Source(s) of the information:

Lawyers, other representatives, expert(s), tribunal’s secretary

Report of the Panel

WTO CASES CITED IN THIS REPORT

Short TitleFull Case Title and Citation
Argentina – Hides and Leather Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and Import of Finished Leather, WT/DS155/Rand Corr.1, adopted 16 February 2001, DSR 2001:V, p. 1779
Argentina – Import Measures Appellate Body Reports, Argentina – Measures Affecting the Importation of Goods, WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R, adopted 26 January 2015
Argentina – Import Measures Panel Reports, Argentina – Measures Affecting the Importation of Goods, WT/DS438/R and Add.1 / WT/DS444/R and Add.1 / WT/DS445/R and Add.1, adopted 26 January 2015, as modified (WT/DS438/R) and upheld (WT/DS444/R / WT/DS445/R) by Appellate Body Reports WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R
Brazil – Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, p. 1527
Brazil – Retreaded Tyres Panel Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/R, adopted 17 December 2007, as modified by Appellate Body Report WT/DS332/AB/R, DSR 2007:V, p. 1649
Canada – Renewable Energy / Canada – Feed-in Tariff Program Panel Reports, Canada – Certain Measures Affecting the Renewable Energy Generation Sector / Canada – Measures Relating to the Feed-in Tariff Program, WT/DS412/R and Add.1 / WT/DS426/R and Add.1, adopted 24 May 2013, as modified by Appellate Body Reports WT/DS412/AB/R / WT/DS426/AB/R, DSR 2013:I, p. 237
Canada – Wheat Exports and Grain Imports Appellate Body Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/AB/R, adopted 27 September 2004, DSR 2004:VI, p. 2739
Canada – Wheat Exports and Grain Imports Appellate Body Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/AB/R, adopted 27 September 2004, DSR 2004:VI, p. 2739
Chile – Price Band System Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/AB/R, adopted 23 October 2002, DSR 2002:VIII, p. 3045 (Corr.1, DSR 2006:XII, p. 5473)
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/R, adopted 23 October 2002, as modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, p. 3127
China – Auto Parts Panel Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/R, Add.1 and Add.2 / WT/DS340/R, Add.1 and Add.2 / WT/DS342/R, Add.1 and Add.2, adopted 12 January 2009, upheld (WT/DS339/R) and as modified (WT/DS340/R / WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, DSR 2009:I, p. 119
China – Rare Earths Panel Reports, China – Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum, WT/DS431/R and Add.1 / WT/DS432/R and Add.1 / WT/DS433/R and Add.1, adopted 29 August 2014, upheld by Appellate Body Reports WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R, DSR 2014:IV, p. 1127
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012, DSR 2012:VII, p. 3295
China – Raw Materials Panel Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/R, Add.1 and Corr.1 / WT/DS395/R, Add.1 and Corr.1 / WT/DS398/R, Add.1 and Corr.1, adopted 22 February 2012, as modified by Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, DSR 2012:VII, p. 3501
Colombia – Ports of Entry Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, WT/DS366/R and Corr.1, adopted 20 May 2009, DSR 2009:VI, p. 2535
Dominican Republic – Import and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May 2005, DSR 2005:XV, p. 7367
Dominican Republic – Import and Sale of Cigarettes Panel Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS302/AB/R, DSR 2005:XV, p. 7425
Dominican Republic – Safeguard Measures Panel Report, Dominican Republic – Safeguard Measures on Imports of Polypropylene Bags and Tubular Fabric, WT/DS415/R, WT/DS416/R, WT/DS417/R, WT/DS418/R, and Add.1, adopted 22 February 2012, DSR 2012:XIII, p. 6775
EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, p. 591
EC – Bananas III (Guatemala and Honduras) Panel Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, Complaint by Guatemala and Honduras, WT/DS27/R/GTM, WT/DS27/R/HND, adopted 25 September 1997, as modified by Appellate Body Report WT/DS27/AB/R, DSR 1997:II, p. 695
EC – Export Subsidies on Sugar (Australia) Panel Report, European Communities – Export Subsidies on Sugar, Complaint by Australia, WT/DS265/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIII, p. 6499
EC – Export Subsidies on Sugar (Brazil) Panel Report, European Communities – Export Subsidies on Sugar, Complaint by Brazil, WT/DS266/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIV, p. 6793
EC – Export Subsidies on Sugar (Thailand) Panel Report, European Communities – Export Subsidies on Sugar, Complaint by Thailand, WT/DS283/R, adopted 19 May 2005, as modified by Appellate Body Report WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R, DSR 2005:XIV, p. 7071
EC – Hormones Appellate Body Report, EC Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R, adopted 13 February 1998, DSR 1998:I, p. 135
EC – Hormones (Canada) Panel Report, EC Measures Concerning Meat and Meat Products (Hormones), Complaint by Canada, WT/DS48/R/CAN, adopted 13 February 1998, as modified by Appellate Body Report WT/DS26/AB/R, WT/DS48/AB/R, DSR 1998:II, p. 235
EC – Poultry Panel Report, European Communities – Measures Affecting the Importation of Certain Poultry Products, WT/DS69/R, adopted 23 July 1998, as modified by Appellate Body Report WT/DS69/AB/R, DSR 1998:V, p. 2089
EC – Seal Products Appellate Body Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/AB/R / WT/DS401/AB/R, adopted 18 June 2014, DSR 2014:I, p. 7
EC – Seal Products Panel Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/R and Add.1 / WT/DS401/R and Add.1, adopted 18 June 2014, as modified by Appellate Body Reports WT/DS400/AB/R / WT/DS401/AB/R, DSR 2014:II, p. 365
EC – Tariff Preferences Panel Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/R, adopted 20 April 2004, as modified by Appellate Body Report WT/DS246/AB/R, DSR 2004:III, p. 1009
EC – Trademarks and Geographical Indications Panel Reports, European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, WT/DS290/R (Australia) / WT/DS174/R (US), adopted 20 April 2005, DSR 2005:VIII, p. 3499 / DSR 2005: X, p. 4603
EC and certain member States – Large Civil Aircraft Panel Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/R, adopted 1 June 2011, as modified by Appellate Body Report, WT/DS316/AB/R, DSR 2011:II, p. 685
India – Additional Import Duties Appellate Body Report, India – Additional and Extra-Additional Duties on Imports from the United States, WT/DS360/AB/R, adopted 17 November 2008, DSR 2008:XX, p. 8223
India – Autos Panel Report, India – Measures Affecting the Automotive Sector, WT/DS146/R, WT/DS175/R, and Corr.1, adopted 5 April 2002, DSR 2002:V, p. 1827
India – Quantitative Restrictions Panel Report, India – Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products, WT/DS90/R, adopted 22 September 1999, upheld by Appellate Body Report WT/DS90/AB/R, DSR 1999:V, p. 1799
Japan – Alcoholic Beverages II Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 97
Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film and Paper, WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, p. 1179
Korea – Alcoholic Beverages Appellate Body Report, Korea – Taxes on Alcoholic Beverages, WT/DS75/AB/R, WT/DS84/AB/R, adopted 17 February 1999, DSR 1999:I, p. 3
Korea – Various Measures on Beef Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, DSR 2001:I, p. 5
Korea – Various Measures on Beef Panel Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/R, WT/DS169/R, adopted 10 January 2001, as modified by Appellate Body Report WT/DS161/AB/R, WT/DS169/AB/R, DSR 2001:I, p. 59
Mexico – Taxes on Soft Drinks Appellate Body Report, Mexico – Tax Measures on Soft Drinks and Other Beverages, WT/DS308/AB/R, adopted 24 March 2006, DSR 2006:I, p. 3
Peru – Agricultural Products Appellate Body Report, Peru – Additional Duty on Imports of Certain Agricultural Products, WT/DS457/AB/R and Add.1, adopted 31 July 2015
Thailand – Cigarettes (Philippines) Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/AB/R, adopted 15 July 2011, DSR 2011:IV, p. 2203
Turkey – Rice Panel Report, Turkey – Measures Affecting the Importation of Rice, WT/DS334/R, adopted 22 October 2007, DSR 2007:VI, p. 2151
Turkey – Textiles Panel Report, Turkey – Restrictions on Imports of Textile and Clothing Products, WT/DS34/R, adopted 19 November 1999, as modified by Appellate Body Report WT/DS34/AB/R, DSR 1999:VI, p. 2363
US – 1916 Act Appellate Body Report, United States – Anti-Dumping Act of 1916, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September 2000, DSR 2000:X, p. 4793
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779
US – COOL Appellate Body Reports, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/AB/R / WT/DS386/AB/R, adopted 23 July 2012, DSR 2012:V, p. 2449
US – Corrosion-Resistant Steel Sunset Review Appellate Body Report, United States – Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan, WT/DS244/AB/R, adopted 9 January 2004, DSR 2004:I, p. 3
US – FSC (Article 21.5 – EC) Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, p. 55
US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475)
US – Gasoline Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, p. 3
US – Lamb Panel Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/R, WT/DS178/R, adopted 16 May 2001, as modified by Appellate Body Report WT/DS177/AB/R, WT/DS178/AB/R, DSR 2001:IX, p. 4107
US – Poultry (China) Panel Report, United States – Certain Measures Affecting Imports of Poultry from China, WT/DS392/R, adopted 25 October 2010, DSR 2010:V, p. 1909
US – Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, p. 2755
US – Shrimp (Thailand) / US – Customs Bond Directive Appellate Body Report, United States – Measures Relating to Shrimp from Thailand / United States – Customs Bond Directive for Merchandise Subject to Anti-Dumping/Countervailing Duties, WT/DS343/AB/R / WT/DS345/AB/R, adopted 1 August 2008, DSR 2008:VII, p. 2385 / DSR 2008:VIII, p. 2773
US – Shrimp (Thailand) Panel Report, United States – Measures Relating to Shrimp from Thailand, WT/DS343/R, adopted 1 August 2008, as modified by Appellate Body Report WT/DS343/AB/R / WT/DS345/AB/R, DSR 2008:VII, p. 2539
US – Underwear Panel Report, United States – Restrictions on Imports of Cotton and Man-made Fibre Underwear, WT/DS24/R, adopted 25 February 1997, as modified by Appellate Body Report WT/DS24/AB/R, DSR 1997:I, p. 31
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, p. 323

GATT CASES CITED IN THIS REPORT

Short TitleFull Case Title and Citation
Canada – Provincial Liquor Boards (EEC) GATT Panel Report, Canada – Import, Distribution and Sale of Alcoholic Drinks by Canadian Provincial Marketing Agencies, L/6304, adopted 22 March 1988, BISD 35S/37
Canada – Provincial Liquor Boards (US) GATT Panel Report, Canada – Import, Distribution and Sale of Certain Alcoholic Drinks by Provincial Marketing Agencies, DS17/R, adopted 18 February 1992, BISD 39S/27
EEC – Minimum Import Prices GATT Panel Report, EEC – Programme of Minimum Import Prices, Licences and Surety Deposits for Certain Processed Fruits and Vegetables, L/4687, adopted 18 October 1978, BISD 25S/68
Japan – Leather (US II) GATT Panel Report, Panel on Japanese Measures on Imports of Leather, L/5623, adopted 15 May 1984, BISD 31S/94
Japan – Semi-Conductors GATT Panel Report, Japan – Trade in Semi-Conductors, L/6309, adopted 4 May 1988, BISD 35S/116

ABBREVIATIONS

AbbreviationDescription
ASEIBSSINDO Indonesian association of horticultural product importers
Animal Law Law of the Republic of Indonesia Number 18 of 2009 on Animal Husbandry and Animal Health
Animal Law Amendment Law of the Republic of Indonesia Number 41 of 2014 Concerning Amendment of Law Number 18 of 2009 Concerning Husbandry and Animal Health
API Importer Registration Number
API-U Importer Registration Number for companies importing certain goods for trading purposes
API-P Importer Registration Number for companies importing goods for their own consumption
BULOG Indonesia's Logistics Agency
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
Farmers Law Law of the Republic of Indonesia Number 19 of 2013 Concerning Protection and Empowerment of Farmers
Food Law Law of the Republic of Indonesia Number 18 of 2012 Concerning Food
GATT 1994 General Agreement on Tariffs and Trade 1994
Horticulture Law Law of the Republic of Indonesia Number 13 of 2010 Concerning Horticulture
Import Licensing Agreement Agreement on Import Licensing Procedures
INATRADE Trade Licensing Services Using Electronic and Online System
INSW Indonesia National Single Window
UPP Trade Services Unit
MOA Ministry of Agriculture
MOA 86/2013 Regulation of the Minister of Agriculture Number 86/Permentan/OT.140/8/2013 Concerning Import Recommendation of Horticulture Products, of 30 August 2013
MOA 139/2014, as amended Regulation of the Minister of Agriculture Number 139/Permentan/PD.410/12/2014 Concerning Importation of Carcasses, Meats, and/or Their Processed Products into the Territory of the Republic of Indonesia, of 24 December 2014 amended by Regulation of the Minister of Agriculture Number 02/Permentan/PD.410/1/2015, of 22 January 2015
MOA Recommendation Recommendation from the Ministry of Agriculture
MOT Ministry of Trade
MOT 16/2013, as amended Regulation of the Minister of Trade Number 16/M-DAG/PER/4/2013 Concerning Provisions on the Import of Horticultural Products, of 22 April 2013, amended by Regulation of the Minister of Trade Number 47/M-DAG/PER/8/2013 Concerning Amendment of Regulation of the Minister of Trade Number 16/M-DAG/PER/4/2013, of 30 August 2013
MOT 46/2013, as amended Regulation of the Minister of Trade Number 46/M-DAG/PER/8/2013 Concerning Provisions on the Import and Export of Animals and Animal Products, of 30 August 2013, amended by Regulation of the Minister of Trade No. 57/M-DAG/PER/9/2013, of 26 September 2013 and by Regulation of the Minister of Trade 17/M-DAG/PER/3/2014, of 27 March 2014
MUI Indonesian Council of Ulama
PI Producer Importer of Horticultural Products
REIPPT Export Import Recommendation for Certain Agricultural Products
RI Registered Importer of Horticultural Products
RIPH Horticultural Products Import Recommendation (Rekomendasi Impor Produk Hortikultura)
SPS Agreement Agreement on Sanitary and Phytosanitary Measures
TBT Agreement Agreement on Technical Barriers to Trade

1 INTRODUCTION

1.1 COMPLAINTS BY NEW ZEALAND AND THE UNITED STATES

1.1.
On 8 May 2014, New Zealand and the United States (the co-complainants) requested consultations with Indonesia pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994), Article 19 of theAgreement on Agriculture, Article 6 of the Agreement on Import Licensing Procedures (Import Licensing Agreement), and Articles 7 and 8 of the Agreement on Preshipment Inspection concerning certain measures imposed by Indonesia on the importation of horticultural products and animals and animal products into Indonesia.1
1.2.
The co-complainants held consultations with Indonesia in Jakarta on 19 June 2014 but failed to resolve the dispute.2

1.2 PANEL ESTABLISHMENT AND COMPOSITION

1.3.
On 18 March 2015, the co-complainants requested the establishment of a panel pursuant to Article 6 of the DSU with standard terms of reference.3 At its meeting on 20 May 2015, the Dispute Settlement Body (DSB) established a single panel pursuant to the requests of the co-complainants, in accordance with Article 9.1 of the DSU.4
1.4.
The Panel's terms of reference are the following:

To examine, in the light of the relevant provisions of the covered agreements cited by the parties to the dispute, the matter referred to the DSB by New Zealand in document WT/DS477/9, and the United States in document WT/DS478/9, and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in those agreements.5

1.5.
On 28 September 2015, the co-complainants requested the Director-General to determine the composition of the Panel, pursuant to paragraph 7 of Article 8 of the DSU. On 8 October 2015, the Director-General accordingly composed the Panel as follows:

Chairman: Mr Cristian Espinosa Cañizares

Members: Mr Gudmundur Helgason

Ms Angela María Orozco Gómez

1.6.
Argentina; Australia, Brazil, Canada, China, the European Union, India, Japan, Korea, Norway, Paraguay, Singapore, Chinese Taipei, and Thailand reserved their rights to participate in the panel proceedings as third parties.6

1.3 PANEL PROCEEDINGS

1.3.1 General

1.7.
On 28 October 2015, after consultation with the parties, the Panel adopted its Working Procedures7 and timetable. The timetable was subsequently revised on 12 December 2015.
1.8.
The Panel held a first substantive meeting with the parties on 1 and 2 February 2016. A session with the third parties took place on 2 February 2016. The Panel held a second substantive meeting with the parties on 13 and 14 April 2016.
1.9.
On 26 May 2016, the Panel issued the descriptive part of its Report to the parties. The Panel issued its Interim Report to the parties on 12 July 2016. The Panel issued its Final Report to the parties on 5 July 2016.

