

I. FACTUAL BACKGROUND

3. Indonesia maintains an overarching framework of laws that underpin its import regimes for
chicken and other animal products. In particular, Law 18/2009 as amended by Law 41/2014 (the
Animal Law), Law 18/2012 (the Food Law), Law 7/2014 (the Trade Law) and Law 19/2013 (the
Farmers Law) establish a framework through which imports of animal products are prohibited
where domestic production is deemed sufficient to fulfil domestic demand. Pursuant to these laws,
Indonesia has promulgated regulations through which additional prohibitions and restrictions on
importation are made effective.

4. As described above, there is substantial overlap between the measures at issue in this dispute
and those challenged by New Zealand and the United States in DS477/DS478. 1 Specifically, the
disputes challenge Indonesia's:

a. "Positive list" prohibition on unlisted animal products, which prohibits importation of

animal products that are not listed in the relevant regulations;

b. Restrictions on use, sale and distribution of imported animal products (including

chicken meat and chicken products), which prohibit all imported animal products
from being imported for certain uses;

c. Limited application windows and validity periods for MOA Import Recommendations
and MOT Import Approvals, which provide that authorisation to import may only be
applied for during limited application windows and is only valid for limited time
periods;

d. Fixed licence terms for MOA Import Recommendations and MOT Import Approvals,
which prevent importers from importing, during a validity period, products of a
different type, in a greater quantity, from another country, or through a different
port than those specified in an MOA Import Recommendation and MOT Import
Approval;

e. Indonesia's general prohibition on certain imports which consists of the combined

interaction of several different restrictive measures that collectively prohibit or
restrict imports of animal products, including chicken meat and chicken products.
New Zealand also considers that the domestic insufficiency condition, which forms
part of the Indonesian import regime challenged by Brazil, constitutes a standalone

1
See New Zealand's request for the establishment of a panel, WT/DS477/9, circulated 24 March 2015
and the United States request for the establishment of a panel, WT/DS478/9, circulated 24 March 2015.
 WT/DS484/R/Add.1

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restriction on importation.

5. New Zealand considers that these measures constitute prohibitions and restrictions on
importation inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture.

6. New Zealand notes that Indonesia's import regulations have changed frequently in recent years.
However, many of the core trade-restrictive elements of its import regime, including those
challenged by Brazil in this dispute, have not materially changed through these various iterations
of the regulations. In light of these frequent changes to the instruments through which the
measures at issue are made effective, New Zealand considers that it is important for this Panel to
make rulings and recommendations on the measures at issue, irrespective of minor changes that
may have been made to the instruments through which these measures are made effective.

II. PROHIBITIONS AND RESTRICTIONS ON THE IMPORTATION OF ANIMAL PRODUCTS

INCLUDING CHICKEN MEAT AND CHICKEN PRODUCTS

1. Indonesia's restrictions on the importation of animal products

(a) The positive list prohibition on unlisted animal products

7. New Zealand agrees with Brazil's submission that animals and animal products that are not
listed in the Appendices of MOA 58/2015 and MOT 5/2016 are prohibited from importation. 2 In
addition to the specific HS Codes identified by Brazil in its first written submission, a number of
other animal products are also prohibited from importation through this measure. Indonesia's
regulations are clear that the carcass, meat, offal and processed products that can be imported are
limited to those that are listed in the relevant appendices to MOA 58/2015 and MOT 5/2016.
Products that are unlisted are ineligible to obtain MOA Import Recommendations and MOT Import
Approvals, both of which are pre-requisites to importation.

8. New Zealand does not consider that the positive list prohibition challenged by Brazil has been
removed by MOT 37/2016. Indeed, MOT 37/2016 expressly acknowledges that products that are
not listed must still obtain both an MOT Import Approval and an MOA Import Recommendation.
However, unlike listed products, in respect of which the process for obtaining MOT Import
Approvals and MOA Import Recommendations is set out in MOT 5/2016 and MOA 58/2015, there is
no process by which MOT Import Approvals and MOA Import Recommendations for unlisted
products can be obtained. This is because, based on New Zealand's understanding, MOA Import
Recommendations and MOT Import Approvals cannot be obtained for such products.

(b) Restrictions on use, sale and distribution of imported animal products

9. As detailed in Brazil's submission, Indonesia's regulations prohibit importation of animal

products other than for use in "hotels, restaurants, caterings, industries, and other particular
purposes". The effect of this measure is that animal products are not permitted to be imported
into Indonesia for any form of domestic use, or to be sold or distributed through consumer retail
outlets. Importantly, it precludes certain imported animal products from being imported for sale
at modern markets such as supermarkets and hypermarkets as well as traditional retail outlets.
This 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
certain animal products for domestic consumption.

10. By prohibiting importation of products for certain uses, or from being sold or distributed
through certain channels, the use and distribution restrictions have a limiting effect on the quantity
or amount of product which can be imported and therefore constitute a "restriction" within the
meaning of Article XI:1 of the GATT 1994 and a "quantitative import restriction" or "similar border
measure" within the meaning of footnote 1 to Article 4.2 of the Agreement on Agriculture.

11. New Zealand does not agree with Indonesia that Article XI:1 of the GATT 1994 and Article 4.2
of the Agreement on Agriculture "do not apply to the intended use requirement". As explained
above, Indonesia's restrictions on use, sale and distribution of imports of animals and animal

2
See Brazil's first written submission, paras. 99-103.
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products are imposed as a condition of importation at the border. Therefore, in New Zealand's
view, these are the appropriate provisions for the Panel to commence its analysis of the
consistency of the use, sale and distribution restriction.

12. However, to the extent that the use, sale and distribution restriction is considered by the Panel
to be an internal measure, New Zealand considers that it would be contrary to Article III:4 of the
GATT 1994.

