Import bans

7.341. The Panel recalls that for Pacific cod and Alaska pollock, Japan has not established that similar conditions existed when Korea adopted the product-specific import bans on these products in 2012. However, the Panel also recalls that Korea relied on Japan's assessment of the risk posed from consumption of Alaska pollock and Pacific cod from the five Japanese prefectures in adopting import bans on these products. Between October 2012 and February 2015, Japan lifted its restrictions on both species pursuant to its internal guidelines.¹¹¹³ Nevertheless, as already noted, Korea continues to maintain its own bans and has not reviewed them as of the date of establishment of the Panel.¹¹¹⁴ Indeed, instead of reviewing the product-specific bans with an eye to removing them, in September 2013, Korea expanded its import bans to cover all fishery products from eight Japanese prefectures.¹¹¹⁵ Korea acknowledges that it has not completed a risk assessment with respect to that measure.¹¹¹⁶Korea argues it was reviewing the measure, but the Panel notes that such review has not been concluded.¹¹¹⁷ The Panel has already found that there was sufficient scientific evidence at the time to conduct a risk assessment of the measures and that there were similar conditions with respect to all 28 fishery products covered by Japan's

1107 Appellate Body Report, Australia – Salmon, para. 165.

1108 Panel Report, US – Animals, para. 7.585.

1109 Panel Reports, EC – Hormones (Canada), para. 8.99; and EC – Hormones (US), para. 8.96.

1110 CODEX STAN 193-1995, (Exhibit JPN-32), p. 52.

1111 Korea's opening statement at the second meeting of the Panel, para. 67.

1112 Appellate Body Report, India – Agricultural Products, para. 5.261.

1113 See section 2.6 above.

1114 See section 2.7.6 above.

1115 Korea's first written submission, para. 56.

1116 Korea's first written submission, para. 56.

1117 Korea's first written submission, para. 56; response to Panel question No. 151.

claims, except for Pacific cod from Fukushima and Ibaraki.¹¹¹⁸ Moreover, the Panel has found that Korea did not review the measures within a reasonable period of time as required by Article 5.7.

This fact, coupled with the lack of a risk assessment, constitutes a strong indication that the measure is a trade-restrictive measure taken in the guise of an SPS measure.¹¹¹⁹

7.342. Korea argues that the discriminatory treatment is justified. However, Korea's arguments focus, once again, on the environmental conditions in Japan and an array of hypothetical fears about future contamination. The Panel recalls that it has concluded that the potential contamination of Japanese products is similar to that of products from the rest of the world in that the caesium content is below 100 Bq/kg. Indeed, in 2013 when the blanket import ban was adopted, all samples of the 28 fishery products from the 8 prefectures subject of Japan's claim, except for 6 samples of Pacific cod from Fukushima and Ibaraki, were found to contain well below 100 Bq/kg of caesium.¹¹²⁰ The same conclusion can be drawn for all of these 28 fishery products, including Pacific cod, with respect to the maintenance of the blanket and the product-specific import bans. The Panel also recalls its finding that most of samples of the 28 fishery products tested since October 2013 contained between 0 and 25 Bq/kg.¹¹²¹ As regards strontium and plutonium, the Panel recalls its findings that their contribution to the risk of radiation exposure from consumed food was minimal.

7.343. In light of very low levels of caesium and additional Codex radionuclides detected in Japanese food, the Panel fails to see a rational connection between an absolute import ban on these products and the measure's stated purpose of protecting Korean consumers against the risk posed by radionuclides in food in excess of Korea's tolerance levels. In the Panel's view, Korea's import bans constitute the type of "rigid and unbending requirement", which applies regardless of the risk profile of imported products.¹¹²² In particular, the measures do not provide for any mechanism, which would allow demonstrating low risk level in the banned products thus permitting their importation to Korea. In addition, the Panel notes that Korea does not apply similar bans to non-Japanese products expected to be highly contaminated, including in excess of Korea's tolerance levels.¹¹²³ Instead, for those products, Korea applies a caesium tolerance level of 100 Bq/kg. This, in the Panel's view, is a strong indication that the distinction drawn by the measure is not rationally related to the stated regulatory objective. Importantly, the Panel recalls its finding that another measure exists which is technically and economically feasible, significantly less trade restrictive, and achieves Korea's ALOP. The inconsistency of the import bans (product specific and blanket) with Article 5.6 is a strong indication that any distinction in treatment is not rationally related to the stated regulatory objective, but rather a further warning signal that the discrimination resulting from Korea's import bans is arbitrary or unjustifiable.