1.3.2 Request for enhanced third-party rights

1.10.
On 2 December 2015, Australia, Brazil, Canada and the European Union jointly requested the Panel to exercise its discretion under Article 12.1 of the DSU to modify its Working Procedures. The requesting third parties asked the Panel to grant them additional rights to those provided in Article 10 of the DSU, in particular: (i) "to receive an electronic copy of all submissions and statements of the parties, including responses to Panel questions, up to the issuance of the interim report"8; and (ii) "to be present for the entirety of all substantive meetings of the Panels with the parties".9
1.11.
Responding to the Panel's invitation to present their views on this request, both the United States10 and Indonesia11 opposed the granting of enhanced rights to third parties in these proceedings. New Zealand supported the request.12
1.12.
On 20 January 2016, the Panel issued a communication where it declined Australia, Brazil, Canada and the European Union's joint request for enhanced third party rights in these proceedings.

1.3.3 Request for a preliminary ruling

1.13.
On 11 December 2015, Indonesia submitted to the Panel a request for a preliminary ruling concerning the consistency of New Zealand's and the United States' panel requests and first written submissions with the requirements of the DSU.13
1.14.
In response to the Panel's invitation to provide their views on Indonesia's request, the United States and New Zealand provided a joint communication on 21 December 2015. The Panel also provided third parties with an opportunity to comment on the preliminary ruling request prior to the submission of Indonesia's first written submission. Only Australia and Brazil took advantage of this opportunity and submitted to the Panel their comments on Indonesia's preliminary ruling request on 6 January 2016.
1.15.
In the light of Indonesia's wish that the Panel rule on its request before the first substantive meeting, the Panel decided to communicate its conclusions on Indonesia's request on 27 January 2016, as early as possible before its first substantive meeting. At that time, the Panel indicated that, following prior practice14 and in the interest of the efficiency of the proceedings, more detailed reasons in support of those conclusions would be provided as soon as possible and, in any event, prior to the date of issuance of the Interim Report.15 The Panel issued its preliminary ruling to the parties, with a copy to the third parties, on 5 July 2016. The Panel's preliminary ruling of 5 July 2016 is an integral part of this panel Report and is included in Annex A-1.

2 FACTUAL ASPECTS

2.1 INTRODUCTION

2.1.
The co-complainants challenged 18 separate measures that Indonesia imposed on the importation of horticultural products, animals and animal products. Most of these measures constituted distinct elements or components of Indonesia's import licensing regimes for horticultural products, on the one hand, and animals and animal products, on the other. Two of the challenged measures concern the import licensing regimes "as a whole", defined as these distinct elements operating in conjunction. In addition, the co-complainants challenged Indonesia's requirement conditioning the importation of horticultural products and animals and animal products on Indonesia's determination of the sufficiency of domestic production to fulfil domestic demand.
2.2.
In this section of the Report, the Panel will describe Indonesia's legal framework for the importation of horticultural products, animals and animal products; the relevant import licensing application and issuance procedures and the measures at issue in this dispute.
2.3.
The Panel notes that the parties disagree on a number of factual issues. To the extent that it is necessary for the Panel to resolve those disputed factual issues, it will do so in its Findings.

2.2 INDONESIA'S LEGAL FRAMEWORK FOR THE IMPORTATION OF HORTICULTURAL PRODUCTS, ANIMALS AND ANIMAL PRODUCTS

2.2.1 Overarching legislative framework

2.2.1.1 Food Law

2.4.
The Law of the Republic of Indonesia Number 18 of 2012 Concerning Food (Food Law)16 deals with national food production, planning and management. It emphasizes the importance of sovereignty17 and independence18 in food policy-making. While instituting an overarching principle of sufficiency of domestic production, its provisions define the scope and objectives of, inter alia, national food production, management, planning, availability, affordability, distribution, consumption and trade. Indonesia's Food Law also delineates the role of government institutions in managing food supply and distribution as well as price stabilization.19 It prioritizes domestic food production and national food reserves as the main sources of food supply, with importation to be considered only in case of food shortages.20 It enshrines the government's overall responsibility in formulating food import regulations that are supportive of sustainable farming and foster farmer and consumer welfare.21 The Food Law also addresses the implementation and monitoring of halal requirements.22

2.2.1.2 Farmers Law

2.5.
The Law of the Republic of Indonesia Number 19 of 2013 Concerning Protection and Empowerment of Farmers (Farmers Law)23 aims at assisting farmers to cope with numerous production and marketing challenges (infrastructure, risk-management, capacity-building, finance, etc.). Indonesia's Farmers Law applies to agricultural commodities24 and echoes the fundamental principles of sufficiency and prioritization of domestic agricultural production (and consumption), while citing price stabilization objectives. To enforce adherence to the sufficiency principle, the Farmers Law prohibits the importation of agricultural commodities when domestic supply or government food reserves are deemed sufficient.25 In order to meet national food requirements, "import arrangements" must be planned by the government "according to the harvest season and/or domestic consumption requirement", with relevant inter-ministerial coordination.26 The Farmers Law further requires all agricultural imports to come into Indonesia through government‑stipulated entry points.27 It broadly establishes import licensing procedures for agricultural products28 as well as stipulating criminal penalties for not conforming to the designated entry points29 and for importing agricultural commodities when domestic supply is sufficient.30

2.2.1.3 Horticulture Law

2.6.
The Law of the Republic of Indonesia Number 13 of 2010 Concerning Horticulture (Horticulture Law)31 lays down general rules regarding planning, development, research, finance, investment, marketing (including distribution) and imports. Indonesia's Horticulture Law also enshrines the principle of sufficiency and prioritization of domestic production with respect to horticultural products.32 In addition to food safety, quality, packaging and labelling requirements, importation under the Horticulture Law is subject to criteria such as the "availability of domestic horticultural products" and the "established production and consumption targets".33 It also contains the generally applicable import licensing requirements (namely, a recommendation from the Ministry of Agriculture; an import permit from the Ministry of Trade; and the mandated use of government-designated entry points34) subject to the issuance of supplementary specific regulations.35 It provides that the Minister of Agriculture determines the types of horticultural products whose exit and/or entry from and to Indonesia's territory "requires permit".36 This Law makes the Government and/or local governments along with business actors collectively responsible for balancing national supply and demand for horticultural products, inter alia by controlling imports and exports.37

2.2.1.4 Animal Law

2.7.
The Law of the Republic of Indonesia Number 18 of 2009 on Animal Husbandry and Animal Health (Animal Law)38 as revised by the Law of the Republic of Indonesia Number 41 of 2014 Concerning Amendment of Law Number 18 of 2009 Concerning Husbandry and Animal Health (Animal Law Amendment)39 constitutes the legal foundation for the organization of husbandry and preservation of animal health (i.e. prevention of animal disease and zoonosis). Indonesia's Animal Law applies to animals40 and animal products.41 This Law mirrors the concepts of food sovereignty, sufficiency, independence, and food security that are found in the above Laws.42 As far as manufacturing is concerned, the Animal Law prioritizes "domestic raw material utilization".43 It also specifically regulates the importation of animals and animal products. Importation is only permitted if "domestic production and supply of Livestock and Animal Product has not fulfil[ed] public consumption".44 The Animal Law requires central and regional government agencies to ensure that all animal products, whether locally produced or imported, are halal and comply with quality and safety regulations during the entire supply chain.45 Only animal products that have been certified as halal46 and safe may be distributed.47 Additionally, processed food of animal origin "must comply with the provision of the regulating legislation in the food sector".48 The Ministry of Trade is the competent body to issue import licences for animal products (fresh and processed), after the applicants have obtained a "recommendation" from the relevant governmental agencies.49

2.2.2 Importation-related regulations adopted by Indonesia's Ministries of Trade and Agriculture in force at the time of the establishment of the Panel

2.8.
The Horticulture, Animal, Food and Farmers Laws provide the basis and rationale for the import licensing regimes for horticultural products on the one hand, and animals and animal products on the other.50 Although these two separate regimes share common features, the applicable importation rules and procedures differ and are set out in two distinct sets of regulations adopted by the Ministry of Trade and the Ministry of Agriculture: (i) MOT 16/2013, as amended51, and MOA 86/201352 set out Indonesia's import licensing regime for horticultural products in force at the time of the establishment of the Panel53; and (ii) MOT 46/2013, as amended54, and MOA 139/2014, as amended55, set out Indonesia's import licensing regime for animals and animal products in force at the time of the establishment of the Panel.56
2.9.
An element common to both regimes is that all importers of goods, whatever their nature, must obtain an importer registration number or API, which is further differentiated in two sub-categories, depending on the intended end-use of the goods being imported57; namely, API-U, which is granted only to companies importing certain goods for trading purposes58; and API-P, which is only delivered to companies importing goods for their own consumption and that are thus prohibited from trading or transferring such goods to other parties.59

2.2.2.1 Import licensing procedures for horticultural products

2.10.
The import licensing application and issuance procedures that relate to certain horticultural products are described below. Annex E-1 contains a graphical representation of these procedures.

2.2.2.1.1 Application process and related requirements

2.11.
Prior to importation, applicants must complete the following steps:

a. Obtain a "Horticultural Products" designation from the Ministry of Trade.60 This designation differs depending on end-use: (i) If the applicant wishes to import horticultural products for human consumption, a designation as a Registered Importer of Horticultural Products (RI) must be obtained61; (ii) If the applicant wishes to use imported horticultural products as raw materials in a production process, a designation as a Producer Importer of Horticultural Products (PI) must be obtained62;

b. Obtain a Horticultural Products Import Recommendation (Rekomendasi Impor Produk Hortikultura or RIPH) from the Ministry of Agriculture63,

c. Obtain an Import Approval (Surat Persetujuan Import) from the Ministry of Trade64, and

d. Undergo a technical inquiry65, carried out by a Surveyor66 at the port of origin.

2.12.
The above steps can differ in sequence, depending on the intended use of the imported horticultural product. If the product is destined for human consumption, the applicant needs to obtain the RI recognition first. Once registered, the RI may proceed to request an RIPH, followed by an Import Approval.67 If the product is intended to be used as raw materialin a production process, the applicant needs to obtain the RIPH first. Only then may the applicant seek recognition as a PI.68

2.2.2.1.2 Recognition either as an RI or PI by the Ministry of Trade

2.13.
The application process, documentary requirements and validity periods relating to the recognition as an RI or PI are regulated by MOT 16/2013, as amended. As mentioned above, pursuant to Article 3 of MOT 16/2013, as amended, a designation either as a PI or and RI is a mandatory preliminary step. All applications are submitted electronically69 to the Trade Services Unit (UPP), and addressed to the UPP Coordinator and Implementer, who manages the licensing service.70

2.2.2.1.2.1 Recognition as an RI

2.14.
This is the first step for importers seeking to import horticultural products for human consumption. Importers holding an RI designation can import horticultural products for human consumption but are prohibited from trading or transferring products directly to consumers or retailers.71 Importers holding an RI designation may only trade and/or transfer such imports to a "distributor" and cannot therefore sell the imported products directly to consumers.72 RI applications may be submitted at any time electronically.73 The documentation submitted is then verified for completeness74, after which, an "Assessment Team"75 checks its veracity and conducts a field inspection.76 Both the document verification and the field inspection are "conducted no later than" three working days from the date an application is deemed complete, and "conducted in no more than" three working days.77 If the results of the inspection process are satisfactory, the UPP Coordinator grants the RI designation within the next two working days; otherwise the application is rejected.78 Once issued, the validity period for the RI designation is two years starting from the date of issuance.79

2.2.2.1.2.2 Recognition as a PI

2.15.
This is the second step for importers seeking to import horticultural products as raw materials as they need to obtain an RIPH first. An importer who obtains a PI-designation can only import fresh or processed horticultural products as raw materials or auxiliary materials for its industrial production processes and is prohibited from trading and/or transferring these horticultural products.80 PI applications may be submitted at any time electronically.81 The verification process is identical to that applying to the RI designation.82 The validity period for the PI designation "will correspond with the validity period of a[n] RIPH" starting from the date of the PI issuance.83

2.2.2.1.3 Obtaining an RIPH

2.16.
After having obtained the RI designation, this is the second step for importers of horticultural products for human consumption; and the first step for importers seeking to import horticultural products as raw materials, i.e. prospective PI applicants. The issuance of the RIPH is also a pre-requisite to the issuance of an Import Approval in the case of RIs.84 The application process is open twice a year for 15 working days, i.e. in November and in May85, and applications are submitted electronically.86 A maximum timeframe of seven working days is foreseen for the verification and issuance process to be completed, after which the RIPH is issued.87 The RIPH letters are issued twice a year, with a six-month validity period, i.e. from January to June, and from July to December.88 However, in the case of chillies and fresh shallots for consumption, RIPHs are issued for three-month periods and on the basis of reference prices pursuant to Article 5.89

2.2.2.1.4 Obtaining an Import Approval

2.17.
As a third step, importers of horticultural products for human consumption holding an RI designation and an RIPH must also obtain an Import Approval from the Ministry of Trade.90 The application must be addressed electronically91 to the UPP Coordinator attaching the RIPH and the confirmation as RI-Horticultural Products. The UPP Coordinator then issues the Import Approval "no more than" two working days after the application is deemed complete and accurate.92 The timing for the submission of such applications is specifically regulated. Hence, the application windows are of one-month duration, twice a year. For imports of fresh and processed horticultural products listed in Appendix I that are scheduled for the period from January to June, "applications can only be submitted in the month of December"; and for imports planned for the period from July to December, "applications can only be submitted in the month of June."93 The Import Approvals are issued "at the beginning of each semester"94 and remain valid for that same semester.95
2.18.
For chillies and fresh shallots for consumption, applications "can be submitted at any time".96 Import Approvals remain valid for three months.97

2.2.2.1.5 Technical inquiry at the port of origin

2.19.
Once the Import Approval has been issued, all imports of fresh and processed horticultural products, whether by RIs or PIs, "must first undergo verification or technical inquiry at the port of origin".98 These mandated "technical inquiries" are carried out by Surveyors appointed by the Ministry of Trade.99 Once such inspections are completed, actual shipments may take place.100

2.2.2.2 Import licensing procedures for animals and animal products

2.20.
The import licensing application and issuance procedures that relate to animals and animal products are described below. Annex E-2 contains a graphical representation of these procedures.