(c) Limited application windows and validity periods

13. The limited application windows and validity periods for MOA Import Recommendations and
MOT Import Approvals described by Brazil restrict imports by limiting the time periods during
which exports are able to access the Indonesian market. In addition, they require importers to
determine well in advance, and then "lock in", the terms of importation (including the quantity,
products, country of origin and port of entry), thereby further limiting market access for imports.

14. The combination of the inability to import at the start of a validity period, along with the
corresponding inability to export towards the end of a validity period means there is a "dead zone"
during which products cannot be imported into Indonesia. The limited validity periods also create
uncertainty and mean that importers are unable to enter into long-term contractual obligations
with exporters, as importers cannot obtain the right to import product beyond the end of the
upcoming validity period.

15. New Zealand considers that limited application windows and validity periods have a limiting
effect on the quantity of animal products that can be imported into Indonesia. As a consequence,
the measure is contrary to Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on
Agriculture. To the extent that the Panel finds that the limited application windows and validity
periods are non-automatic licensing procedures, New Zealand considers that they are also
inconsistent with Article 3.2 of the ILA.

(d) Fixed licence terms

16. New Zealand agrees with Brazil's submission that the "fixed licence terms" constitute a
restriction on importation inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture. Fixed licence terms "lock in" key terms of importation, including the
quantity, type, country of origin and port of entry of the products that each importer may import
during the relevant validity period.

17. Fixed licence terms restrict imports by imposing quantitative limits on the amount of product
that may be imported into Indonesia during each validity period. These restrictions are imposed
through MOT Import Approvals, which specify the maximum quantity of products that may be
imported during each validity period. By imposing a limitation on the quantity of products that are
able to be imported, fixed licence terms are inconsistent with Article XI:1 of the GATT 1994 and
Article 4.2 of the Agreement on Agriculture.

2. Indonesia's general prohibition on the importation of animals and animal

products including the domestic insufficiency requirement

18. New Zealand agrees with Brazil's statement that the "combined interaction of several different
individual measures challenged in the present dispute constitute an overarching measure that is on
its own a violation of the Covered Agreements".3 In New Zealand's view, each of the individual
trade-restrictive components of Indonesia's import licensing regime for animals and animal
products constitutes an independent restriction on imports in violation of Article XI:1 of the
GATT 1994 and Article 4.2 of the Agreement on Agriculture. However, these individual restrictions
and prohibitions do not exist in a vacuum. Rather, each element of Indonesia's import licensing
regime for animals and animal products also operates in conjunction to form an overarching trade-
restrictive measure inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture.

19. New Zealand also agrees with Brazil's contention that "the individual measures at stake in the

3
Brazil's first written submission, para. 74.
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current dispute were conceived to implement an official trade policy based on the overriding
objective of restricting imports to protect domestic production". 4 This underlying objective is
reflected in multiple Indonesian laws, and permeates each individual component of Indonesia's
import licensing regime. Indonesia's laws are explicit that imports of a range of products are
prohibited when domestic production is deemed sufficient to meet domestic demand.

III. Article XX of the GATT 1994

20. Indonesia has sought to justify a number of its measures under Articles XX(a), (b) and (d) of
the GATT 1994. New Zealand does not consider that any of the measures addressed in New
Zealand's submissions in this dispute can be justified under these exceptions. In particular, New
Zealand does not consider that Indonesia has demonstrated that the measures at issue are
"necessary" to achieve the objectives specified by Indonesia in accordance with the relevant legal
standards. New Zealand also considers that Indonesia has failed to demonstrate that its measures
satisfy the chapeau to Article XX. New Zealand specifically comments on certain aspects of three
measures in respect of which Indonesia has invoked Article XX defences.

1. The positive list is not justified under Article XX of the GATT 1994

21. New Zealand considers that Indonesia has failed to demonstrate that the positive list is
justified under Article XX(d) on the basis that it is necessary to secure compliance with "laws and
regulations dealing with halal requirements … deceptive practices ... and customs enforcement
relating to halal".5

22. New Zealand respects Indonesia's commitment to protect the right of its people to consume
halal food. New Zealand emphasises, however, that the positive list does not determine an animal
product's eligibility for importation based on its halal status. Rather, the positive list prohibits
certain products irrespective of whether they conform to Indonesia's halal requirements.
Accordingly, even if a product is certified as conforming to Indonesia's halal requirements, if it is
not listed in the appendices to both MOA 58/2015 and MOT 5/2016, it is prohibited from
importation.6

23. New Zealand also emphasises the trade-restrictiveness of the measure - the positive list
constitutes a complete prohibition on importation of certain products. There are clearly less trade
restrictive measures available which would enable Indonesia's objectives to be satisfied, such as
the existing requirement in Indonesia's laws for imports to have "rightful certificate" certifying that
the products satisfy its halal standards.

2. The intended use requirement is not justified under Article XX of the GATT 1994

24. In New Zealand's view, Indonesia has failed to demonstrate that the intended use requirement
is justified under Articles XX(b) and (d) of the GATT 1994. New Zealand considers that the
evidence before the Panel supports a conclusion that the measure is both unnecessary to achieve
the objective of protecting human life or health or to secure compliance with laws and regulations
regarding public health, deceptive practices and customs enforcement.

25. New Zealand notes that the intended use requirement prevents the sale of all imported meat
products in traditional markets, but does not appear to impose any comparable restrictions on the
sale of domestically-produced products in these markets. New Zealand also emphasises that the
substantial restrictiveness of the intended use requirement must be taken into account. The
intended use requirement is highly restrictive and prevents imported animal products from
reaching the majority of retail consumers in Indonesia.