7.344. The Panel also notes that Korea applies its import bans to Japanese products depending on the prefecture of origin. This prefecture is determined based on either the prefecture of catch, of the food processing, or packaging plant.¹¹²⁴ If more than one prefecture is involved in production, then the prefecture subject to the most restrictive measure is used for origin. For example, a fish caught in Tokyo, but processed in Gunma would be subject to the ban, even though Tokyo is not listed as one of the prefectures covered by the ban. In this respect, the experts agree that the location of a food processing or packaging plant alone does not affect the levels of contamination of processed or packaged products.¹¹²⁵ As a result, the Panel finds such a manner of applying the

1118 See section 7.6 above.

1119 Appellate Body Report, Australia – Salmon, para. 166. The Panel is mindful that in Australia – Salmon, the Appellate Body found that a violation of Article 5.1 of the SPS Agreement was a "warning signal"

that could be taken into account in the assessment of consistency of measures with Articles 5.5 and 2.3.

Although Japan does not make a claim under Article 5.1, the Panel considers the fact that Korea has not reviewed the measure within a reasonable period with an aim to conducting a risk assessment following the imposition of import bans on the 28 fishery products a circumstance that the Panel should take into account in its analysis whether Korea's measures constituted arbitrary or unjustifiable discrimination or a disguised restriction in international trade.

1120 MHLW Caesium Monitoring Data of Food Products (April 2012– July 2016), (Exhibit JPN-157); ERD Fisheries Data, (Exhibit JPN-130 (revised)).

1121 See section 7.8.1.3 above.

1122 Appellate Body Report, US – Shrimp, para. 163. See also Panel Report, India – Agricultural Products, para. 7.435.

1123 Korea does not ban imports of products known to absorb radionuclides in high concentrations, such as forestry products, fungi, and game meat from areas affected by nuclear releases.

1124 Korea's response to Panel question No. 47.

1125 Experts' responses to Panel question No. 67 to the experts.

import bans not to be exclusively related to addressing the potential contamination of the products.

7.345. In addition, Japan points out that a fish caught on the high seas by a Japanese vessel, which is processed or packaged in one of the eight prefectures, will be subject to Korea's import bans. However, the same type of fish caught in the same area by a Korean or a third-country vessel will be able to freely access the Korean market, even if it is processed or packaged in Japan.¹¹²⁶ Korea argues that it follows the "flag state doctrine" and attributes origin of a product to the nationality of a vessel because of "technical and economical limitations."¹¹²⁷ Additionally, Korea states that it cannot rely on Japanese origin certificates due to instances of forgery and inability of the Japanese government to properly track the origin of products.¹¹²⁸ Korea's import bans are predicated on the theory that it is addressing the risk associated with particular fishery species from particular locations. However, it would allow products from the same area and presumably posing the same potential for contamination free entry into its market if they were caught by a vessel flying a non-Japanese flag. Determining origin of fish caught on the high seas here may pose some practical difficulties, but leaving such large room for differential regulatory treatment on this basis indicates, in the Panel's view, that the measures are not tailored to the stated regulatory objective. Additionally, the Panel fails to see how alleged instances of forgery of origin certificates for prefectures within Japan can justify differential treatment of products based on whether a ship is flying a Korean or a Japanese flag when it catches a fish.

7.346. The risk of non-compliance with SPS measures, such as forging an origin certificate, is relevant to an assessment of risk and also whether particular distinctions in treatment are justified. However, Korea has not demonstrated a systemic failure in Japanese monitoring and certification of food products. Rather, Korea alleges 22 cases of forged certificates of origin in 2013 and 2014 out of 38,033 and 38,682 consignments of food products, which Korea imported from Japan in these years respectively.¹¹²⁹ The Panel understands that each consignment would have had to be accompanied by at least one certificate of origin. Seen in that context, the 22 cases of forgery do not seem to us a factor that could undermine the overall credibility of Japan's origin tracking. In addition, none of these consignments, presumably including the 22 cases referred to by Korea, contained caesium or other radionuclides in excess of Korea's tolerance levels.¹¹³⁰ Last but not least, the Panel notes that Korea continues to use Japanese certificates of origin in order to determine whether a product is subject to an import ban or whether the pre-export caesium testing requirement applies.¹¹³¹ Therefore, the Panel does not see how occasional criminal activity in origin certification provides a rational basis for justifying a total import ban on 28 fishery products from 8 prefectures.