2.2.2.2.1 Application process and related requirements

2.21.
Importers must obtain similar approvals to those required when importing horticultural products, albeit with a number of procedural differences. The approvals required to import animals and animal products depend on whether the product is listed in Appendix I or II of MOT 46/2013, as amended, and MOA 139/2014, as amended:

a. For the importation of cattle and beef meat and offals listed in Appendix I of MOT 46/2013, as amended, and MOA 139/2014, as amended, three approvals are required in the following sequence: (i) Recognition as an RI from the Ministry of Trade101; (ii) Recommendation from the Ministry of Agriculture ("MOA Recommendation")102; and (iii) Import Approval from the Ministry of Trade103;

b. For importation of the non-bovine animals, meat and offals listed in Appendix II of MOT 46/2013, as amended, and MOA 139/2014, as amended, two approvals are required in the following sequence: (i) MOA Recommendation104; and (ii) Import Approval from the Ministry of Trade.105

2.2.2.2.2 Recognition as an RI

2.22.
Obtaining recognition as an RI is the first step for importers seeking to import cattle and beef meat and offals listed in Appendix I of MOT 46/2013, as amended. This step is not foreseen in the case of products listed in Appendix II of MOT 46/2013, as amended.106 As in the case of horticultural products, all applications are submitted electronically to the UPP and addressed to the UPP Coordinator and Implementer. The UPP Coordinator then conducts document and field inspections to investigate the correctness of the application materials107, in a similar manner and within identical timelines as those described above in paragraph 2.14 above with respect to horticultural products. RI designations are valid for two years from the date of issuance and "can be extended".108

2.2.2.2.3 Obtaining an MOA Recommendation

2.23.
Obtaining the MOA Recommendation is the second step for recognized RIs wishing to import products listed in Appendix I of MOT 46/2013, as amended, and MOA 139/2014, as amended; and the first step for companies wishing to import the products listed in Appendix II of MOT 46/2013, as amended, and MOA 139/2014, as amended.109 Obtaining an MOA Recommendation is also a mandatory step prior to applying for an Import Approval.110
2.24.
To obtain an MOA Recommendation, eligible applicants111 have four windows, i.e. in December, March, June and September, to submit an electronic application to the Ministry of Agriculture.112 It is foreseen that the outcome is notified within seven working days.113 MOA Recommendations are issued four times a year in March, June, September, and December (for the following year).114 They remain valid at the latest until the end of the year to which they apply.115 Importers of carcasses, meat, and/or their processed products are prohibited from requesting changes to the country of origin, point of entry, type/category of carcasses, meat, and/or their processed products in already issued Recommendations.116
2.25.
In emergency circumstances, MOA 139/2014, as amended, provides that state-owned enterprises may be tasked by the Minister of State-Owned Enterprises to import carcasses and/or secondary cuts of meat in order to address food availability, price volatility, anticipated inflation or natural disasters.117 The same exception is mirrored in MOT 46/2013 as amended, allowing BULOG, Indonesia's Logistics Agency, to import the animals and animal products listed in Appendix I of the same regulation, for food security or price stabilization purposes. In that instance, BULOG would also be exempted from seeking RI registration. Attaching an MOA Recommendation when applying for an Import Approval would suffice.118

2.2.2.2.4 Obtaining an Import Approval

2.26.
As previously outlined in paragraph 2.21 above, obtaining an Import Approval is the third step for importers seeking to import cattle and beef meat and offals listed in Appendix I of MOT 46/2013, as amended, and MOA 139/2014, as amended, after obtaining both the RI designation and MOA Recommendation; and the second step, for importers seeking to import non-bovine animals, meat, and offals listed in Appendix II of MOT 46/2013, as amended, and MOA 139/2014, as amended, after having obtained the MOA Recommendation.119 As for horticultural products, requests for import approvals are submitted online to the UPP Coordinator and Implementer in accordance with fixed application windows preceding each quarter.120 Import approvals are granted within two working days once the application is deemed complete121, are issued "at the beginning of each quarter" for any of the periods, January to March, April to June, July to September, or October to December, and have a three-month validity.122 The validity period of import approvals may be extended for a maximum of 30 days under certain circumstances, except in the fourth quarter of the year when extension is not possible.123

2.2.2.2.5 Obtaining a Certificate of Health

2.27.
A Certificate of Health from the country of origin of the animals and animal products that are to be imported must be issued after the RIs have received their Import Approvals.124 The Import Approval Number must be specified in the Certificate of Health that must accompany every shipment of animal products to Indonesia.125

2.2.3 Post-establishment regulations

2.28.
This section covers certain changes to the import licensing regimes for both horticultural products and animals and animal products that took place after the establishment of this Panel.
2.29.
Concerning the general importer identification, from January 2016126, API registrations are valid as long as importers have on-going business activities. Importers holding an API are required to re-register at the issuing agency every five years commencing from the issuance date.127
2.30.
With respect to the import licensing regime for horticultural products128, the RI and PI designation processes have been eliminated so that importers of horticultural products need only obtain an RIPH, and an Import Approval, for each validity period.129 The end-use requirements previously applying to RIs and PIs and some of the documentary requirements have however been maintained. Another element modified is the timing for the submission of applications for Import Approvals: while Import approval applications by API-Ps can be submitted at any time130, API-Us wishing to import fresh horticultural product have two one-month application windows (December, for imports scheduled for the January-June semester; and June for the July-December semester). API-U applications for chillies and fresh shallots for consumption, and for processed horticultural products can be presented at any time.131 In addition, the 80% realization requirement and the accompanying penalty to reduce import allocations for the next period have been repealed.132 Once importers receive their Import Approval they must, however, continue to report on imports realized, attaching the scanned results of an Import Realization Control Card, duly stamped by a Customs and Excise official.133 Failing to do so twice will cause the Import Approval to be suspended for the next period.134
2.31.
Concerning the import licensing regime for animal and animal products135, the RI designation processes have also been eliminated so that to import Appendix I and Appendix II products, API-U and API-P importers only need obtain the MOA Recommendation and the MOT Import Approval.136 The 80% import realization requirement has also been repealed, although importers need to still submit written reports on their respective import realizations, for supervision purposes.137 The validity period for the MOA Recommendation and Import Approval has been extended from three to four months (1 January to 30 April; 1 May to 30 August; 1 September to 31 December), with a corresponding reduction in the number of application windows from four per year to three.138 Furthermore, the listing of animals and animal products in Appendices I and II has been amended.139 While the domestic absorption requirement at 3% for API-Us is maintained, this requirement is reduced to 1.5% for API-Ps.140 Finally, the length of prior storage periods is limited to a maximum of six months from the slaughter time to arrival in Indonesia in the case of imported frozen carcass and meat; and to a maximum of three months in the case of chilled carcass and meat.141

2.3 THE MEASURES AT ISSUE

2.3.1 Introduction

2.32.
As explained above, the co-complainants have challenged a total of 18 measures concerning Indonesia's import licensing regimes for horticultural products and animals and animal products as well as Indonesia's sufficiency of domestic production requirement. The table below enumerates the 18 measures at issue.

A. Import licensing regime for horticultural products
Discrete elements of the regime:
Measure 1 Limited application windows and validity periods
Measure 2 Periodic and fixed import terms
Measure 3 80% realization requirement
Measure 4 Harvest period requirement
Measure 5 Storage ownership and capacity requirements
Measure 6 Use, sale and distribution requirements for horticultural products
Measure 7 Reference prices for chillies and fresh shallots for consumption
Measure 8 Six-month harvest requirement
Regime as a whole:
Measure 9 Import licensing regime for horticultural products as a whole.
B. Import licensing regime for animals and animal products
Discrete elements of the regime:
Measure 10 Prohibition of importation of certain animals and animal products, except in emergency circumstances
Measure 11 Limited application windows and validity periods
Measure 12 Periodic and fixed import terms
Measure 13 80% realization requirement
Measure 14 Use, sale and distribution of imported bovine meat and offal requirements
Measure 15 Domestic purchase requirement
Measure 16 Beef reference price
Regime as a whole:
Measure 17 Import licensing regime for animals and animal products as a whole
c. sufficiency requirement
Measure 18 Sufficiency of domestic production to fulfil domestic demand

2.3.2 Import licensing regime for horticultural products

2.3.2.1 Measure 1: Limited application windows and validity periods

2.33.
Measure 1 consists of a combination of the limited application windows and the six-month validity periods of RIPHs and Import Approvals.142 Indonesia applies this Measure pursuant to Article 13 of Regulation MOA 86/2013143, which regulates the relevant timeframes concerning RIPHs and Articles 13A144,14145, 21146, 22147 and 30148 of Regulation MOT 16/2013, as amended, which does the same for Import Approvals.
2.34.
Pursuant to these provisions, importers may apply for an RIPH for the period from January to June over 15 working days starting in early November of the previous year, and for the period from July to December over 15 working days starting in early May of that year. Applications for Import Approvals may be made in December for the period from January to June, and in June for the period from July to December. Import Approvals are issued "at the beginning" of each semester and are valid for 6 months.

2.3.2.2 Measure 2: Periodic and fixed import terms

2.35.
Measure 2 consists of the requirement to import horticultural products only within the terms of the RIPHs and Import Approvals, including the quantity of the products permitted to be imported, the specific type of products permitted to be imported, the country of origin of the products, and the Indonesian port of entry through which the products will enter, and the impossibility to amend these terms during the validity period of RIPHs and Import Approvals.149 This Measure is implemented by Indonesia by means of Article 6 of MOA 86/2013150, that regulates the elements that need to be specified in the RIPHs, and, Article 13151 and 30152 of MOT 16/2013, as amended, which stipulates the same for the Import Approvals.
2.36.
Pursuant to these provisions, the RIPHs include the product name, the tariff post/HS of horticulture products, the country of origin, and entry point, while the Import Approvals include the type of imported product, the quantity requested for the six-month semester, the country of origin and the port of entry. Once issued, the terms of RIPHs and Import Approvals cannot be amended or revised during their validity period and therefore importers cannot import other than as specified in the relevant RIPH or Import Approval. When imported products do not coincide with the terms specified in the Import Approvals and/or in the RIPHs, they are destroyed (fresh) or re‑exported (processed) at the importers' cost.153

2.3.2.3 Measure 3: 80% realization requirement

2.37.
Measure 3 consists of the requirement that RIs of fresh horticultural products must import at least 80% of the quantity of each type of product specified on their Import Approvals for every six-month validity period.154 This Measure is implemented through Articles 14A155, 24156, 25A157, 26158 and 27A159 of MOT 16/2013, as amended.
2.38.
Pursuant to these provisions, RIs are required to import at least 80% of the quantity specified for each type of horticultural product listed on their Import Approval for every six-month period.160 Furthermore, RIs must account for the quantity of their realized imports during a semester by submitting an Import Realization Control Card to the Director General of Foreign Trade at the Ministry of Trade on a monthly basis. The Ministry of Trade sanctions RIs that fail to meet the 80% realization requirement or fail to file the Import Realization Control Card, with the suspension of their RI designations. A RI that fails to file the Import Realization Control Card three times could have its designation revoked.

2.3.2.4 Measure 4: Harvest period requirement

2.39.
Measure 4 consists of the requirement that the importation of horticulture products takes place prior to, during and after the respective domestic harvest seasons within a certain time period.161 Indonesia implements this measure mainly by means of Articles 5162 and 8163 of MOA 86/2013.
2.40.
Pursuant to these provisions, importation of horticultural products can only take place prior to, during and after the harvest season, within a certain time period established by the Indonesian authorities. Measure 4 prohibits imports outside the time periods decided by the Ministry of Agriculture.164 In establishing the time periods, the Ministry of Agriculture is guided by the objectives and determinations made by the Food Security Council165 which are later published as part of Indonesia's five-year Development Plans. The Ministry of Agriculture communicates its specified time periods to the business community before the start of each application window, notifying officially the Ministry of Trade at the same time. The Ministry of Trade may be consulted prior to the official adoption of a specified time period for a validity period. In turn, the Ministry of Trade gives effect to the specified time periods set by the Ministry of Agriculture by issuing Import Approvals in accordance with the specified time period. Importers are required to submit a plan for the distribution of imported products, indicating the time of entry and the region/municipality where the products will be distributed.

2.3.2.5 Measure 5: Storage ownership and capacity requirements

2.41.
Measure 5 consists of the requirement that importers must own their storage facilities with sufficient capacity to hold the full quantity requested on their Import Application.166 This requirement is implemented by Indonesia through Article 8(1)(e) of MOT 16/2013, as amended167, and by Article 8(2)(c) and (d) of MOA 86/2013, as amended.168
2.42.
Accordingly, importers applying for designation as an RI are to provide "proof of ownership of storage facilities appropriate for the product's characteristics". In addition, importers applying for an RIPH must include a statement of ownership of storage as part of their applications.

2.3.2.6 Measure 6: Use, sale and distribution requirements for horticultural products

2.43.
Measure 6 consists of the requirements on the importation by PIs and RIs of listed horticultural products that limit the use, sale and distribution of the imported products.169 Indonesia implements this Measure by means of Articles 7170, 8171, 15 and 26(e)-(f)172 of MOT 16/2013, as amended.173
2.44.
Pursuant to these provisions, an importer that obtains recognition as a PI can only import horticultural products as raw materials or auxiliary materials for its industrial production processes and is thus prohibited from trading and/or transferring them. Likewise, an importer that obtains recognition as an RI can only import horticultural products for consumption provided they are traded or transferred to a distributor and not directly to consumers or retailers. Designation as an RI or PI can be revoked where the relevant importer is proven to have traded and/or transferred imported horticultural products.174

2.3.2.7 Measure 7: Reference prices for chillies and fresh shallots for consumption

2.45.
Measure 7 consists of the implementation of a reference price system by the Ministry of Trade on imports of chillies and fresh shallots for consumption.175 Indonesia implements this Measure by means of Article 5(4) of MOA 86/2013176 and by Article 14B of MOT 16/2013, as amended by MOT 47/2013.177
2.46.
Pursuant to these provisions, importation is suspended when the domestic market price falls below the pre-established reference price. Whenever the reference price system is activated, imports are temporarily suspended, independently of whether an importer holds an RIPH and/or an Import Approval. Already authorized import volumes do not "carry over" to the next validity period.178 Imports are resumed when the market price again reaches the reference price.
2.47.
The term "reference price" is defined as "the reference selling price at the retail level that is established by the Horticultural Product Price Monitoring Team."179 This team is formed by the Minister of Trade and "consists of representatives from relevant agencies".180 It has the authority to evaluate the reference price "at any time".181 In determining the reference price, the Ministry of Trade takes into account: (1) farmers' operational costs; (2) farmers’ profit margins; and (3) a "reasonable price of such products to be sold to customers."182 The Ministries of Agriculture and Trade (Directorate of Import, Directorate of Export Import Facilitation and Directorate of Primary and Strategic Products) are responsible for monitoring the reference price system while the domestic market prices of chilli and shallot are monitored by Indonesia's Statistic Central Bureau.183 The reference price calculation methodology and parameters are not published.184 Pursuant to the Decree of Director General of Domestic Trade No 118/PDN/KEP/10/2013, effective from 3 October 2013, the reference prices have been respectively set as follows: IDR 26,300/kg for big red chilli; IDR 28,000 for bird's eye chilli; and IDR 25,700 for shallot.185

2.3.2.8 Measure 8: Six-month harvest requirement

2.48.
Measure 8 consists of the requirement that all imported fresh horticultural products have been harvested less than six months prior to importation.186 Indonesia implements this measure by means of Article 8(1)(a) of MOA 86/2013.187 Pursuant to this provision, in order to obtain an RIPH for fresh horticultural products, an RI must produce a statement committing not to import horticultural products harvested over six months prior to importation.

2.3.2.9 Measure 9: Import licensing regime for horticultural products as a whole

2.49.
Measure 9 consists of Indonesia's import licensing regime for horticultural products, as maintained through MOT 16/2013, as amended, and MOA 86/2013, as a whole.188 Reference is made to the various subsections describing the individual elements of this regime that have been challenged as separate Measures 1 to 8.

2.3.3 Import licensing regime for animals and animal products

2.3.3.1 Measure 10: Import prohibition of certain animals and animal products, except in "emergency circumstances"

2.50.
Measure 10 consists of the prohibition on the importation of bovine meat, offal, carcass and processed products that are not listed in Appendices I of MOT 46/2013, as amended, and MOA 139/2014, as amended; or non-bovine and processed products that are not listed in Appendices II of MOT 46/2013, as amended, and MOA 139/2014, as amended.189 Indonesia implements this Measure by means of Article 2(2) of MOT 46/2013, as amended190; and Articles 8191 and 23(3)192 of MOA 139/2014, as amended, and Article 59(1) of the Animal Law Amendment.193
2.51.
Pursuant to the above provisions, only those animals and animal products that are listed in the relevant appendices to both MOA 139/2014, as amended, and MOT 46/2013, as amended, are eligible to obtain MOA Recommendations and Import Approvals, and thus can be imported under Indonesia's import licensing regime. State-owned enterprises may be authorized to import unlisted carcasses and/or secondary cut meats up to the amount determined by Indonesian officials to be required to address food availability, price volatility, inflation and/or natural disasters.194

2.3.3.2 Measure 11: Limited application windows and validity periods

2.52.
Measure 11 consists of a combination of requirements, including the prohibition on importers from applying for Recommendations and Import Approvals outside four one-month periods, the provision that Import Approvals are valid for only the three-month duration of each quarter, and the requirement that importers are only permitted to apply for Recommendations and Import Approvals in the month immediately before the start of the relevant quarter.195 This measure is implemented by Indonesia through Article 29 of MOA 139/2014, as amended by MOA 2/2015196, and Articles 12197 and 15198 of MOT 46/2013, as amended.
2.53.
Pursuant to these provisions, the issuance of a recommendation is conducted four times; namely, December of the previous year, and March, June, and September of the current year. Applications for Import Approval of animals and animal products listed in Appendix I can only be submitted as follows: (i) for the first quarter (January to March), in the month of December; (ii) for the second quarter (April to June), in the month of March; (iii) for the third quarter (July to September), in the month of June; and (iv) for the fourth quarter (October to December), in the month of September. The Import Approval is then issued at the beginning of each relevant quarter and is valid for three months.