3. Limited application and validity periods and fixed licence terms are not justified
under Article XX of the GATT 1994

26. New Zealand considers that Indonesia has failed to demonstrate why limited application and
validity periods and fixed licence terms are necessary for the objectives it specifies under
Article XX(d) of the GATT 1994. New Zealand agrees that Indonesia has the right to take measures

4
Brazil's first written submission, para. 75.
5
Indonesia's first written submission, paras. 229 - 234.
6
See Brazil's first written submission, paras. 99 - 101.
 WT/DS484/R/Add.1

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necessary to secure compliance with halal, food safety and customs laws. New Zealand does not
agree that limiting the periods during which import licences can be obtained, and limiting the
validity period of such licences, contribute towards, or is necessary for, the achievement of those
objectives.

IV. LEGAL ISSUES RAISED IN INDONESIA'S FIRST WRITTEN SUBMISSION

1. Relationship between Article XI:1 of the GATT 1994 and Article 4.2 of the
Agreement on Agriculture

27. Indonesia contends that there is a "conflict" between Article XI:1 of the GATT 1994 and
Article 4.2 of the Agreement on Agriculture which renders Article XI:1 "not applicable law in the
present dispute".7 New Zealand disagrees with this proposition.

28. New Zealand notes that a number of disputes have considered claims made by Members under
both Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture. In none of
those disputes have panels found a conflict between these two articles.8 New Zealand considers
Indonesia's suggestion of a conflict between these provisions an untenable interpretation that is
not supported by the text of the provisions or extensive WTO jurisprudence.

29. Second, there is no "conflict" as New Zealand disagrees with Indonesia's contention that the
legal standard under Article 4.2 of the Agreement on Agriculture places the burden on a
complainant to establish that a measure is not maintained under a non-agriculture specific
provision of the GATT 1994.

30. Furthermore, simply because the Agreement on Agriculture applies only to agricultural
products and the GATT 1994 applies to all products (including agricultural products), this does not
automatically render Article 4.2 of the Agreement on Agriculture the more specific provision in
respect of import restrictions such as those at issue in the present dispute.

2. Relationship between Article 4.2 of the Agreement on Agriculture and Article XX

of the GATT 1994

31. New Zealand does not agree with Indonesia's contention that a complainant has the burden of
establishing that a measure is not maintained under general, non-agriculture-specific provisions of
GATT 1994 or of the other Multilateral Trade Agreements in Annex 1A to the WTO Agreement.
New Zealand considers that this novel argument is flawed. According to Indonesia, in order to
demonstrate a violation of Article 4.2 of the Agreement on Agriculture, a complainant would not
only have to demonstrate a prima facie violation of Article 4.2, but it would also have to posit and
rebut possible defences under Article XX that a respondent might raise.

32. There is no justification for shifting the well-established principle that a respondent bears the
burden of demonstrating that a measure can be justified under Article XX. It would be
contradictory if the same provision were an exception to Article XI:1 of the GATT 1994 and not an
exception to the obligation under Article 4.2 of the Agreement on Agriculture. The character of the
Article XX defences is as an exception and such character should be maintained.

7
Indonesia's first written submission, para. 74.
8
See for example: Panel Report, Korea- Various Measures on Beef, paras. 762 and 768. Panel Report,
India - Quantitative Restrictions, para. 5.242; Panel Report, US - Poultry (China), paras. 7.484 - 7.487.
 WT/DS484/R/Add.1

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ANNEX C-7

EXECUTIVE SUMMARY OF THE ARGUMENTS OF NORWAY

I. THE APPLICABILITY OF BOTH THE GATT 1994 ARTICLE XI:1 AND ARTICLE 4.2 OF
THE AGREEMENT ON AGRICULTURE WITH REGARD TO THE SAME MEASURE

1. In its first written submission, Indonesia claims that the same aspects of the same measure
may not be challenged under both the GATT 1994 Article XI:1 and Article 4.2 of the Agreement on
Agriculture, as these provisions have different legal standards.1 According to Indonesia, "by virtue
of Article 21.1 of the Agreement on Agriculture, Article 4.2 applies to measures challenged by
Brazil to the exclusion of Article XI:1 of the GATT 1994".2

2. Norway is puzzled by this argument. Like Australia argues in its third party submission,
Norway asserts that Indonesia's claim lacks support in WTO jurisprudence, as it is clear that a
measure can constitute a violation of both Article XI:1 of the GATT 1994 as well as of Article 4.2 of
the Agreement on Agriculture. 3

II. WHETHER LIMITED (AND SHORT) APPLICATION PERIODS AND VALIDITY PERIODS
OF THE MINISTRY OF AGRICULTURE'S IMPORT RECOMMENDATION AND MINISTRY
OF TRADE'S IMPORT APPROVAL AS WELL AS FIXED LICENSE TERMS CONSTITUTE
RESTRICTIONS ON IMPORTS.

3. Brazil argues in its first written submission that Indonesia's import licencing procedures
constitute a "restriction" on importation in violation of the GATT 1994 Article XI:1 as well as the
Agreement on Agriculture Article 4.2. According to Brazil, this is in particular due to; (i) the
prohibition of applying for licences for the importation of chicken cuts and other prepared or
preserved chicken meat due to their exclusion from the "positive lists" of the products allowed to
be imported; (ii) the requirements related to the intended uses of imported chicken meat and
chicken products; (iii) the limited (and short) application periods and validity periods of the
MoA Import Recommendation and MoT Import Approvals; and (iv) the fixed licence terms.4 Norway
wishes to offer its observations on the latter two elements.

4. Indonesia asserts that "[t]he mere fact that importers must reapply periodically for the new
Import Recommendation and the Import Approval does not, in and of itself, mean that the
measure at issue is a quantitative restriction".5 Norway agrees that the covered agreements do not
oblige Members to apply automatic import licencing. However, if the application windows and the
validity periods are limited to the extent that they create obstacles which have a "limiting effect"
on trade, they will also constitute a restriction which fall under the scope of both Article XI:1 of the
GATT 1994 and Footnote 1 of Article 4.2 of the Agreement on Agriculture.