7.347. Japan also cites several statements contained in various press releases announcing the measures as evidence that Korea's intent was to prevent Japanese trade rather than protect Korean consumers from contaminated food. In the Panel's view while such statements could be relevant to the Panel's assessment of whether discrimination is arbitrary or unjustifiable,¹¹³² they have to be approached with caution and read in their proper context.¹¹³³ For instance, a press release issued by Korea's Prime Minister's Office, stating that "distribution of fishery products from [the 8 Japanese prefectures] will be completely banned in Korea regardless of their radioactive contamination" simply refers to the restrictive nature of the import ban, which has been duly taken into account by the Panel.¹¹³⁴ As regards the Letter from Korea's Ministry of Oceans and Fisheries, stating that "Korean fishermen are in a dismal condition suffering from huge losses", the Panel notes that the quotation provided by Japan omits the reason for such a situation of Korean fishermen, namely low consumption of marine products caused by the fear of contamination. The entire sentence reads that:

1126 Korea's response to Panel question No. 47.

1127 Korea's response to Panel question No. 47.

1128 Korea's response to Panel question No. 20; second written submission, paras. 245-246.

1129 Korea's response to Panel question No. 120(c).

1130 Korea's response to Panel question No. 120(c).

1131 See section 2.7.1 above.

1132 Panel Report, Mexico – Taxes on Soft Drinks, para. 8.91 (citing Appellate Body Report, Canada – Periodicals, pp. 30-32).

1133 See in that connection, Panel Report, EC – Large Civil Aircraft, paras. 7.1919-7.1920.

1134 PMO Blanket Import Ban and Additional Testing Requirements Press Release (Exhibit JPN-3.b), p. 1.

(emphasis omitted)

Along with this, please note the fact that consumption of fish and fishery products in Korea has dropped sharply due to concerns over radioactive contamination and Korean fishermen are in a dismal condition suffering from huge losses.¹¹³⁵

7.348. If anything, this statement reflects a desire of the Korean government to reintroduce trust among Korean consumers in the country's handling of potentially contaminated items and help improve consumption of fishery products in Korea. We also fail to see how quotes from research papers prepared by Korea's National Assembly Research Services can reflect decisions by the Korean Government.¹¹³⁶ Therefore, the Panel does not agree with Japan that these statements should be given significant weight in the Panel's assessment of whether the discrimination is arbitrary or unjustifiable.

7.349. Overall, however, the Panel finds that Korea's import bans are not rationally connected to the objective of protecting Korea's population against the risk arising from consumption of contaminated food products. The Panel's conclusion is based on a cumulative assessment of the following factors: (i) high degree of trade-restrictiveness of the measures, (ii) levels of caesium and additional Codex radionuclides measured in the relevant Japanese fishery species well below Korea's tolerance levels (iii) lack of review of the measures within a reasonable period of time with a view to conducting a risk assessment, (iv) the Panel's findings that the import bans are inconsistent with Article 5.6 and (v) disregarding the origin and contamination levels of a product harvested by a Japanese ship and packaged or processed in one of the eight prefectures.

7.350. As a result, the Panel concludes that Korea's maintenance of product-specific bans on Alaska pollock from Fukushima and Pacific cod from Aomori, Fukushima, Ibaraki, Iwate and Miyagi, as well as of the blanket import ban on 28 fishery products from 8 Japanese prefectures amounts to arbitrary or unjustifiable discrimination. Likewise, the Panel finds the discrimination resulting from the adoption of the blanket import ban on 27 fishery products from the 8 prefectures, and on Pacific cod from 6 prefectures (i.e. excluding Pacific cod from Fukushima and Ibaraki), to constitute arbitrary or unjustifiable discrimination.