2.3.3.3 Measure 12: Periodic and fixed import terms

2.54.
Measure 12 consists of the requirement to only import animals and animal products within the terms of the Recommendations and Import Approvals, the prohibition of importing types/categories of carcasses, meat, and/or their processed products other than as specified in Import Approvals and Recommendations, and the prohibition from requesting changes to the elements specified in Recommendations once they have been issued.199 This measure is implemented by Indonesia through Articles 30200 and 33(a)-(b) and 39(e)201 of MOA 139/2014, as amended202, and Article 30 of MOT 46/2013, as amended.203
2.55.
Pursuant to these provisions, MOA Recommendations and Import Approvals must specify, inter alia, the quantity of products permitted to be imported; a description of the type, category, cut and HS Code for the products to be imported; the country of origin of products permitted for importation; and the port of entry into Indonesia through which products are permitted to be imported. Importers are prohibited from requesting changes to the country of origin, point of entry, type/category of carcasses, meat, and/or their processed products once a Recommendation has been issued. If the quantity, type, business unit, and/or country of origin of imports is not in accordance with the relevant Import Approval, those imports will have to be re-exported, at the importer's cost.

2.3.3.4 Measure 13: 80% realization requirement

2.56.
Measure 13 consists of the requirement whereby RIs must import at least 80% of each type of product covered by their Import Approvals every year.204 This Measure is implemented by Indonesia by means of Articles 13205, 25206, 26207 and 27208 of MOT 46/2013, as amended.
2.57.
Pursuant to the above provisions, RIs are required to import, on an annual basis, 80% of the quantity of each type of animal and animal product specified in their Import Approvals. In addition, RI designees are required to submit monthly import and export realization reports setting out all of their imports of animals and animal products. These reports must be submitted every month to the Ministry of Trade, the Ministry of Agriculture, and the Head of the Food and Drug Control Agency. The RI designees must attach a photocopy of their "Import Realization Control Card". Failing to fulfil the 80% realization requirement carries the penalty of suspension or revocation of the RI designation, depending on the circumstances established in Articles 26 and 27 of MOT 46/2013, as amended.

2.3.3.5 Measure 14: Use, sale and distribution of imported bovine meat and offal

2.58.
Measure 14 consists of certain requirements that limit the use, sale and distribution of imported animals and animal products, including bovine meat and offal.209 This measure is implemented by Indonesia through Articles 3210, 17211, 25(2)212 and 26213 of MOT 46/2013, as amended, and Articles 32214 and 39(d)215 of MOA 139/2014, as amended.
2.59.
Pursuant to the above provisions, the animals216 listed in Appendix I and Appendix II of MOT 46/2013, as amended, can only be imported for the purposes of improving genetic quality and diversity; developing science and technology; overcoming domestic deficiencies of seeds, breeders and/or feeders; and/or fulfilling research and development needs.217. For animal products, the bovine carcasses, meats, and/or offals listed in Appendix I of MOT 46/2013 can also be imported for the use and distribution of industry, hotels, restaurants, catering, and/or other special needs.218 The non-bovine carcasses, meats, and/or offal listed in Appendix II of Article 32 of MOA 139/2014, as amended by MOA 2/2015, may be imported only for the same purposes as the bovine products specified in Appendix I and, additionally, for sale in "modern markets".219

2.3.3.6 Measure 15: Domestic purchase requirement for beef

2.60.
Measure 15 consists of the requirement imposed upon importers of large ruminant meats to absorb local beef.220 Indonesia implements this Measure pursuant to Articles 5(1)221, and (1)222, 26(1)223 and 39(b)-(c)224 of MOA 139/2014, as amended.
2.61.
Pursuant to these provisions, in applying for a Recommendation, importers must submit proof of local beef purchases duly verified by the provincial agency or municipality of origin. Accordingly, business operators, state-owned enterprises, or regional government-owned enterprises that import large ruminant meats must absorb local beef when applying for a Recommendation.

2.3.3.7 Measure 16: Beef reference price

2.62.
Measure 16 consists of the implementation of a reference price system on imports of Appendix I animals and animal products and the ensuing suspension of imports when the domestic market price of secondary beef cuts falls below the pre-established reference price.225 This Measure is implemented by means of Article 14 of MOT 46/2013, as amended.226
2.63.
Pursuant to these provisions, in the event that the market price of secondary cuts of beef is below the reference price, imports of animals and animal products, as included in Appendix I, are suspended. Imports are resumed when the market price reaches again the reference price. The reference price is set at 76,000 Rupiah/kg.227

2.3.3.8 Measure 17: Import licensing regime for animals and animal products as a whole

2.64.
This measure consists of Indonesia's import licensing regime for animals and animal products, as maintained through MOT 46/2013, as amended, and MOA 139/2014, as amended by MOT 2/2015, as a whole.228 We refer to the various subsections describing the individual elements of this regime which have been challenged as separate Measures 10 to 16.

2.3.4 Measure 18: Sufficiency of domestic production to fulfil domestic demand

2.65.
Measure 18 consists of the requirement whereby importation of horticultural products, animals and animal products depends upon Indonesia's determination of the sufficiency of domestic supply to satisfy domestic demand.229 This measure is encompassed by Article 36B230 of the Animal Law Amendment, Article 88 of the Horticulture Law, Articles 14 and 36 of the Food Law231 and Article 30 of the Farmers Law.232
2.66.
Pursuant to these provisions, importation of horticultural products, animals and animal products is contingent upon the sufficiency of domestic supply for consumption and/or government food reserves.

3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

3.1 NEW ZEALAND

3.1.
New Zealand requests that the Panel finds that:

a. Indonesia’s import licensing regime for animals and animal products is inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture, both when viewed as a single measure and when its components are viewed as individual measures233;

b. Indonesia’s import licensing regime for horticultural products is inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture, both when viewed as a single measure and when its components are viewed as individual measures234;

c. Indonesia’s import restrictions based on the sufficiency of domestic production are inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture235;

d. the Domestic Purchase Requirement for beef and the restrictions on use, sale and distribution of animals and animal products are inconsistent with Article III:4 of the GATT 1994 to the extent they affect the internal sale, offering for sale, purchase, transportation, distribution or use of products236;

e. the restrictions on use, sale and distribution of horticultural products are inconsistent with Article III:4 of the GATT 1994 to the extent they affect the internal sale, offering for sale, purchase, transportation, distribution or use of products237; and

f. the limited application windows and validity periods for MOA Recommendations and Import Approvals for animals and animal products and horticultural products are inconsistent with Article 3.2 of the Import Licensing Agreement to the extent that they are non-automatic import licensing procedures.238 To the extent that the application windows and validity periods are automatic licensing procedures, New Zealand submits that they would be inconsistent with Article 2.2(a) of the Import Licensing Agreement.239

3.2.
Accordingly, New Zealand requests that the Panel recommend to the DSB that Indonesia brings its prohibitions and restrictions on the imports of animals and animal products and horticultural products into conformity with its WTO obligations.240

3.2 UNITED STATES

3.3.
The United States requests that the Panel finds241 that the prohibitions and restrictions imposed by Indonesia’s import licensing regimes for horticultural products and animals and animal products, operating individually and as whole regimes, and the provisions of Indonesia’s laws conditioning importation on the insufficiency of domestic production to fulfil domestic demand, are inconsistent with Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture.242
3.4.
The United States also requests that to the extent that the Panel finds that the limited application windows and validity periods for MOA Recommendations and Import Approvals, both for horticultural products and for animals and animal products, are subject to the disciplines of the Import Licensing Agreement, these requirements would be inconsistent with Article 3.2 of that Agreement.243
3.5.
Accordingly, the United States requests, pursuant to Article 19.1 of the DSU, that the Panel recommends the DSB that Indonesia bring the challenged measures into conformity with its WTO obligations.244

3.3 INDONESIA

3.6.
Indonesia requests the Panel to reject the co-complainants' claims in their entirety.245

4 ARGUMENTS OF THE PARTIES

4.1.
The arguments of the parties are reflected in their executive summaries, provided to the Panel in accordance with paragraph 18 of the Working Procedures adopted by the Panel (see Annexes B-1 and B-2).

5 ARGUMENTS OF THE THIRD PARTIES

5.1.
The arguments of Argentina, Australia, Brazil, Canada, the European Union, Japan, Korea, Norway, Paraguay and Chinese Taipei are reflected in their executive summaries, provided in accordance with paragraph 21 of the Working Procedures adopted by the Panel (see Annexes C-1, C-2, C-3, C-4, C-5, C-6, C-7, C-8, and C-9).

6 INTERIM REVIEW

6.1 INTRODUCTION

6.1.
On 12 July 2016, the Panel issued its Interim Report to the parties. On 26 July 2016, New Zealand, the United States and Indonesia submitted written requests for the review of the Interim Report. No party requested an interim review meeting. On 2 August 2016, New Zealand and the United States submitted comments on Indonesia's request for review. Indonesia did not submit comments on the co-complainants' requests for review.
6.2.
In accordance with Article 15.3 of the DSU, this Section of the Panel Report sets out the Panel's response to the parties' requests for review of precise aspects of the Report made at the interim review stage. The Panel modified aspects of its Report in the light of the parties' comments where it considered it appropriate, as explained below. In addition, the Panel also corrected a number of typographical and other non-substantive errors, including those identified by the parties. References to sections and paragraph numbers in this Section relate to the Interim Report, except as otherwise noted.

6.2 FACTUAL ASPECTS

6.3.
Regarding paragraph 2.8, the United States requested that the Panel make explicit that the measures within our terms of reference are those that were in effect at the time the Panel was established.246 The United States thus asked us to insert a footnote in the Report including references to Article 7.1 of the DSU and to some jurisprudence. No other party has commented on this request.
6.4.
The Panel observes that the United States' request relates to the descriptive part of the Interim Report, where the parties already had the opportunity to present their views on 2 June 2016. We recall that, at that time, the United States submitted a comment on that same paragraph but in relation to a different issue. The Panel considers that the understanding that the measures at issue in this dispute are those in effect at the time of the Panel's establishment is already reflected in Section 2.3 of the Report entitled "Measures at issue". The Panel thus declines to make the changes suggested by the United States.

6.3 STRUCTURE OF THE FINDINGS

6.5.
According to the United States, panel reports frequently contain a section in which the panel sets out its approach to interpretation of the covered agreements as well as the standard of review and burden of proof.247 The United States suggested that the Panel insert a section at the outset of its findings setting out our approach to these issues. No other party has commented on this request.
6.6.
The Panel notes that there is no common approach to inserting introductory sections as suggested by the United States.248 Nonetheless, our approach to the terms of reference, standard of review or burden of proof in the context of the present proceedings has been punctually addressed by the Panel where relevant. For instance, the Panel's approach to our terms of reference was amply discussed in our Preliminary Ruling of 5 July 2016.249 Similarly, the Panel's understanding on the burden of proof was discussed in the context of Article XX of the GATT 1994 and the order of analysis the Panel should follow, as evidenced in paragraph 7.34 below. Consequently, the Panel declines to make the changes suggested by the United States.

6.4 WHETHER CERTAIN CHALLENGED MEASURES ARE THE RESULTS OF DECISIONS BY PRIVATE ACTORS

6.7.
Regarding paragraphs 7.3 to 7.26, the United States submitted that Indonesia had not argued that the measures at issue were not themselves attributable to Indonesia but that the limiting effects demonstrated by the co-complainants were not attributable to the Indonesian measures because they were entirely the result of the choices of private actors.250 The United States thus suggested that the Panel either move its discussion on whether certain measures are the result of private actions to the Section of the Report addressing the co-complainants' claims under Article XI:1 of the GATT 1994 or, alternatively, this issue be addressed separately under the Article XI:1 analyses of Measures 1, 2, 3, 5, 11, 12, and 13.251 No other party has commented on this request.
6.8.
While we acknowledge that, in some instances, Indonesia seemed to have argued that the limiting effect of a number of its Measures was the result of the decision of private actors, this does not, however, detract from the fact that Indonesia presented this discussion under Article 4.2 of the Agreement on Agriculture252 and Article XI:1 of the GATT 1994.253 To us, this issue goes to the core of our jurisdiction and should be addressed before entering into the substantive analysis of the relevant claims at issue, as the Panel has done. For these reasons, the Panel declines to make the changes suggested by the United States.

6.5 WHETHER AN ADVERSE TRADE EFFECT TEST IS NECESSARY FOR A DETERMINATION UNDER ARTICLE XI:1 OF THE GATT 1994

6.9.
Regarding paragraphs 7.47 and 7.49, the United States requested that the Panel change the term "ruling" when referring to the Appellate Body's report in Argentina – Import Measures and use instead the term of "findings" or, alternatively, "guidance" to describe the referenced section in the Appellate Body’s report.254 No other party has commented on this request. The Panel made adjustments accordingly in paragraphs 7.47 and 7.49.