5. As regards the fixed licence terms, Indonesia holds that "importers determine their own
terms of importation" according to this requirement, which in turn does not have any limiting
effect on imports. Indonesia refers to the fact that "the terms of import licenses – including the
type, quantity, country of origin, and port of entry – are at the complete discretion of the
importers themselves". Hence, Indonesia argues that "[t]he terms of importation listed on import
license applications are, therefore, not measures that are ‘instituted or maintained' by Indonesia.
They fall outside the scope of Article 4.2, as they are determined by private parties". 6 We assume
that Indonesia would use the same argument with regard to scope of Article XI:1 of the
GATT 1994.

1
Indonesia's First Written Submission, paras. 65-74.
2
Indonesia's First Written Submission, para. 74.
3
Australia's Third Party Submission, para. 30, referring to Panel Report, Korea – Various Measures on
Beef, para. 762 and Panel Report, India – Quantitative Restrictions, paras. 5.241-5.242.
4
Brazil's First Written Submission, para. 200.
5
Indonesia's First Written Submission, para. 257.
6
Indonesia's First Written Submission, para. 262.
 WT/DS484/R/Add.1

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6. Indonesia's argument appears to rely on the fact that the regime provides that importers
initially define the terms by setting out in their import licence applications the specific type of
products to be imported, quantity, the country of origin of the products, and the port of entry
through which the products will enter Indonesia. However, Indonesia here fails to point to the
measure at issue, as it is the fact that the licence term, once defined by the importers, are fixed,
and may not be altered during a term that constitutes the restriction.

7. Previous panels have found that measures imposing the same kind of limits as those found
in Indonesia's import regime violate GATT 1994 Article XI:1. For instance, the panel in Colombia -
Ports of Entry concluded that restrictions limiting imports from Panama to two ports of entry in
Colombia limit "competitive opportunities", and consequently had a limiting effect on imports
arriving from Panama contrary to Article XI:1.7 Furthermore, in India – Autos, the panel found that
a measure which in reality has the consequence that an importer would not be "free to import [as
much] as he otherwise might" constituted a restriction.8 Hence, Norway agrees with Brazil that the
fact that the importers are prevented from responding to changes in market conditions will have a
limiting effect on trade. Moreover, Norway notes that importers may experience a need to respond
to other factors that normally affect importation during the validity periods, as well as taking into
consideration factors related to importation that they did not predict at the start of the validity
period. Being prevented from doing this can restrict the volume of imports. The measure
challenged is therefore not the terms of importation as they are determined by private parties, as
put by Indonesia,9 but rather the measure limiting what importers may import.

8. The importers being "free to alter their terms of importation from one license application to
the next"10 does not change the fact that this limitation has a limiting effect in a set term.
Moreover, one must also bear in mind that import opportunities as regards availability of products
etc. may change from one term to another. It is not given that what a company has the "desire
and ability to export"11 at one point in time would also be desired and available months later.

III. THE TERM "RESTRICTION" IN ARTICLE XI:1 OF THE GATT 1994

9. It is clear from WTO jurisprudence that the term "restriction" in the GATT 1994 Article XI:1
should be interpreted as something that has a "limiting effect".12 In establishing this, the Appellate
Body has stated this can be "demonstrated through the design, architecture, and revealing
structure of the measure at issue".13 In Norway's view, the Panel in this dispute should not deviate
from this test. We are not convinced that "discernible quantitative dimension", as suggested by the
European Union, would be a correct expression of this test.

7
Panel Report, Colombia - Ports of Entry, para. 7.274.
8
Panel Report, India – Autos, para. 7.320.
9
Indonesia's First Written Submission, para. 262.
10
Indonesia's First Written Submission, para. 263.
11
Panel Report, India – Autos, para. 7.268.
12
See, e.g. Appellate Body Reports, China - Raw Materials, para. 319; Argentina - Import Measures,
para. 5.217.
13
Ibid.
 WT/DS484/R/Add.1

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ANNEX C-8

EXECUTIVE SUMMARY OF THE ARGUMENTS OF PARAGUAY*

1. Mr. Chairman and distinguished Members of the Panel, Paraguay would like to thank the
Panel and the Secretariat for their work in this dispute and for the opportunity to present our
views today.

2. Paraguay is a third party in these proceedings, mainly because of our systemic interest in
the interpretation of the WTO Agreements. We would like to stress the importance that this matter
reverts for landlocked developing countries, like ours.

3. In that context, we would like to underscore the key role that Article XI of the GATT 1994
plays for the multilateral trading system, as it establishes a general prohibition on the use of
quantitative restrictions. Similar measures generate losses, and thus, have distortive effects for
international trade. Often, they create systems that are not transparent and increase the trade
costs for exporters and importers, especially from developing countries.

4. With regard to the interpretation and application of Article XI of the GATT, the WTO
jurisprudence has set certain parameters that we would like to recall in our brief statement. First
and foremost, the scope of this provision has repeatedly been understood in a wide manner.
Indeed, the broad scope of the term "restriction" has been reaffirmed in the GATT and the WTO
jurisprudence. It is also clear from previous cases that not only de jure, but also de facto
restrictive measures are covered by this provision.

5. We would also like to stress the standard of review. Complainants are not required to
demonstrate trade effects attributable to the challenged measure. Panels have repeatedly stated
that GATT Article XI reflects the obligation to safeguard the competitive opportunities for imported
products, and, consequently, all complainants need to show is that a measure operates as a
quantitative restriction without incurring the additional obligation to also show that the measure at
hand is responsible for the reduced volume of trade.

6. It follows that panels dealing with GATT Article XI must focus their work on the design,
structure and architecture of the challenged measures, and inquire into whether they may affect
the importation of products by restricting market access. This could be the outcome of, for
example, increased trade costs, as a result of the adoption of more complicated procedures.