6.6 EVIDENTIARY WEIGHT GIVEN TO ADMINISTRATIVE PRACTICE VS. LEGAL TEXT

6.10.
Indonesia requested the Panel to provide further clarification with respect to the evidentiary weight it ascribed to the plain text of Indonesia's laws and regulations versus the common practice of implementing agencies, in the light of the Panel's apparent inconsistency with respect to the treatment of both categories throughout its report.255 Indonesia noted some disparity between the Panel's treatment of administrative practice in its Interim Report. For Indonesia, in several instances, the Panel seemed to adopt the co-complainants' assertions that importers, in practice, are limited by the operation of Indonesia's import licensing regime256 while it seemed that similar arguments made by Indonesia regarding the regular practice of its administrative agencies in implementing the import licensing regime were deemed insufficient.257 Indonesia then quoted paragraph 7.84 of the Interim Report referring to Article 11 of MOT 71/2015 in the context of the Panel's analysis of Measure 1258 and submitted that this Measure, although outside the Panel's terms of reference, was introduced as an example of the agency's regular practice regarding the timing of approvals.259 Indonesia further argued that, in its analysis of Measure 4, the Panel accepted the arguments of the co-complainants that administrative practice is more persuasive than the plain text of the regulation. Indonesia quotes part of paragraph 7,151 of the Interim Report in support of its argument.260
6.11.
Both co-complainants objected to Indonesia's request for review.261 New Zealand submitted that the Panel appropriately weighed the evidence before it and it is therefore not necessary for the Panel to provide the further clarification requested by Indonesia.262 New Zealand noted that, in the example provided by Indonesia regarding Measure 4, the Panel made its findings in part based on the extensive evidence submitted by the co-complainants. For New Zealand, the fact that the Panel reached factual findings on the basis of the evidence before it in respect of one measure and factual findings on the basis of other evidence that it weighed appropriately in respect of another measure does not amount to an "inconsistency" in treatment.263
6.12.
The United States submitted that the "apparent inconsistency" identified by Indonesia does not exist and that the Panel has made an objective assessment and exercised its discretion to give the evidence the weight it considered due.264 With respect to Measure 1, the United States noted that the co-complainants pointed out that the regulation in force at the time of the Panel's establishment stipulated that Import Approvals were issued at the beginning of each semester and that, in contrast, Indonesia asserted that Import Approvals are issued within two days. The United States pointed out that, in making this claim, Indonesia had cited a regulation that was issued after the establishment of the Panel but that, in any event, the said regulation did not support Indonesia’s assertion because it was silent on when Import Approvals are issued.265 With respect to Measure 4, the United States maintained that the Panel found that, although the text of the regulation "does not expressly restrict importation in terms of specific quantities", the operation of the Measure demonstrated its limiting effect on importation.266 The United States submitted that in coming to this conclusion, the Panel relied in part on evidence submitted by the co-complaints in the form of letters from Indonesian officials describing the harvest period restrictions and trade data showing sharp declines for the affected horticultural products.267 For the United States, far from treating the parties' evidence differently, the Panel simply found the co-complainants’ evidence persuasive as to the meaning of the challenged measure.268
6.13.
The Panel observes that Article 15.2 of the DSU, and paragraph 22 of the Panel's Working Procedures, provide parties with an opportunity to request the Panel "to review precise aspects of the interim report". Previous panels have declined to expand the scope of interim review beyond that provided for in Article 15.2 and have accordingly circumscribed their review to address only those comments that relate to "precise aspects" of the interim report.269 The Panel notes the general terms in which Indonesia put forward its statement that there is a disparity in the treatment of Indonesia's laws and regulations versus the common practice of implementing agencies. Indonesia only identifies three paragraphs270 of the Interim Report referring to the Panel's analysis of the consistency of two (out of 18) measures at issue with Article XI:1 of the GATT 1994 and that would allegedly represent instances of such a disparity. We shall therefore consider Indonesia's request for review with respect to the three paragraphs it mentioned.
6.14.
We commence with paragraph 7.84, where the Panel assessed Indonesia's reliance upon Article 11 of MOT 71/2015 in seeking to respond to allegations about the time it takes to receive an Import Approval, in the context of our analysis of Measure 1 under Article XI:1 of the GATT 1994. In particular, Indonesia had attempted to persuade the Panel that, contrary to the explicit text of Article 13(A) of MOT 16/2013, as amended, Import Approvals were not issued at the beginning of each semester, but rather, within two days after the requests are received by the Ministry of Trade. In paragraph 7.84, we amply discussed why Indonesia's argument was inapposite to prove its point. First, we recalled that MOT 71/2015 was issued after the establishment of this Panel and is therefore not within our terms of reference. Furthermore, as the Panel remarked, there is nothing in Article 11 of MOT 71/2015 that would support Indonesia's contention that Import Approvals are issued within two days after the requests are received by the Ministry of Trade. Indeed, as we pointed out in the Interim Report, this provision does not touch upon the timeframes for the issuance of Import Approvals. In this sense, we fail to see how Article 11 of MOT 71/2015 constitutes an example of the Agency's regular practice as Indonesia is arguing.
6.15.
Concerning paragraph 7.91, we note that it includes our conclusion where we agree with the co-complainants that the way Measure 1 is designed and structured results in a limitation of the competitive opportunities of importers in practice because it restricts the market access of imported products into Indonesia. Unlike Indonesia appears to be arguing, we do not simply "adopt the co-complainants' assertions that importers, in practice, are limited by operation of Indonesia's import licensing regime".271 Rather, we concur with the co-complainants' view after having duly examined the design, architecture and revealing structure of Measure 1.272
6.16.
Regarding paragraph 7,151, Indonesia argued that, in our analysis, the Panel accepted the arguments of the co-complainants that "administrative practice" is more persuasive than the plain text of the regulation.273 We disagree with this interpretation of our findings. As evidenced in paragraphs 7,151 to 7,155, in reaching the conclusion that Measure 4 is inconsistent with Article XI:1 of the GATT 1994, the Panel examines the design, architecture and revealing structure of Measure 4 in the light of the evidence submitted by the parties. We note that, in this analysis, we did not refer to "administrative practice" but only to the fact that while there was no express numerical limit set out in the text of the regulation, the consequence of temporarily limiting importations was that of a quantitative restriction prohibited under Article XI:1 of the GATT 1994.
6.17.
For these reasons, the Panel declines to make the changes suggested by Indonesia.

6.7 PRELIMINARY ISSUES AND CLAIMS PURSUANT ARTICLE XI:I OF THE GATT 1994

6.18.
Regarding paragraphs 7.10, 7.15, 7.20, 7.23, and 7,175, the United States requested the Panel to make some changes in the language used when describing its arguments on the grounds that the United States had not referred to volumes of imports in its submissions with respect to these measures, but referred more generally to the limiting effect on importation.274 No other party has commented on this request. The Panel made adjustments accordingly in paragraphs 7.10, 7.15, 7.20, 7.23 and 7,175.

6.8 CLAIMS PURSUANT ARTICLE XI:I OF THE GATT 1994

6.19.
Regarding paragraphs 7.73, 7,101, 7,122, 7,166, 7,310, 7,337 and 7,363, the United States suggested that the Panel may wish to choose a consistent formulation when describing the "task before the Panel"275 in the referred paragraphs. The United States requested that the Panel revise the mentioned paragraphs to conform to the language used by the Panel in its interpretation of Article XI:1 of the GATT 1994, in particular, to eliminate the reference to the limiting effect on the volume of imports and refer instead to the limiting effect on importation.276 The United States also asked that the Panel, in using the phrase "limiting effect on imports" or "limiting condition on imports" throughout the Final Report, replace the word "imports" so that the phrases would read "limiting effect on importation" and "limiting condition on importation."277 No other party has commented on this request. The Panel made adjustments accordingly in paragraphs 7.73, 7,101, 7,122, 7,166, 7,310, 7,337 and 7,363, where appropriate.

6.9 INCENTIVES CREATED BY THE MEASURES AT ISSUE

6.20.
Regarding the Panel's analysis of the measures at issue, Indonesia requested that the Panel be explicit regarding the incentives created by each element of the relevant measure at issue when reference is made to such incentives driving private behaviour.278 In particular, Indonesia noted that, in the context of Measure 2, the challenged measure includes several elements, i.e. quantity, product type and country of origin. With respect to quantity, Indonesia submitted that importers were previously incentivized to comply with a fixed quantity term in their import licences by the imposition of penalties associated with failure to achieve the 80% realization requirement. Indonesia asked the Panel to elaborate on its understanding of the incentives it perceives with respect to the quantity term of Measure 2 in order to provide clarity to Indonesia regarding the steps it needs to take to bring its measures into compliance given that this requirement is no longer in effect.279
6.21.
The co-complainants objected to Indonesia's request.280 For New Zealand, the Panel has appropriately made findings under Article XI:1 of the GATT 1994 on the basis of the overall "design, architecture and revealing structure" of the challenged measures and has provided extensive reasoning for these findings in the Interim Report.281 New Zealand also submitted that it considered that the Panel had discharged its function under its terms of reference by making findings based on the measures as set out in the co-complainants' panel requests and that Indonesia's request to provide further elaboration is not necessary in order for the Panel to discharge its function.282
6.22.
Similarly, the United States considered that the Panel has made sufficient findings with respect to the operation of the measures to which Indonesia refers and disagrees with Indonesia's request that additional findings are necessary. For the United States, the Panel has already elaborated on the findings with regard to the challenged measures that create incentives and inducement to private actors.283 The United States also submitted that, to the extent that Indonesia is requesting the Panel to opine on whether Indonesia has already brought its measures into compliance, such a request goes beyond this Panel's term of reference.284
6.23.
As with its prior request, Indonesia's request that we be more explicit regarding the incentives created by each element of the measures at issue when reference is made to such incentives driving private behaviour is crafted in very general terms. No specific references is made to the paragraphs or wording that Indonesia wishes us to review, apart from a reference to Measure 2 and paragraph 7,109 of our Interim Report. As explained in paragraph 6.13 above, we shall address Indonesia's comments that relate to "precise aspects" of the Interim Report. In this instance, we address the comments concerning Measure 2 in paragraph 7,109 of our Interim Report.
6.24.
In this respect, we recall that we have examined in detail the design, architecture and revealing structure of Measure 2 in paragraphs 7,104 to 7,110 of the Interim Report and thus consider that we have already provided extensive reasoning in our findings. Furthermore, in the event that Indonesia is asking us to assess the impact of a repeal of the 80% realization element of Measure 3 with respect to Measure 2, we also recall that our terms of reference included the measures at issue at the time of this Panel's establishment. Therefore, establishing whether Indonesia has repealed an element of Measure 3 (80% realization requirement) and its relevance in terms of compliance with the WTO Agreement is not within our terms of reference. We thus decline Indonesia's request to provide further clarification.

6.10 WHETHER MEASURE 1 (LIMITED APPLICATION WINDOWS AND VALIDITY PERIODS) IS INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994

6.25.
Regarding paragraph 7.87, Indonesia requested the Panel to clarify its analysis with respect to the role of geographical location in the design, architecture and revealing structure of Indonesia's import licensing regime. In particular, Indonesia asked whether the Panel is suggesting that the application windows and validity periods that would allow some but not all Members to engage in continuous importation due to relative proximity would nonetheless be inconsistent with Article XI:1 of the GATT 1994.285 For Indonesia, a measure cannot be inconsistent with respect to certain Members but not to others, depending on their proximity.286 Indonesia thus argued that it is unclear how Indonesia is meant to take into account the various geographical limitations of all of its trading partners in designing an import licensing regime.287
6.26.
The co-complainants objected to Indonesia's request.288 New Zealand disagreed with Indonesia's reading of the Interim Report and considered that the Panel's findings are clear in this regard.289 New Zealand noted that, with respect to Measure 1, the Panel expressly states that "the effect on importation can be attributed to the intrinsic elements of Measure 1"290, confirming that the restrictive effect of the measure is a consequence of the intrinsic features of the measure itself, not the geographical proximity of exporting Members.291 For New Zealand, the Panel found that the challenged measures are by their design inconsistent with Article XI:1 of the GATT 1994, irrespective of the geographic circumstances of an exporting Member. In its view, the Panel did not find that a measure may be inconsistent with respect to certain Members but not inconsistent as to others, depending on their proximity to Indonesia; nor did it find that a measure was "more inconsistent toward[s] some Members than others" as Indonesia contends.292
6.27.
For the United States, Indonesia mischaracterized the Panel's findings since the Panel has found that Measure 1 is a limitation on importation because of its intrinsic elements. The United States pointed out that the Panel further supported its finding by noting the negative effects of Measure 1 on the competitive opportunities of imported products.293 The United States argued that these elements apply to importers from every WTO Member regardless of their geographic location294 and that, contrary to Indonesia's assertion, the Panel did not find that Measure 1 is more inconsistent towards some Members than others.295
6.28.
Concerning paragraph 7.87, we observe that Indonesia interpreted this paragraph of our analysis as meaning that the "the measure might be inconsistent with respect to certain Members, but not as to others…"296 and thus argued that a measure cannot be more inconsistent towards some Members than to others.297 We agree with Indonesia that a measure cannot be more inconsistent towards some Members than to others. This is not, however, our conclusion with respect to Measure 1 and we thus disagree with Indonesia's reading of our findings of inconsistency with Article XI:1 of the GATT 1994 in respect of Measure 1. Indeed, in paragraph 7.86, we explicitly concluded that the effect of Measure 1 on importation "can be attributed to the intrinsic elements of Measure 1". Accordingly, we see no basis for Indonesia's interpretation of our findings and we thus decline Indonesia's request to provide further clarification.

6.11 WHETHER MEASURE 3 (80% REALIZATION REQUIREMENT) IS INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994

6.29.
Referring to paragraph 7,131, Indonesia requested the Panel to either provide an analysis regarding the impact of the realization requirement, and its repeal, vis-à-vis the restrictive effects of other measures, or explicitly state that the Panel declines to provide such analysis.298 Indonesia explained that the Panel's discussion of the realization requirement contains implications for other Measures and that Indonesia understands the Panel to be stating that the effects of Measures 2, 3 and 7 are, to some degree, dependent upon each other. In this respect, Indonesia argued that it understands that the removal of the realization requirement will therefore alter the impact of Measures 2 and 7.299
6.30.
The co-complainants objected to Indonesia's request.300 In New Zealand's view, it is clear from the Interim Report that the Panel's findings of inconsistency in respect of each of the measures at issue are not "dependent" upon the operation of any other measures.301 For New Zealand, the Panel made clear in its Interim Report that each of the measures at issue in this dispute are, when viewed as stand-alone measures, inconsistent with Article XI:1 of the GATT 1994.302 New Zealand submitted that, although the Panel observed that the "limiting effects of the fixed terms imposed by Measure 2 are enhanced by its interaction with Measure 3"303 and that the limiting effect of certain measures is "exacerbated" when combined with other measures304, this fact was not determinative of the Panel's finding that each of the individual measures at issue is inconsistent with Article XI:1 in its own right.305
6.31.
In the same vein, the United States submitted that, although the Panel found that the 80% realization requirement exacerbates the limiting effects of the other measures306, the Panel first found each measure to breach Article XI:1 of the GATT 1994 based on its own design, architecture and revealing structure and supporting evidence.307 The United States further submitted that the Panel has made sufficient findings regarding Measures 2 and 7 to support its conclusion under Article XI:1, independent of any exacerbating effect created by Measure 3.308 Lastly, the United States argued that, to the extent that Indonesia is requesting the Panel to find that, by removing the 80% realization requirement, Indonesia has already brought its measure into compliance, the United States was of the view that such a request went beyond the Panel's terms of reference.309
6.32.
With respect to paragraph 7,131, we observe that it includes our analysis of Measure 3 in the context of Indonesia's import licensing regime for horticultural products and in particular of Measures 2 and 7. This analysis follows our conclusion in the previous paragraph that the design, architecture and revealing structure of Measure 3 shows that this measure has a limiting effect in terms of volume of imports of horticultural products into Indonesia. Indonesia is asking us to "either (i) provide analysis regarding the impact of the realization requirement (and its repeal) vis-à-vis the restrictive effects of other measures; or (ii) explicitly state that the Panel declines to provide such analysis".310 As explained in paragraph 6.24 above, our terms of reference included the measures at issue at the time of this Panel's establishment. Therefore, establishing whether Indonesia has repealed an element of Measure 3 and its relevance in terms of compliance with the WTO Agreement is not within our terms of reference. We thus decline Indonesia's request.

6.12 WHETHER MEASURE 5 (STORAGE OWNERSHIP AND CAPACITY REQUIREMENTS) IS INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994

6.33.
With respect to paragraphs 7,175 to 7,178, Indonesia requested the Panel to explicitly confirm that its analysis is limited to the specific storage ownership and capacity terms challenged by the co-complainants and is not generally applicable to all pre-importation storage requirements. In particular, Indonesia wanted to confirm that the Panel is not making any findings with respect to whether requiring importers to obtain storage prior to importation is per se inconsistent with Article XI:1.311
6.34.
The co-complainants objected to Indonesia's request.312 New Zealand considered that Indonesia's request should be declined because the scope of the Panel's findings in respect of Measure 5 is clear from the Interim Report. In New Zealand's view, it would not be appropriate for the Panel, in light of its terms of reference, to make statements regarding the applicability or otherwise of its analysis to measures that are outside its terms of reference.313 The United States also considered that the Panel's finding and recommendation on Measure 5 appear to be clear. The United States further considered that Indonesia has not identified any ambiguity or error that would require the Panel to revise its Interim Report.314
6.35.
We note that paragraphs 7,175 to 7,178 of our Interim Report include part of our analysis of the consistency of Measure 5 with Article XI:1 of the GATT 1994. Indonesia is asking us to clarify the scope of that analysis in terms of the relevant measure. In our view, the scope of Measure 5 is clearly defined in paragraph 7,170 and, by reference, in Section 2.3.2.5 above. We are therefore only concluding that Measure 5, as defined in paragraph 7,170 and, by reference, in Section 2.3.2.5 above, is inconsistent with Article XI:1 of the GATT 1994. We thus decline Indonesia's request.

6.13 WHETHER MEASURE 6 (USE, SALE AND DISTRIBUTION REQUIREMENTS FOR HORTICULTURAL PRODUCTS) IS INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994

6.36.
Regarding paragraph 7,180, New Zealand suggested that the last sentence of this paragraph include a reference to the limiting effect through the additional distribution layer, which according to New Zealand, was raised in paragraph 252 of New Zealand's first written submission.315 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,180.

6.14 WHETHER MEASURE 10 (PROHIBITION OF IMPORTATION OF CERTAIN ANIMALS AND ANIMAL PRODUCTS) IS INCONSISTENT WITH ARTICLE XI:I OF THE GATT 1994

6.37.
Regarding paragraph 7,271, New Zealand suggested that the first sentence of this paragraph be amended to reflect New Zealand's submission that the positive list also operates to prohibit imports of bovine carcass and secondary cuts.316 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,121.
6.38.
Regarding paragraph 7,290, New Zealand suggested that the second sentence of this paragraph be clarified to reflect New Zealand's submissions that carcass and secondary cuts are the only unlisted products which state-owned enterprises may be directed to import.317 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,290.

6.15 WHETHER MEASURE 13 (80% REALIZATION REQUIREMENT) IS INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994

6.39.
Regarding paragraph 7,374, New Zealand suggested that for clarity, the word "with" be inserted in the first sentence of this paragraph and the current word "with" be replaced with the word "to".318 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,374.

6.16 WHETHER MEASURE 15 (DOMESTIC PURCHASE REQUIREMENT FOR BEEF) IS INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994

6.40.
Regarding paragraph 7,401, New Zealand suggested that the penultimate sentence of this paragraph be clarified to reflect paragraph 138 of New Zealand's second written submission by deleting the word "misleading."319 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,401.

6.17 WHETHER MEASURE 16 (BEEF REFERENCE PRICE) IS INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994

6.41.
Regarding paragraph 7,443, in particular footnote 1313 referenced at the end of the second sentence, New Zealand noted that this footnote appears to have been deleted.320 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,443.

6.18 WHETHER MEASURE 18 (SUFFICIENCY OF DOMESTIC PRODUCTION TO FULFIL DOMESTIC DEMAND) IS INCONSISTENT WITH ARTICLE XI:1 OF THE GATT 1994

6.42.
Regarding paragraph 7,480, New Zealand noted that there appears to be a footnote missing at the conclusion of this paragraph, referring to New Zealand arguments."321 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,480.

6.19 WHETHER MEASURE 3 (80% REALIZATION REQUIREMENT) IS JUSTIFIED UNDER ARTICLE XX(D) OF THE GATT 1994

6.43.
Regarding paragraph 7,600, New Zealand suggested that, in the sixth sentence of this paragraph, the phrase "New Zealand does not consider it necessary to elaborate on a less trade-restrictive measure" be amended to read "New Zealand does not consider it necessary to elaborate on a less trade-restrictive alternative measure" in order to ensure consistency with New Zealand's second written submission.322 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,600.

6.20 WHETHER MEASURE 4 (HARVEST PERIOD REQUIREMENT) IS PROVISIONALLY JUSTIFIED UNDER ARTICLE XX(B) OF THE GATT 1994

6.44.
Regarding paragraph 7,634, the United States submitted that, in the context of the second sentence of this paragraph, the meaning of the phrase "sufficiency of domestic production fulfils domestic demand" is unclear and would suggest an alternative formulation such as: "to ensure that the sufficiency of domestic production is protected from competition from importsfulfils domestic demand" or "to ensure that onlythe sufficiency of domestic production is used to fulfills domestic demand."323 No other party has commented on this request. The Panel agrees with the United States that the existing wording may lack clarity and is thus redrafting the relevant sentence in paragraph 7,634 as follows: "Rather, the evidence points to the objective as being to ensure that no importation takes place unless Indonesian authorities deem domestic production insufficient to fulfill domestic demand".

6.21 WHETHER MEASURE 6 (USE, SALE AND DISTRIBUTION REQUIREMENTS FOR HORTICULTURAL PRODUCTS) IS JUSTIFIED UNDER ARTICLE XX(D) OF THE GATT 1994

6.45.
Regarding paragraph 7,756, New Zealand suggested that a sentence be added to the end of the paragraph in order to show that New Zealand considered a less trade restrictive alternative measure for the use, sale and distribution requirement in paragraph 261 of its second written submission.324 No other party has commented on this request. The Panel made adjustments accordingly in paragraph 7,757.

6.22 CONCLUSION CONCERNING INDONESIA'S DEFENCE UNDER ARTICLES XX(A), (B) AND (D) WITH RESPECT TO MEASURES 9 THROUGH 17

6.46.
Regarding paragraph 7,829, the United States stated that, in order to further support the Panel's overall conclusion that Indonesia has not demonstrated that its restrictions on animals and animal products are justified under any claimed exception under Article XX, the United States would welcome findings addressed to the lack of a rational connection and the legal consequence that each measure has not been shown to be "necessary."325 In the same vein, New Zealand requests that, for completeness, it would be useful if the Panel sets out the parties' arguments and completes the Panel's analysis of Indonesia's defences under the relevant subparagraphs of Article XX of the GATT 1994 in relation to all challenged measures.326
6.47.
While we understand the co-complainants' concerns about completing the analysis, we consider that, having found that all the relevant measures at issue are not applied in a manner consistent with the chapeau of Article XX of the GATT 1994, continuing the analysis would be unwarranted. As we explained in paragraph 7,829, compliance with the chapeau of Article XX is a necessary requirement in order for a measure to find justification under this provision. Therefore, even if the measures were found to be "necessary" under subparagraphs (a), (b) and/or (d) of Article XX, Indonesia would not be able to rely upon these defences because the measures are not applied in a manner consistent with the chapeau. In the event that the Appellate Body were to disagree with our findings in this respect, the Panel has sufficiently developed the record so as to allow for the completion of the analysis should the Appellate Body deem it necessary. We thus decline the co-complainants' request.

7 FINDINGS

7.1 PRELIMINARY ISSUES

7.1.1 Request for enhanced third-party rights

7.1.
As described in Section 1.3.2 above, Australia, Brazil, Canada and the European Union jointly requested the Panel to enhance their third-party rights. The decision of the Panel is reproduced hereafter:

The Panel refers to the joint communication dated 2 December 2015 from Australia, Brazil, Canada and the European Union (hereafter "the requesting third parties"), requesting the Panel to exercise its discretion under Article 12.1 of the DSU to modify its Working Procedures. The requesting third parties wish the Panel to grant them additional rights to those provided in Article 10 of the DSU, in particular: (i) "to receive an electronic copy of all submissions and statements of the parties, including responses to Panel questions, up to the issuance of the interim report"327; and (ii) "to be present for the entirety of all substantive meetings of the Panels with the parties".328 The requesting third parties submit that, in order to ensure that their interests are fully taken into account, "third parties need to be aware of arguments and evidence that will be presented only in later stages in the dispute".329

Responding to the Panel's invitation to present their views on this request, both the United States330 and Indonesia331 opposed the granting of enhanced rights to third parties in these proceedings. New Zealand, however, informed the Panel that it supports the request.332 In other words, the complainant (United States) and the respondent (Indonesia) in DS478 are in agreement in opposing the granting of enhanced third party rights, while in DS477, only the respondent (Indonesia) opposes it.

We understand that the additional rights requested are limited to allowing the third parties to be present during all substantive meetings without taking the floor, and to receiving all written communications of the parties without the right to present views on those communications. The requesting third parties are thus not seeking to have an active role in the proceedings outside the participatory rights already foreseen in our Working Procedures, which are in line with Article 10 of the DSU.

In our decision, we bear in mind that, although we enjoy discretion to grant additional rights to third parties as long as such rights are consistent with the DSU and due process333, we must be mindful of the distinction drawn in the DSU between parties and third parties, which should notbe blurred.334 We note in this respect that, consistent with Article 10.2 of the DSU, all third parties in a panel proceeding may be presumed to have a "substantial interest" in the matter before the panel.335 We are aware that panels have on occasion granted additional third party rights in certain circumstances, which could, for instance, include situations where the measures at issue result in significant economic benefits for certain third parties336; situations where third parties maintain measures similar to the measures at issue337, or where practical considerations arise from a third party's involvement as a party in a parallel panel proceeding.338 As we explain below, we are not persuaded that the circumstances of the request before us would warrant the granting of enhanced third party rights.

The requesting third parties argue that the present disputes raise important questions about the extent of regulation of agricultural imports permissible under WTO rules, including Articles III and XI of the GATT 1994 and Article 4.2 of the Agreement on Agriculture, which are of particular significance to the requesting Members who are all major agricultural exporters. As pointed out by the United States, numerous WTO Members export agricultural products and therefore have "a collective interest in the interpretation of covered agreements".339 We also concur with the United States' assessment that the requesting third parties "have provided no basis for an assertion that this dispute differs from any other dispute in which other Members may have systemic interests".340

The requesting third parties also argue that the present disputes involve measures of particular trade and economic significance to the requesting Members as major exporters of agricultural products. Furthermore, they contend that the outcome of these disputes will have significant implications for broader agricultural trade between Indonesia and the requesting Members because Indonesia maintains similar measures on the importation of a wide range of agricultural products other than the products at issue in the present disputes. In the absence of further details in this respect, we are unable to see how such interests differ from the collective interests of other exporting Members.

We also note their argument that these disputes will consider measures that are "very similar"341 to some of those at issue in Indonesia – Measures Concerning the Importation of Chicken Meat and Chicken Products (WT/DS484), in which Brazil is the complainant and Australia, Canada, and the European Union are likely to be third parties. As we understand it, DS484 deals with Indonesia's import licensing regime for chicken meat and chicken products, and appears to focus on claims under the SPS and the TBT Agreements. This is not the case for the matters before us. Although there appears to be some overlap with measures in DS484, we do not consider that the disputes before us are sufficiently similar to DS484 to warrant according enhanced third party rights to potential third parties in that dispute.

Finally, we note that prior panels have consistently denied requests for enhanced third-party rights where the parties were unanimously opposed to it.342 We therefore consider it appropriate to give due regard to the parties' shared view in DS478 that the Panel should decline the third parties' request for enhanced third-party rights. Having so decided and considering the close association between DS478 and DS477 and the fact that the disputes have been joined under Article 9.1 of the DSU, we would find it difficult to decide differently with respect to DS477.

We therefore decline Australia, Brazil, Canada and the European Union's joint request for enhanced third party rights in these proceedings.

7.1.2 Request for a preliminary ruling

7.2.
On 11 December 2015, Indonesia submitted to the Panel a request for a preliminary ruling concerning the consistency of New Zealand's and the United States' panel requests and first written submissions with the requirements of the DSU.343 On 27 January 2016, the Panel communicated its conclusions on Indonesia's request and, on 5 July 2016, the Panel issued its preliminary ruling to the parties with copy to the third parties. The Panel's preliminary ruling of 5 July 2016 is an integral part of this panel Report and is included in Annex A-1.

7.1.3 Whether certain challenged measures are the result of decisions of private actors

7.1.3.1 Introduction

7.3.
Before examining the various claims put forward by New Zealand and the United States and the defence advanced by Indonesia, the Panel wishes to clarify the scope of its terms of reference in these proceedings. In particular, whether, as Indonesia argued, certain measures pertaining to its import licensing regime for horticultural products, namely Measures 1 (Limited application windows and validity periods), 2 (Periodic and fixed import terms), 3 (80% realization requirement) and 5 (Storage ownership and capacity requirements); as well as similar measures relating to its regime for animals and animal products, i.e. Measures 11 (Limited application windows and validity periods), 12 (Periodic and fixed import terms) and 13 (80% realization requirement), are "the result of decisions of private actors".344
7.4.
Indonesia has put forward this contention as part of its argumentation under Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture. In particular, Indonesia argued that the challenged measures are the result of private actions and not measures instituted or maintained by a Member within the meaning of these provisions. We note that the issue of whether the challenged measures constitute private actions runs to the core of our jurisdiction because only measures "taken by a Member" can be challenged under the DSU. We thus proceed to examine Indonesia's contention to ascertain whether Measures 1, 2, 3, 5, 11, 12 and 13 are measures subject to the DSU and therefore within our jurisdiction.

7.1.3.2 The relevant provision

7.5.
Pursuant to Article 3.3 of the DSU, the dispute settlement system addresses "situations in which a Member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired by measures taken by another Member".345 In US – Corrosion-Resistant Steel Sunset Review, the Appellate Body considered that this phrase "identifies the relevant nexus, for purposes of dispute settlement proceedings, between the 'measure' and a 'Member'".346 The Appellate Body further confirmed that, "[i]n principle, any act or omission attributable to a WTO Member can be a measure of that Member for purposes of dispute settlement proceedings" and that "[t]he acts or omissions that are so attributable are, in the usual case, the acts or omissions of the organs of the state, including those of the executive branch."347 This does not however exclude that the acts or omissions of regional or local governments, or even the actions of private entities, could be attributed to a Member in particular circumstances.348
7.6.
It is clear that the concept of "measure" subject to WTO dispute settlement is broad. However, regardless of the type of measure challenged, it must meet the requirement of attribution to a Member in order to be subject to WTO dispute settlement.349 Nonetheless, this does not exclude from scrutiny under the DSU those decisions of private actors that are not independent of a measure of a Member.350 As the Appellate Body in Korea – Various Measures on Beef explained "the intervention of some element of private choice does not relieve [a Member] of responsibility under the GATT 1994".351 The Appellate Body in US – COOL further explained:

[W]hile detrimental effects caused solely by the decisions of private actors cannot support a finding of inconsistency […], the fact that private actors are free to make various decisions in order to comply with a measure does not preclude a finding of inconsistency. Rather, where private actors are induced or encouraged to take certain decisions because of the incentives created by a measure, those decisions are not "independent" of that measure.352

7.7.
With that in mind, we proceed to examine whether, as alleged by Indonesia, Measures 1, 2, 3, 5, 11, 12 and 13 are the result of independent decisions of private actors or, rather, are actions "taken by" Indonesia. We note that the parties have offered similar arguments in respect of those measures embodying analogous features, albeit they relate to different import licensing regimes (horticultural products, and animals and animal products). Given the similar nature of the measures, it is not necessary to examine them individually to determine whether or not they are measures "taken by" Indonesia. Hence, we examine them jointly below.

7.1.3.3 Measures 1 and 11 (Limited application windows and validity periods)

7.8.
With respect to Measures 1 and 11, Indonesia argued that the limited application windows and validity periods do not cut off imports at the beginning or end of the validity period and that importers decide of their own accord not to ship their products after a certain date.353 New Zealand responded that it is Indonesia's regulations that limit imports and constrain the private decisions of importers through the limited application windows and validity periods, which are clearly set out in those regulations.354 Likewise, the United States submitted that Indonesia' assertion that any limitation is self-imposed by private actors is incorrect because Indonesia's import licensing regime forces importers to halt shipments four to six weeks before the end of the validity period.355
7.9.
As described in Section 2.3.2.1 above, Measures 1 and 11 consist of the combination of limited application windows and validity periods as regulated by Article 13 of Regulation MOA 86/2013 Articles 13A,14, 21, 22 and 30356 of MOT 16/2013, as amended; and Article 29 of MOA 139/2014, as amended by MOA 2/2015, and Articles 12 and 15 of MOT 46/2013, as amended, respectively. These regulations stipulate the periods during which importers may request the necessary authorisations to import horticultural and animal and animal products into Indonesia, as well as the periods of validity of those authorisations once granted. Accordingly, importers wishing to import into Indonesia must apply for the necessary authorizations during the periods stipulated by the regulations encompassing Measures 1 and 11. Likewise, once they have obtained the necessary authorizations, importers can only import the authorized products during the validity period that has been granted according to those same regulations.
7.10.
We observe that the co-complainants are challenging Measures 1 and 11 because, by structuring the various periods in a certain manner, these measures allegedly have a limiting effect on importation.357 In our view, the co-complainants are not challenging the results of the decisions of private actors; rather, they are challenging the Measures that impose the various deadlines that importers must respect in order to be able to import into Indonesia.
7.11.
We agree with New Zealand that the fact that private actors are able to make decisions about their import needs does not immunize Indonesia's measures from challenge.358 As we have explained above, the intervention of some element of private choice does not necessarily relieve a Member of responsibility under the covered agreements.359 We recall the Appellate Body's explanation that "where private actors are induced or encouraged to take certain decisions because of the incentives created by a measure, those decisions are not 'independent' of that measure".360 We do not however think that this is the case with respect to Measures 1 and 11 because the co-complainants are challenging the limited application windows and validity periods as set out in Indonesia's regulations. They are not challenging the results of decisions taken by importers.
7.12.
We thus conclude that Measures 1 and 11 (limited application windows and validity periods) as set out in the relevant regulations are measures "taken by" Indonesia and thus subject to the DSU and therefore within our jurisdiction.