7. Finally, we would like to refer to the panel’s letter of 3 June 2016 regarding Oman and
Qatar’s request to participate as third parties in this dispute. Paraguay welcomes the panel’s
decision, and the consideration given to the experience that these WTO Members have in dispute
settlement cases.

8. As noted by the panel, the DSU allows the WTO adjudicating bodies to exercise a certain
margin of discretion when dealing with issues, that have not been explicitly addressed in the body
of the DSU. When doing so nevertheless, panels and the Appellate Body must always observe due
process. In this specific case, we agree with the panel that that due process rights of the parties
have not been affected, and we are of the opinion that this type of deliberations will help those
WTO Members, that have limited experience in dispute settlement, in better understanding the
rules and procedures.

9. With that, we conclude our statement and thank the panel for its attention.

*
Paraguay has requested that it's oral statement serves as executive summary.
 WT/DS484/R/Add.1

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ANNEX C-9

EXECUTIVE SUMMARY OF THE ARGUMENTS OF QATAR*

I. INTRODUCTION

1. Mr. Chairman and distinguished Members of the Panel, the State of Qatar appreciates this
opportunity to appear before you today as a third party to the dispute Indonesia – Measures
Concerning the Importation of Chicken Meat and Chicken Products (DS484). Qatar is of the view
that the Panel's resolution of the dispute should be, first and foremost, respectful of the religious
and moral choices of each Member. Qatar will thus limit its intervention to the important
questions relating to the halal-labelling obligations imposed by Indonesia.

2. Brazil claims that the halal-labelling requirements violate the National Treatment obligation
of GATT Article III:4 because Indonesia accords to imported chicken meat and chicken products
treatment less favorable with respect to the implementation and enforcement of its halal
requirements as it does to like domestic products.

3. Indonesia argues that there is no violation of the National Treatment obligation because (1)
imported "chilled" or "frozen" chicken products are not "like" domestic "fresh" chicken as
predominantly sold in the wet markets and (2) the treatment accorded to imported products is no
less favorable when compared with like domestic products, as soon as the entire regulatory regime
applicable to domestic products is appropriately taken into account. In addition, Indonesia argues
that the halal-labelling requirements do not and cannot apply to fresh chicken but apply only to
packaged, chilled or frozen chicken, whether domestically produced or imported.

4. Furthermore, Indonesia argues that any violation is in any case justified under the General
Exceptions of GATT Article XX a) and d), given that the halal requirements are necessary to
protect public morals and necessary to secure the enforcement of domestic laws that are not
otherwise WTO inconsistent.

5. Qatar would like to take this opportunity to address a few systemic considerations raised by
Brazil's challenge in this particular case.

6. First, it should be entirely within the discretion of each Member to impose product-related
requirements that are necessary to ensure respect for the religious considerations and preferences
of each Member. Religious requirements are part of public morals and should not be set aside or
challenged based on economic or trade-related considerations. In EC – Seal Products, the
Appellate Body acknowledged that "Members should be given some scope to define and apply for
themselves the concept of public morals according to their own systems and scales of values."1
Qatar considers that this acknowledgement must be given meaning, not only in the specific
context of a defense under GATT Article XX but also when examining the consistency of measures
with a Member's basic WTO obligations. One must be careful not to confuse permissible measures
adopted for religious reasons with impermissible measures imposed so as to afford protection to
domestic products.

7. Second, Brazil confirms that it is not challenging the halal requirements as such but only
their practical application by Indonesia. In particular, as noted by Indonesia, Brazil has recognized
that it "takes no issue with regard to the fulfillment of the halal certification and labelling, as
required by the Indonesian legislation."2 However, Qatar is of the view that a panel should pay
particular attention in the context of a "de facto" challenge of this kind to avoid a false positive. A
"de facto" claim of violation arguably concerns only the application and implementation of the
requirement in question. But the distinction between application, implementation and enforcement

*
Qatar has requested that it's oral statement serves as executive summary.
1
Appellate Body Report, EC – Seals Products, para. 5.199.
2
Indonesia’s first written submission, para. 352 referring to Brazil’s first written submission, para. 139.
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of a requirement based on religion and public morals would be difficult and could easily become in
fact a challenge of the requirement itself.

8. Third, Qatar considers that an important distinction must be made between products
produced in a manner respectful of religious considerations and requirements in the country that
imposes such requirements, on the one hand, and products imported from a country where these
religious considerations and requirements are not applicable. For example, respect for halal-
related requirements is part and parcel of Muslim countries' culture, thus justifying perhaps less
need for additional inspection and verification of products produced domestically. The fact that
stringent requirements relating to inspection and verification apply in particular to imported
products from non-Muslim countries is thus not a protectionist measure but simply a reflection of
this religious reality. Although it may not be necessary to demonstrate that the measure is driven
by protectionist intentions, the complete absence of any evidence suggesting that a measure on its
face is origin neutral nevertheless violates the National Treatment obligation and in Qatar's view it
must play an important role in the context of the Panel's examination.

9. Fourth, and related to the above points, the mere fact that there are certain differences in
the manner in which domestic and imported products are treated should not lead to the immediate
conclusion that less favorable treatment is accorded. It must be demonstrated that the measure
in question has adversely affected the conditions of competition for imported products. Qatar
would like to suggest that the Panel closely examines the arguments and evidence cited by Brazil
in support of its claim of less favorable treatment, with particular attention to the specific
circumstances of the Indonesian market.

II. CONCLUSION

10. This dispute raises a number of very important and systemic issues that concern the
essence of the freedom to regulate for religious reasons.

11. The key question when it comes to Brazil's challenge of Indonesia's halal requirements and
their application in practice, is whether it has been demonstrated that these measures were
imposed and applied so as to afford protection or whether the practical differences between
domestic and imported products explain any differences in the treatment of these products. It
needs to be examined whether the conditions of competition have been distorted so as to afford
protection to domestic products.