7.1.3.4 Measures 2 and 12 (Periodic and fixed import terms)

7.13.
With respect to Measures 2 and 12, Indonesia argued that because the terms are selected by importers and they are free to alter their terms of importation from one period to the other, any restriction is self-imposed and these terms do not constitute "measures instituted or maintained by a Member" within the meaning of Article XI:1 of the GATT 1994.361 It further argued that the terms of import licences fall outside the scope of Article 4.2 of the Agreement on Agriculture because they are determined by private parties and not by Indonesia.362 New Zealand responded that the measures challenged in this dispute are not in fact commercial decisions of private actors, but rather, those reflected in Indonesia's laws and regulations which prevent importers from making ordinary commercial decisions and serve to limit imports.363 The United States clarified that the measures that the co-complainants are challenging are not the specific terms of any or each importer’s licence but, rather, the inability of importers, once an Import Approval validity period has begun, to import products of a different type, quantity, country of origin, or port of entry than those specified on their import permits.364
7.14.
As described in Sections 2.3.2.2 and 2.3.3.3 above, Measures 2 and 12 consist of periodic and fixed import terms requirements implemented by means of Article 6 of MOA 86/2013 and Article 13 and 30 of MOT 16/2013, as amended; and Articles 30 and 33(a)-(b) and 39(e) of MOA 139/2014, as amended, and Article 30 of MOT 46/2013, as amended. These regulations provide that the importation of horticultural products or animals and animal products must be done exclusively within the terms, such as the type and quantity of products, the ports of entry etc, of the relevant import authorizations (RIPHs/MOA Recommendations and Import Approvals) and that these terms cannot be changed during the validity period of those authorizations.
7.15.
We observe that the co-complainants are challenging Measures 2 and 12 because they allegedly constitute restrictions having a limiting effect on importation of horticultural products and animals and animal products imported into Indonesia and limit the competitive opportunities of importers and imported products.365 Indonesia's contention, however, seems to rest upon the assumption that the co-complainants take issue with the actual terms chosen by importers, which are in principle the result of private choices by importers. To us, Indonesia's characterization of Measures 2 and 12 does not correspond to the measures challenged by the co-complainants. Indonesia appears to be confounding the actual terms chosen by individual importers with the challenged measures per se. The co-complainants are not challenging the actions taken by importers but rather Indonesia's own regulations imposing fixed terms on importers.
7.16.
While the co-complainants do refer to the actions of importers in their argumentation that Measures 2 and 12 constitute quantitative restrictions, as explained in paragraph 7.11 above, decisions of private actors are not independent of a measure when those decisions are the result of incentives created by the measure. We do not however think that this is the case with respect to Measures 2 and 12 because the co-complainants are explicitly challenging the regulations imposing periodic and fixed terms. They are not challenging the results of decisions taken by importers.
7.17.
We thus conclude that Measures 2 and 12 (Periodic and fixed import terms) as set out in the relevant regulations are measures "taken by" Indonesia and thus subject to the DSU and therefore within our jurisdiction.

7.1.3.5 Measures 3 and 13: 80% realization requirement

7.18.
With respect to Measures 3 and 13, Indonesia argued that the 80% realization requirement is not a restriction because it is a function of importers' own estimates and because it can be changed by the importer at will from one validity period to the next.366 New Zealand disagreed and submitted that Indonesia's argument is incorrect because the realization requirement is directly linked to the fixed terms importers must list on their import approval application for the validity period.367 Likewise, the United States contended that the realization requirement is not a function of importers' own estimate because the realization requirement itself forces importers to reduce their import volumes to ensure they meet the 80% threshold.368
7.19.
As described in Sections 2.3.2.3 and 2.3.3.4 above, Measures 3 and 13 consist of the 80% requirements implemented through Articles 14A, 24, 25A and 26 and 27A of MOT 16/2013, as amended; and Articles 13, 25, 26 and 27 of MOT 46/2013, as amended. Pursuant to these regulations, RIs are required to import at least 80% of the quantity specified for each type of horticultural product listed on their Import Approval for a given period of time.
7.20.
We observe that the co-complainants are challenging Measures 3 and 13 because they constitute restrictions allegedly having a limiting effect on importation of horticultural products and animals and animal products into Indonesia. In particular, the co-complainants are arguing that both Measures compel importers to limit their imports, by inducing them to reduce the amounts they request in their Import Approvals. We thus understand that, for the co-complainants, the limiting effect of Measures 3 and 13 derives from the fact that they encourage or induce importers to limit their volume of imports. Indonesia however argued that these Measures are a function of importers' own estimates. We recall that "where private actors are induced or encouraged to take certain decisions because of the incentives created by a measure, those decisions are not 'independent' of that measure".369 Accordingly, if the co-complainants prove that the importers actions are induced or encouraged by Measures 3 and 13, we will consider that those actions are not independent from the Measures themselves. This does not detract from the fact that Measures 3 and 13, as defined by the co-complainants and stipulated in the above-mentioned regulations, are measures taken by Indonesia.
7.21.
We thus conclude that the 80% realization requirements as set out in the relevant regulations are measures "taken by" Indonesia, and thus subject to the DSU and therefore within our jurisdiction.

7.1.3.6 Measure 5: Storage ownership and capacity requirements

7.22.
Concerning Measure 5, Indonesia argued that any limitations placed on an importer's ability to import caused by the storage capacity requirement for horticultural products are self-imposed.370 New Zealand responded that the storage ownership and capacity requirement dictates the quantity of product that may be imported. New Zealand argued that these restrictions are not the result of decisions by private actors; rather, Indonesia's import licensing regime drives the decision of importers and its laws and regulations frame the way in which importers take decisions.371. The United States submitted that importers do not choose to limit the products they import to a fraction of what they could bring in under normal market conditions. For the United States, their decision to self-restrict the quantity of imported products is a compelled response based on the requirements of Indonesia’s storage capacity measure.372
7.23.
As described in Section 2.3.2.5 above, Measure 5 consists of the storage ownership and capacity requirements regulated through Article 8(1)(e) of MOT 16/2013, as amended, and by Article 8(2)(c) and (d) of MOA 86/2013, as amended. Pursuant to these regulations, importers must own their storage facilities with sufficient capacity to hold the full quantity requested on their Import Application. We observe that the co-complainants are challenging Measure 5 because it allegedly constitutes a restriction having a limiting effect on importation of horticultural imports into Indonesia and limits the competitive opportunities of importers and imported products. With respect to the storage capacity requirement, Indonesia argued that any limitations placed on an importer's ability to import caused by this requirement are self-imposed.
7.24.
We note that the obligation to own storage facilities and that these are large enough to accommodate the full quantity requested on importers' Import Applications is provided for in the above regulations. Whether an importer decides to own a larger or smaller storage facility is a private decision which may be considered to result from the requirements imposed by Measure 5. We recall that "where private actors are induced or encouraged to take certain decisions because of the incentives created by a measure, those decisions are not 'independent' of that measure".373 Accordingly, if the co-complainants prove that the importers actions are induced or encouraged by Measure 5 and that their decisions are relevant for the purpose of our analysis, we will consider that those actions are not independent from the Measure itself. This does not detract from the fact that Measure 5, as defined by the co-complainants and stipulated in the above-mentioned regulations, is a measure taken by Indonesia.
7.25.
We thus conclude that the storage ownership and capacity requirements as set out in the relevant regulations are measures "taken by" Indonesia, and thus subject to the DSU and therefore within our jurisdiction.

7.1.3.7 Conclusion

7.26.
We therefore conclude that Measures 1, 2, 3, 5, 11, 12 and 13 are measures taken by Indonesia and not the result of independent decisions of private actors. Accordingly, Measures 1, 2, 3, 5, 11, 12 and 13 are measures subject to the DSU and therefore within our jurisdiction.

7.1.4 Order of analysis

7.27.
New Zealand and the United States put forward in their panel requests claims under Articles XI:1 and III:4 of the GATT 1994, Article 4.2 of the Agreement on Agriculture and Articles 2.2(a) and 3.2 of the Import Licensing Agreement. Indonesia raised defences under Articles XX(a),(b) and (d) of the GATT 1994 with respect to the claims of violation under Articles XI:1 and III:4 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture. Indonesia also invoked Article XI:2(c)(ii) of the GATT 1994 as a defence with respect to some of the claims of violation of Article XI:1. We must decide in which order we will analyse these claims and defences.
7.28.
We recall that panels have discretion in deciding the order of their analysis of parties' claims. The Appellate Body recognized this in Canada – Wheat Exports and Grain Imports when it stated that "[a]s a general principle, panels are free to structure the order of their analysis as they see fit. In so doing, panels may find it useful to take account of the manner in which a claim is presented to them by a complaining Member."374 We observe that, while their panel requests were identical, the co-complainants have followed a different order of analysis in their written submissions.375 Nonetheless, when asked by the Panel which order of analysis they thought we should follow, the co-complainants responded that the Panel should start its analysis with their claims pursuant to Article XI:1 of the GATT 1994 because, in the context of considering quantitative restrictions, Article XI:1 is more specific than Article 4.2 of the Agreement on Agriculture; and because a finding of violation of Article XI:1 without justification under Article XX of the GATT 1994, would be determinative to resolving the dispute.376 The co-complainants further proposed that we address Indonesia's defence under Article XX of the GATT 1994 and then turn to Article 4.2 of the Agreement on Agriculture.377 The United States submitted that, if the Panel were to find that Indonesia’s measures are justified under Article XX of the GATT 1994, it would not need to examine those measures under Article 4.2.378 We also note that both co-complainants have argued that Article XI:2(c)(ii) of the GATT 1994 is no longer available to Indonesia, as it has been superseded by the provisions of the Agreement on Agriculture.379
7.29.
New Zealand proposed that we then turn to the additional claims which only concern some of the measures at issue. In this respect, New Zealand considered that, in this dispute, it is appropriate for Article III:4 to be addressed after the claims under Articles XI:1 and 4.2, and the corresponding defences, have been determined.380 The co-complainants also suggested that the Panel considers the claims under Article 3.2 of the Import Licensing Agreement last.381 The United States nonetheless pointed out that, if the Panel finds that the two relevant measures challenged under this provision are found to be inconsistent with the GATT 1994 and the Agreement on Agriculture, it would not be necessary for the Panel to examine the claims under the Import Licensing Agreement.
7.30.
Indonesia, at first, asked the Panel to commence its analysis with Article 4.2 of the Agreement on Agriculture on grounds that this provision has a broader scope than Article XI:1.382 At the first substantive meeting, however, Indonesia indicated that the Panel could begin its analysis with Article XI:1 of the GATT 1994. In its second written submission, Indonesia stated that considerations of efficiency and judicial economy favour the Panel beginning its analysis with Article 4.2 of the Agreement on Agriculture.383 It also argued that because the co-complainants have failed to provide evidence that the challenged measures are not justified under Article XX, the "Panel cannot, as a matter of law, rule in the complainants' favor under Article 4.2".384
7.31.
In deciding the order of our analysis, we concur with the panel in India – Autos in that it is important to consider first whether a particular order is compelled by principles of valid interpretative methodology, which, if not followed, might constitute an error of law.385 Provisions from three separate covered agreements are challenged in these disputes, namely the GATT 1994, the Agreement on Agriculture and the Import Licensing Agreement. In EC – Bananas III, the Appellate Body articulated the test that should be applied in order to decide the order of analysis where two or more provisions from different covered agreements appear a priori to apply to the measure in question. The Appellate Body indicated that the provision from the agreement that "deals specifically, and in detail" with the measures at issue should be analysed first.386 We also bear in mind that the order we choose may have an impact on the potential to apply judicial economy.387
7.32.
We note that all 18 measures at issue have been challenged under Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture. We also note that, as pointed out by the United States, the co-complainants have brought identical claims under both provisions388; i.e. the allegation that all 18 measures constitute quantitative restrictions. We agree with the co-complainants that the provision which deals specifically with quantitative restrictions is Article XI:1 of the GATT 1994. Article 4.2 of the Agreement on Agriculture, on the contrary, has a broader scope and refers to measures other than quantitative restrictions. We note that this was also the view expressed by Australia and Canada at the third-party session; while Brazil, the European Union, and Japan signalled that they were comfortable with the Panel commencing its analysis under Article XI:1 of the GATT 1994.
7.33.
We will thus commence our examination with Article XI:1 of the GATT 1994. We note that this is the approach followed in all previous disputes where the complainants brought claims under Article XI:1 of the GATT 1994 and Article 4.2 of the Agreement on Agriculture and the respondent invoked a defence under Article XX.389 Given that Article XI:2(c)(ii) of the GATT 1994 concerns measures that may be excluded from the scope of the obligations in Article XI:1 of GATT 1994, we will address it in the context of our analysis of the latter. If we find that all or some of the measures are inconsistent with Article XI:1 of GATT 1994, we will examine Indonesia's defence pursuant to Article XX of the GATT 1994. We take this approach because if the measures were to be justified under this provision, we would not need to analyse the claims under Article 4.2 of the Agreement on Agriculture. Indeed, footnote 1 to Article 4.2 of the Agreement on Agriculture excludes from the scope of this provision those "measures maintained … under other general, non agriculture-specific provisions of GATT 1994". We consider that measures maintained under Article XX of the GATT 1994 are "measures maintained … under other general, non agriculture-specific provisions of GATT 1994" and therefore outside the scope of Article 4.2 of the Agreement on Agriculture.
7.34.
We note that, as indicated above, Indonesia argued that, because the co-complainants have failed to provide evidence that the challenged measures are not justified under Article XX, the "Panel cannot, as a matter of law, rule in the complainants' favor under Article 4.2".390 We understand Indonesia to be asking the Panel to invert the burden of proof under Article XX of the GATT 1994. As pointed out by New Zealand, it is well established in WTO jurisprudence following the Appellate Body decision in US – Wool Shirts and Blouses391 that the burden of identifying and establishing affirmative defences under Article XX rests on the party asserting the defence.392 Thus it is for Indonesia, and not the co-complainants, to establish the defence under Article XX of the GATT 1994.
7.35.
If the measures are not justified under Article XX, we will then proceed with the claims under Article 4.2 of the Agreement on Agriculture. Next, we will proceed to examine the additional claims that only concern some of the measures at issue. We will commence by the claim under Article III:4 of the GATT 1994, which has been made only with respect to three measures at issue. This will be followed by an analysis of the claims under the Import Licensing Agreement, which concern only two measures.
7.36.
A final point to decide is the order of our analysis with respect to the measures at issue; i.e. whether we should first address those measures pertaining to the import licensing regime for horticultural products or those measures pertaining to the regime for animals and animal products. In this respect, we note that the co-complainants agreed that there is no legal reason to start with one regime or the other; they did, however, suggest that we address each regime separately because, despite the similarity of some of the measures, each regime has its own specificities.393 Taking into account these comments, the Panel has decided to commence with the measures concerning the import licensing regime for horticultural products, to be followed by those for animals and animal products; this is also in line with the order chosen by the co-complainants in their panel requests.

7.2 CLAIMS PURSUANT TO ARTICLE XI:1 OF THE GATT 1994

7.2.1 Introduction

7.37.
The co-complainants have challenged 18 separate measures under Article XI:1 of the GATT 1994. We will begin by examining the relevant legal provision and the applicable legal standard. Before applying this standard to our assessment of the consistency of each of the 18 measures at issue with this provision, we will examine some preliminary issues raised by the parties.

7.2.2 The text of Article XI of the GATT 1994

7.38.
Article XI of the GATT 1994 provides, in relevant part:

General Elimination of Quantitative Restrictions

1. No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licences or other measures, shall be instituted or maintained by any Member on the importation of any product of the territory of any other Member or on the exportation or sale for export of any product destined for the territory of any other Member.