12. Public morals and religious requirements are not merely relevant considerations to justify a
violation. In Qatar's view, they also play an important role when examining whether a violation
exists in the first place. In addition, when examining whether a violation can be justified for
reasons related to religion and public morals, Qatar considers that considerable deference should
be given to Members. It is our view that it should be the prerogative of each member to regulate
on the basis of public morals and extensive latitude should be allocated to their right to do so.

13. Thank you.

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ANNEX C-10

EXECUTIVE SUMMARY OF THE ARGUMENTS OF THE UNITED STATES

I. INDONESIA'S IMPORT LICENSING MEASURES ARE INCONSISTENT WITH ARTICLE XI:1 OF THE
GATT 1994 AND ARTICLE 4.2 OF THE AGREEMENT ON AGRICULTURE

1. Indonesia's import licensing regime for animals and animal products imposes impermissible
"restrictions" and "prohibitions" within the meaning of Article XI:1 of the GATT 1994. "Restriction,"
as used in Article XI:1, refers to "[a] thing which restricts someone or something, a limitation on
action, a limiting condition or regulation," i.e., "to something that has a limiting effect."
"Prohibition" refers to a "legal ban on the trade or importation of a specified commodity." Thus,
Article XI:1 establishes a "general ban on import or export restrictions or prohibitions" other than
duties, taxes, or other charges. Article XI:1 does not require a complaining party to demonstrate
quantitatively that a measure has adversely impacted the overall volume of imports. The
Appellate Body affirmed this interpretation in Argentina – Import Measures, finding that a
measure's limitation on action or limiting condition on importation "need not be demonstrated by
quantifying the effects of the measure at issue; rather, such limiting effect can be demonstrated
through the design, architecture, and revealing structure of the measure at issue considered in its
relevant context."

2. Indonesian regulation MOT 46/2013, as amended, and MOA 139/2014, as amended, list all
the types of animals and animal products "that can be imported" into Indonesia. 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). 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 importers are prohibited from importing animals and animal
products not specified on a valid Recommendation and Import Approval. Indonesia's positive list
of animals and animal products that can be imported, and its consequent ban on importation of
any products not included on that list, thus constitutes a "prohibition" in breach of Article XI:1 of
the GATT 1994.

3. Indonesia also requires, as a condition for importation, that animals and animal products be
imported only for certain specific uses. This restriction varies in scope depending on the product
at issue, but 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. Specifically,
importers of the animal products listed in Appendix II to MOT 46/2013 and MOA 139/2014 (non-
bovine animals, meat, and offal) are only eligible to obtain a Recommendation from the Ministry of
Agriculture if they indicate on their application a permitted use, including sale in manufacturing,
hotels, restaurants, catering, or other limited purposes, or for sale in modern markets (i.e.,
supermarkets and convenience stores, but not in traditional markets). Thus, Indonesia
impermissibly precludes importers from importing non-bovine animals, meat, and offal for
commercially important purposes. The use requirements are, therefore, a limitation on action or
limiting condition on importation constituting a "restriction" in breach of Article XI:1.

4. Next, Indonesia's application window and validity period requirements create a period of
several weeks at the end of one validity period and the beginning of another during which products
cannot be exported to Indonesia. Specifically, Import Approvals are issued four times a year for a
single three-month validity period and can be applied for only during the month preceding the
start of a period; they cannot be submitted in advance. Further, Import Approvals are not issued
until after the import period has begun, and exporters cannot ship until they receive the approval.
Moreover, all animals and animal products imported during a validity period must arrive in
Indonesia and clear customs prior to the end of the period. This means that exporters must stop
accepting orders and shipping to Indonesia up to several weeks before the end of the period,
depending on the time it takes to transport products to a port, ship them to Indonesia, and clear
customs. Consequently, depending on their origin, there is a window of time of up to several
weeks at the end of each period when Indonesian importers seeking to import animals or animal
products are precluded from doing so due to the structure of the application window and validity
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period requirements. These requirements are a limitation on action or limiting condition on

importation, and therefore constitute a "restriction" in breach of Article XI:1 of the GATT 1994.

5. Indonesia also 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. Importation of any animals and animal products without
permits covering their type, quantity, country of origin, and port of entry is prohibited. But once
an import period begins, importers cannot apply for new permits to import different or additional
products, or for products shipping from, or into, a new location. Thus imports are strictly limited
to the products specified on outstanding permits. Importers that do not comply with this
requirement are subject to sanctions, including revocation of their Recommendations and
ineligibility for future Recommendations and revocation of their Import Approvals, and any goods
not in compliance with the requirement will be re-exported at the importer's expense. Once a
period begins, therefore, importers cannot make changes based on market or other developments
that may be necessary to meet current demand, whether because certain products are no longer
needed, because new or additional products are needed due to the unavailability or insufficiency of
the original orders, or even due to changed circumstances regarding the importer itself. The type,
quantity, country of origin, and port of entry requirement imposed through Recommendations and
Import Approvals is, therefore, a limitation on action or limiting condition on importation, and thus
constitutes a "restriction" within the meaning of Article XI:1.

6. Finally, Indonesia's domestic insufficiency requirement explicitly places a limiting condition

on imports by conditioning all importation of animals and animal products on the insufficiency of
domestic products to meet Indonesian consumers' needs. The requirement thus severely limits
the opportunities for importation, in that imported products are given market access only if, and to
the extent that, domestic supply is deemed insufficient to satisfy domestic needs. The lack of
transparency and predictability in the implementation of the domestic insufficiency requirement
itself has an additional limiting effect on imports. Therefore, the requirement is a "restriction"
within the meaning of Article XI:1 of the GATT 1994.

7. For the same reasons these measures breach Article XI:1 of the GATT 1994, they also
breach Article 4.2 of the Agreement on Agriculture.

8. Indonesia's import licensing restrictions for animals and animal products are "measures of
the kind which have been required to be converted into ordinary customs duties" within the
meaning of Article 4.2 of the Agreement on Agriculture. Footnote 1 to Article 4.2 provides that
such measures include, inter alia, "quantitative import restrictions," "minimum import prices," and
"similar border measures" other than ordinary customs duties. Where a measure constitutes a
"prohibition or restriction" (other than duties, taxes or other charges) in breach of Article XI:1 of
the GATT 1994, that measure also would run afoul of the prohibition in Article 4.2 on Members
maintaining agricultural measures of the kind listed in footnote 1. The United States considers
that Indonesia's import licensing measures therefore breach Article 4.2 for the same reasons they
breach Article XI:1 of the GATT 1994. When a measure concerning agricultural products has been
found inconsistent with Article XI:1 of the GATT 1994, previous panels have found that the
measure would also be inconsistent with Article 4.2 of the Agreement on Agriculture.

II. A COMPLAINANT NEED NOT SHOW THAT A MEASURE DOES NOT FALL WITHIN AN ARTICLE XX
EXCEPTION TO DEMONSTRATE A BREACH UNDER ARTICLE 4.2

9. Footnote 1 of Article 4.2 of the Agreement on Agriculture provides that the scope of
Article 4.2 does not extend to measures maintained under "general, non-agriculture-specific
provisions of the GATT 1994," which include Article XX. Indonesia asserts that to make a prima
facie case that a challenged measure is inconsistent with Article 4.2, the complainant bears the
burden to show that a measure does not fall within one of the exceptions of Article XX.

10. In the United States' view, adopting Indonesia's interpretation would render a successful
Article 4.2 claim nearly impossible. Taking Indonesia's interpretation to its logical conclusion
means that a complainant must present arguments and evidence to prove a negative; that is,
none of the measures at issue are maintained under the ten sub-articles of Article XX or under
other general, non-agricultural-specific provisions of the GATT 1994 or of the other WTO
multilateral trade agreements. Indeed, Indonesia has not cited to any previous panel or
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Appellate Body reports that found that the complainant must prove that a measure is not
maintained under Article XX or any other WTO provision in its Article 4.2 prima facie case. In fact,
the panel in India –Quantitative Restrictions indicated that it is the respondent who must prove
that the exceptions in footnote 1 apply. Such an interpretation is also consistent with previous
panel and Appellate Body findings indicating more generally that the party that invokes a
justification under Article XX of the GATT 1994 bears the burden to demonstrate that the
inconsistent measures come within its scope.

11. In any event, the United States notes that the Panel need not reach Indonesia's novel legal
interpretations, because Brazil has raised claims under both Article XI:1 of the GATT 1994 and
Article 4.2 of the Agreement on Agriculture. If the Panel begins its analysis with Article XI:1,
followed by an examination of Indonesia's defenses under Article XX, and if the Panel were to find
that each measure breaches Article XI:1 and that Indonesia has made out an affirmative defense
for any measure, then the Panel would not need to reach the issue raised by Indonesia under
footnote 1 to Article 4.2 at all because that provision would not apply.

III. INDONESIA'S REQUEST FOR A PRELIMINARY RULING

12. A close examination of the panel request suggests that Brazil has presented its claim against
Indonesia's "general prohibition" in a manner consistent with Article 6.2 of the DSU. In section I
of its panel request, Brazil identified a single measure consisting of seven components, each
described narratively in detail. Brazil went on to list the five legal instruments through which the
single measure is maintained below the narrative description. Finally, Brazil listed 15 provisions of
the WTO agreements with which it considered the single measure to be inconsistent, including the
aspect of each of those provisions Brazil was invoking. That is, the single measure was identified
and then connected with each of the WTO provisions with which Brazil claimed that measure to be
WTO inconsistent. Thus, Brazil has sufficiently identified the single measure and the legal bases
for its claims to bring the matter within the Panel's terms of reference.

13. Questions of whether Brazil has demonstrated that such a measure exists in Indonesia, or
whether the identified measure breaches any of the 15 WTO provisions, are substantive issues to
be resolved by the Panel on the merits. Identification of the objective of a measure also is not
required for purposes of Article 6.2. To the extent the objective of a measure is relevant to the
ultimate resolution of a substantive claim, that issue would be resolved by the panel on the merits.

EXECUTIVE SUMMARY OF US THIRD PARTY ORAL STATEMENT

IV. INDONESIA'S DEFENSES UNDER GATT ARTICLE XX

14. Indonesia first seeks to justify its intended use requirement under Article XX(b) by arguing
that it is necessary to protect human life or health. Setting aside the second step of showing
compliance with the chapeau to Article XX, to make out preliminarily a defense under
Article XX(b), Indonesia must show that two elements of its text are met: (1) that the challenged
measure's objective is "to protect human, animal or plant life or health" and (2) that the measure
is "necessary" to the achievement of its objective. In the context of an exception for a measure
that would otherwise be WTO-inconsistent, a measure may be viewed as "necessary" when it is
indispensable, or nearly so.

15. Indonesia specifically asserts that the intended use requirement prevents food spoilage and
protects the public health by "ensur[ing] that frozen products are not sold in markets without a
proper cold chain." However, Indonesia has offered no evidence – from either the text, structure,
or the legislative history of the Ministry of Agriculture and the Ministry of Trade regulations – to
show that food safety is, in fact, the objective (or one of the objectives) in pursuit of which the
intended use requirements were imposed. Therefore, there would not appear to be an evidentiary
basis for the Panel to find that the first element of the Article XX(b) defense has been met. With
respect to the "necessary" element, Indonesia has also failed to show how prohibiting the
importation of non-beef animal products, including poultry meat and products, for sale in
traditional markets contributes to the objective of food safety. Specifically, the intended use
requirement in the MOA Regulation at issue only prohibits the sale of imported frozen meat in
traditional markets; it does not address the sale of domestic frozen meat at all.
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16. In addition to Article XX(b), Indonesia also attempts to justify the intended use requirement
under Article XX(d), arguing that it is necessary to secure compliance with Indonesia's laws on
food safety and consumer protection, in particular Law 18/2009 on Animals and Law 8/1999 on
Consumer Protection. Although the MOT and MOA regulations "noted" Law 18/2009 and
Law 8/1999 in their preambulatory sections, there is no support in the text, structure, or the
legislative history of legal instruments that shows that the intended use requirement was designed
to secure compliance with the food safety and consumer protection provisions cited by Indonesia.

17. More importantly, Indonesia has failed to show that the intended use requirement is
necessary to secure compliance with the legal provisions it identified. With respect to the food
safety laws, Indonesia has not explained how barring the importation of poultry products for sale
at traditional markets contributes to securing compliance with Articles 58 and 59 of Law 18/2009,
which relate to the requirement on the government to regulate animal products for food safety
within its authority and the requirement for importers to obtain import permits. And with respect
to compliance with the consumer protection law, Indonesia argues that the intended use
requirement prevents vendors in traditional markets from selling thawed frozen meat as fresh
meat. However, as discussed above, the intended use requirement does not address domestic
frozen meat at all, making any contribution to securing compliance with consumer deception
provisions negligible.

18. Indonesia also asserts that its positive list requirement, which prohibits the importation of
any product not listed in its regulations, is justified under Article XX(d), because it is designed –
and necessary – to secure compliance with its laws on halal as well as consumer protection and
customs enforcement laws related to halal. Again, however, Indonesia has failed to sufficiently
support its defense. The entirety of its argument consists of (1) listing the provisions regarding
veterinary certificates, halal certification, and the requirement to provide truthful product
information, and (2) concluding that it can be "hardly disputed" that the positive list requirement is
designed to secure compliance with those laws. Indonesia has offered only its own characterization
of the objective, without evidence or even argumentation in support; this is insufficient to meet its
burden under the first element of the Article XX(d) test.

19. With respect to the first element, Indonesia provides no evidence or explanation to show
that the positive list is designed to secure compliance with halal and related laws. Even aside from
Indonesia's failure to establish the first element, however, Indonesia cannot demonstrate that the
positive list is necessary to secure compliance with its law on halal and consumer protection and
customs enforcement laws related to halal, because the positive list simply bans the importation of
any poultry meat and poultry products not listed in the import licensing regulations, regardless of
whether they comply with Indonesia's halal requirements.

20. In seeking to justify the limited application window and validity periods and the fixed license
term requirements under Article XX(d), Indonesia appears to have adopted the same approach it
took with respect to the positive list requirement. That is, it lists a myriad of food safety, halal, and
consumer protection laws, and concludes summarily that "it can hardly be disputed" that its import
licensing measures are designed to secure compliance with those provisions. Again, Indonesia has
not offered any evidence or explanation from the text, structure, or legislative history on whether
or how these two measures are designed to secure compliance with halal and other legal
requirements. Such a showing is clearly insufficient to succeed under the first element of
Article XX(d).

21. Indonesia also has failed to explain sufficiently how the limited application window and
validity periods and the fixed license term requirements are necessary to secure compliance with
the food safety, halal, and consumer protection provisions it has identified. Instead, Indonesia
asserts that these requirements "enable[] government officials to monitor foreign trade" by
making the importers reapply for permits periodically. As examples, Indonesia argues that these
requirements address the problems of "overstatement of anticipated import volume" and customs
enforcement at the various ports of entry. None of these arguments and examples relate to the
food safety, halal, and consumer protection provisions that Indonesia cited.
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V. THE LEGAL STANDARDS REGARDING BRAZIL'S "GENERAL PROHIBITION" CLAIM

22. The United States would also like to offer initial views on Brazil's identification of a "general
prohibition" in Indonesia on the importation of poultry meat and poultry products, as well as the
legal standards applicable to Brazil's demonstration of the existence of such a measure.

23. First, with respect to identification, the DSU does not specify in detail the types of measures
that complainants may identify in a panel request. The DSU requires that the measure be "taken
by another Member" and suggests that a measure would normally be capable of "impair[ing]"
"benefits accruing to it directly or indirectly under the covered agreements" and would normally be
capable of being withdrawn in the absence of a mutually agreed solution. Once the complainant
identifies a specific measure in the panel request, this measure forms part of the "matter" referred
to the Dispute Settlement Body under Article 7.1 of the DSU and that the DSB tasks the panel with
examining to assist the DSB in carrying out its responsibilities under the DSU.

24. Second, with respect to proving the existence of the challenged measure, the United States
recalls that the burden is on the complainant to demonstrate the existence of a measure. This
requirement on the complainant is the same whether the measure is written or unwritten. Due to
the nature of an unwritten measure, however, a larger volume of evidence may be required to
prove the existence of an unwritten measure while a written measure may often be identified
solely by reference to its publication.

25. In Argentina – Import Measures, the Appellate Body found that a panel should look to "the
specific measure challenged and how it is described and characterized by a complainant" to
determine "the kind of evidence it is required to submit and the elements it must prove to
establish the existence of the measures challenged." The Appellate Body further noted that, in a
dispute in which the complainant has characterized the measure as a single, unwritten measure
composed of different instruments, the complainant may need to "provide evidence of how
different components operate together as part of a single measure and how a single measure
exists as distinct from its components."

26. Therefore, the Panel may find that the "general prohibition" challenged by Brazil exists if
Brazil brings forward evidence that such a prohibition exists "as distinct from" the individual
measures constituting that prohibition, as identified by Brazil in its panel request.

__________