2. The provisions of paragraph 1 of this Article shall not extend to the following:

(a) …

(c) Import restrictions on any agricultural or fisheries product, imported in any form,* necessary to the enforcement of governmental measures which operate:

(i) …

(ii) to remove a temporary surplus of the like domestic product, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported product can be directly substituted, by making the surplus available to certain groups of domestic consumers free of charge or at prices below the current market level;…

7.39.
By its terms, this provision forbids Members to institute or maintain prohibitions and restrictions, be it through quotas, import or export licences, or other measures, on (i) the importation of any product of the territory of any other contracting party, or (ii) the exportation or sale for export of any product destined for the territory of any other contracting party. The provision explicitly excludes prohibitions or restrictions imposed through duties, taxes or other charges. The Appellate Body in Argentina – Import Measures described Article XI:1 of the GATT 1994 as "lay[ing] down a general obligation to eliminate quantitative restrictions" and prohibiting Members from "institut[ing] or maintain[ing] prohibitions or restrictions other than duties, taxes, or other charges, on the importation, exportation, or sale for export of any product destined for another Member."394

7.2.3 Legal standard under Article XI:1 of the GATT 1994

7.40.
Panels have traditionally conducted their examination of alleged inconsistencies with Article XI:1 of the GATT 1994 following a two-step analysis: they have examined first (i) whether the complainant has demonstrated that the measure at issue is a measure of the type covered by Article XI:1, and if it has so demonstrated, then they have considered (ii) whether the complainant has demonstrated that the measure at issue constitutes a prohibition or restriction on importation (or exportation).395 As explained by the Appellate Body, this analysis must be carried out on a case-by-case basis, taking into account the import (or export) formality or requirement at issue and the relevant facts of the case.396

7.2.3.1 Step 1: Whether the measure at issue falls within the scope of Article XI:1 of the GATT 1994

7.41.
The Panel is called upon as a first step to establish whether the co-complainants have demonstrated that Indonesia's measures constitute measures covered by Article XI:1 of the GATT 1994. The text of Article XI:1 defines its scope in both a negative and a positive manner. It commences by excluding from its scope a number of measures, namely "duties, taxes or other charges". Article XI:1 thus applies to "quotas, import or export licences" as well as a residual category of "other measures". The term "other measures" has traditionally been considered by prior panels as a "broad residual category".397 Under this understanding, panels have found that the concept of a restriction on importation covers any measures that result in "any form of limitation imposed on, or in relation to importation".398 The Appellate Body has confirmed that the expression "other measures" suggests that Article XI:1 has a broad coverage. Nonetheless, the Appellate Body has emphasized that the scope of application of this provision is not unfettered because it excludes "duties, taxes and other charges" and "Article XI:2 of the GATT 1994 further restricts the scope of application of Article XI:1 by providing that the provisions of Article XI:1 shall not extend to the areas listed in Article XI:2".399 As we explain in Section 7.2.4.2 below, Indonesia relied upon Article XI:2(c)(ii) to exclude some of the measures at issue from the scope of Article XI:1 of the GATT 1994.
7.42.
In order to determine whether a measure falls within the scope of Article XI:1 of the GATT 1994, the panel in Brazil – Retreaded Tyres considered that a panel must examine the "nature" of the measure.400 In Argentina – Import Measures, the panel considered that what is relevant when examining a measure under Article XI:1 of the GATT 1994 is whether a measure prohibits or restricts trade, rather than the means by which such prohibition or restriction is made effective.401 Interpreting the words "made effective through" quotas, import or export licences or other measures, the Appellate Body in Argentina – Import Measures explained that this suggests that the scope of Article XI:1 covers measures through which a prohibition or restriction is produced or becomes operative.402

7.2.3.2 Step 2: Whether the measure at issue constitutes a prohibition or restriction on importation within the scope of Article XI:1 of the GATT 1994

7.2.3.2.1 Prohibitions and restrictions having a limiting effect on importation

7.43.
If the examination under the first step reveals that the measures at issue fall under Article XI of the GATT 1994, then the Panel is called upon as a second step to establish whether the co-complainants have demonstrated that Indonesia's measures constitute "prohibitions" or "restrictions" on importation within the scope of Article XI:1 of the GATT 1994. In this respect, the Appellate Body has defined the term "prohibition" as a "legal ban on the trade or importation of a specified commodity" and the term "restriction" as "[a] thing which restricts someone or something, a limitation on action, a limiting condition or regulation" and thus, generally, as something that has a limiting effect.403 As to whether a restriction is "on the importation", the panel in India – Autos indicated that"[i]n the context of Article XI:1 [of the GATT 1994], the expression 'restriction … on importation' may … be appropriately read as meaning a restriction 'with regard to' or 'in connection with' the importation of the product".404
7.44.
Finding support in the title of Article XI "General Elimination of Quantitative Restrictions", the Appellate Body in Argentina – Import Measures explained that the use of the word "quantitative" suggests that only those prohibitions and restrictions that limit the quantity or amount of a product being imported (or exported) would fall within the scope of this provision:

The use of the word "quantitative" in the title of Article XI of the GATT 1994 informs the interpretation of the words "restriction" and "prohibition" in Article XI:1, suggesting that the coverage of Article XI includes those prohibitions and restrictions that limit the quantity or amount of a product being imported or exported.405 This provision, however, does not cover simply any restriction or prohibition. Rather, Article XI:1 refers to prohibitions or restrictions "on the importation … or on the exportation or sale for export". Thus, in our view, not every condition or burden placed on importation or exportation will be inconsistent with Article XI, but only those that are limiting, that is, those that limit the importation or exportation of products.406 Moreover, this limitation need not be demonstrated by quantifying the effects of the measure at issue; rather, such limiting effects can be demonstrated through the design, architecture, and revealing structure of the measure at issue considered in its relevant context.407

7.45.
Hence, only those prohibitions or restrictions that have a limiting effect on importation (or exportation) are covered by Article XI:1 of the GATT 1994. Prior panels have also similarly interpreted the concept of "restrictions" and have concluded that Article XI:1 is applicable to conditions which are "limiting" or have a "limiting effect".408 As to how to ascertain the limiting effects of a measure, the Appellate Body in Argentina – Import Measures has explained that this can be done through an analysis of its design, architecture, and revealing structure, in its relevant context.409
7.46.
When examining whether measures have a limiting effect on importation, some panels have focused on whether those measures limited the competitive opportunities available to imported products. Panels have thus given relevance to factors such as the existence of uncertainties affecting importation, whether the measures affect investment plans, restrict market access for imports or make importation prohibitively costly or unpredictable, whether they constitute disincentives affecting importations, or whether there is unfettered or undefined discretion to reject a licence application.410 In particular, the panel in Argentina – Import Measures found that some of Argentina's measures created "uncertainty as to an applicant's ability to import, d[id] not allow companies to import as much as they desire[d] or need[ed], but condition[ed] imports to their export performance and impose[d] a significant burden on importers that [was] unrelated to their normal importing activity".411 In reference to the panel report in Dominican Republic – Import and Sale of Cigarettes, the panel in Argentina – Import Measures noted that "not every measure affecting the opportunities for entering the market would be covered by Article XI [of the GATT 1994], but only those measures that constitute a prohibition or restriction on the importation of products, i.e. those measures which affect the opportunities for importation itself".412

7.2.3.2.2 Whether an adverse trade effect test is necessary for a determination under Article XI:1

7.47.
We recall that the Appellate Body in Argentina – Import Measures acknowledged that the limitation on imports "need not be demonstrated by quantifying the effects of the measure at issue".413 The Appellate Body explained that "such limiting effects can be demonstrated through the design, architecture, and revealing structure of the measure at issue considered in its relevant context".414 The exact meaning of this finding has been the source of disagreement among the parties.
7.48.
Indonesia argued that there is no breach of Article XI:1 of the GATT 1994 with respect to the measures at issue in this dispute because there is no adverse impact on trade flows415 and that, for a measure to constitute a "quantitative restriction", it must impose an "absolute limit" on imports.416 For Indonesia, just because Article XI:1 does not require precise quantification of the trade effects of a challenged measure does not mean a complainant is excused from demonstrating that the measure has some effect on trade.417 In Indonesia's view, in order to demonstrate a violation of Article XI:1 of the GATT 1994, a complainant must show through clear and convincing evidence that the measure at issue has a "limiting effect on importation"418, and it is not enough that the measure merely affects imports. In Indonesia's view, it is no excuse that complainants need not quantify the precise effect of the measure; complainants must demonstrate that a measure has a limiting effect on the quantity or amount of imports.419
7.49.
The co-complainants disagreed and stressed that, although they have demonstrated the severe trade impact of Indonesia's regime, the above finding of the Appellate Body indicates that an adverse impact on trade flows is not a necessary component of the legal test for a quantitative restriction.420 The United States recalled that the co-complainants can demonstrate a measure’s inconsistency with Article XI:1 by showing that its design, structure, and operation, in themselves, impose limitations on importation (actual or potential).421 New Zealand further indicated that, while not an essential part of the legal test under Article XI:1, the Panel may nonetheless use statistical data as evidence to inform its overall examination of whether a measure has a limiting effect. New Zealand added that this approach was confirmed by the Appellate Body in Peru – Agricultural Products where it noted that "evidence on the observable effects of the measure" can be considered but that a "panel is not required to focus its examination primarily on numerical or statistical data".422
7.50.
In our view, the wording of the Appellate Body Report in Argentina – Import Measures is straightforward: the limiting effect of the measures "need not be demonstrated by quantifying the effects of the measure at issue".423 Hence, contrary to Indonesia's position, the co-complainants are not obliged to demonstrate the limiting effects of the measures at issue by quantifying their effects though trade flows. On the contrary, the co-complainants can demonstrate the limiting effects of the measures "through the design, architecture, and revealing structure of the measure at issue considered in its relevant context".424 Nevertheless, while not required to do so, the co-complainants have presented data on trade flows425 that we will consider when examining each of the measures at issue. In this respect, we concur with New Zealand in that, while not an essential part of the legal test under Article XI:1 of the GATT 1994, the Panel may nonetheless use statistical data as evidence to inform its overall examination of whether a measure has a limiting effect. This was confirmed by the Appellate Body in Peru – Agricultural Products where it noted that "evidence on the observable effects of the measure" can be considered but that a "panel is not required to focus its examination primarily on numerical or statistical data".426

7.2.4 Preliminary issues

7.51.
In this Section, we address Indonesia's contention that all or some of the measures at issue in this dispute are outside the scope of Article XI:1 of the GATT 1994 because (i) they are automatic import licensing regimes or (ii) they are covered by Article XI:2(c)(ii) of the GATT 1994.

7.2.4.1 Whether the measures at issue are outside the scope of Article XI:1 because they are automatic import licensing procedures

7.52.
Indonesia argued that its import licensing regime for horticultural products, animals, and animal products is an automatic import licensing regime expressly permitted under Article 2.2(a) of the Import Licensing Agreement and therefore, excluded from the scope of Article XI:1 of GATT 1994 (and Article 4.2 of the Agreement on Agriculture).427 For Indonesia, its import licensing regime for horticultural products and animals and animal products is automatic because applications for MOA Recommendations, RIPHs and Import Approvals have been granted in all cases when all legal requirements are fulfilled pursuant to Article 2(1) of the Import Licensing Agreement.428
7.53.
The co-complainants disagree with Indonesia's contention. In addition to arguing that not all of the measures at issue are import licensing procedures429, New Zealand submitted that the characterization of a measure as an "automatic" or "non-automatic" licensing regime is not relevant to the Panel's inquiry under Article XI:1 of the GATT 1994 (or Article 4.2 of the Agreement on Agriculture).430 For New Zealand, the recurring question before this Panel is whether the measures at issue constitute restrictions within the meaning of Article XI:1 (and Article 4.2 of the Agreement on Agriculture).431 In its view, while some of these restrictions are made effective through import licences, the Import Licensing Agreement is not relevant to the Panel's analysis of these claims. According to New Zealand, it is important to distinguish between import licensing procedures, on the one hand, and underlying restrictions made effective through import licences, on the other.432 New Zealand contended that an analysis under Article XI:1 (and Article 4.2 of the Agreement on Agriculture) cannot be conducted simply by assessing whether the licensing procedures used to implement the underlying restrictions are characterized as "automatic" or "non-automatic" because it would be a perverse result if measures that operated to limit imports were immune from challenge under Article XI:1 of the GATT 1994 (or Article 4.2 of the Agreement on Agriculture) simply because they were made effective through automatic licensing procedures.433
7.54.
The United States added that Indonesia’s assertion that "automatic" import licensing procedures are outside the scope of Article XI:1 (and Article 4.2 of the Agreement on Agriculture)434 is refuted by the text of the provision.435 The United States argued that the text of Article XI:1 of the GATT 1994 is explicit in that "import or export licences" canimpose restrictions on importation within the meaning of Article XI:1 and consequently, a label such as "automatic" would not suffice to exclude, per se, Indonesia’s import regimes from the ambit of these provisions.436 The United States also contended that Indonesia’s import licensing regimes are not, in any event, "automatic".437
7.55.
We agree with the United States that there is nothing in the text of Article XI:1 of the GATT 1994 that suggests that import licensing regimes, automatic or non-automatic, are outside the scope of this provision. On the contrary, import licences are expressly included in the indicative list of measures covered by this provision: restrictions or prohibitions can be "made effective", i.e. produced or become operative438, "through" import licenses. In our view, the text of Article XI:1 of the GATT 1994 does not support Indonesia's contention that automatic import licenses are excluded from the scope of Article XI:1 of the GATT 1994. We also concur with the co-complainants that the essence of an analysis under Article XI:1 of the GATT 1994 does not depend on how a measure is labelled, but rather on whether it imposes a restriction or prohibition on importation. In this sense, we are of the view that a determination of whether the measures at issue constitute automatic import licences or import licensing procedures is not a necessary threshold in our examination of the co-complainants' claims under Article XI:1 of the GATT 1994. Like the panel in Argentina – Import Measures, we consider that what is relevant when examining a measure under Article XI:1 of the GATT 1994 is whether a measure prohibits or restricts trade, rather than the means by which such prohibition or restriction is made effective.439
7.56.
We also observe that the Import Licensing Agreement does not operate to exclude automatic import licences or licensing procedures per se from the scope of Article XI:1 of the GATT 1994. In fact, the provision relied upon by Indonesia, Article 2.2(a), is in line with Article XI of the GATT 1994 in providing that automatic licensing procedures "shall not be administered … as to have restrictive effects on imports …". Moreover, Article 1.2 provides that "Members shall ensure that the administrative procedures used to implement import licensing regimes are in conformity with the relevant provisions of GATT 1994".
7.57.
We thus conclude that we do not need to examine whether Indonesia's measures at issue constitute automatic import licences or licensing procedures as a necessary threshold question in our analysis of the claims under Article XI:1 of the GATT 1994.

7.2.4.2 Indonesia's reliance upon Article XI:2(c)(ii) of the GATT 1994

7.58.
We now proceed to examine the second argument put forward by Indonesia in seeking to exclude some of its measures from the scope of Article XI:1 of the GATT 1994. In this instance, Indonesia has relied upon Article XI:2(c)(ii) of the GATT 1994 to exclude Measure 4 (Harvest period requirement)440, Measure 7 (Reference prices for chillies and shallots)441 and Measure 16 (Beef reference price)442 from the scope of Article XI:1. Indonesia contended that these measures are necessary to remove a temporary surplus of horticultural products, animals and animal products in Indonesia's domestic market.443 We recall that Article XI:2(c)(ii) of the GATT 1994 reads as follows:

2. The provisions of paragraph 1 of this Article shall not extend to the following:

(a) …

(c) Import restrictions on any agricultural or fisheries product, imported in any form,* necessary to the enforcement of governmental measures which operate:

(i) …

(ii) to remove a temporary surplus of the like domestic product, or, if there is no substantial domestic production of the like product, of a domestic product for which the imported product can be directly substituted, by making the surplus available to certain groups of domestic consumers free of charge or at prices below the current market level;…

7.59.
The co-complainants responded that Article XI:2(c)(ii) is no longer available with respect to agricultural products following the entry into force of the Agreement on Agriculture. The co-complainants explained that footnote 1 to Article 4.2 of the Agreement on Agriculture sets out an illustrative list of measures that have been required to be converted into ordinary customs duties, and excludes measures maintained "under other general, non-agriculture-specific provisions of the of GATT 1994". According to the co-complainants, as Article XI:2(c) applies explicitly to "import restrictions on any agricultural or fisheries product", it is not a "general, non-agriculture-specific provision" of the GATT 1994. Thus such measures have not been excluded from the types of measures which were required to be converted to ordinary customs duties under Article 4.2 of the Agreement on Agriculture. The co-complainants also drew the Panel's attention to Article 21.1 of the Agreement on Agriculture, which provides that the provisions of the GATT 1994 apply "subject to the provisions of this Agreement".444 The co-complainants further submitted that even if Article XI:2(c)(ii) of the GATT 1994 were applicable, Indonesia failed to demonstrate its constitutive elements.445
7.60.
We agree with the co-complainants. As they explained, Article XI:2(c) has been rendered inoperative with respect to agricultural measures by Article 4.2 of the Agreement on Agriculture, which prohibits Members from maintaining, resorting to, or reverting to, "any measures of the kind which have been required to be converted into ordinary customs duties". Footnote 1 to Article 4.2 provides that the only measures that fall outside the scope of this provision are the ones "maintained under balance-of-payment provisions or under other general, non-agriculture-specific provisions of the GATT 1994 or of the other Multilateral Trade Agreements in Annex 1A to the WTO Agreement". Article XI:2(c) by its terms concerns agricultural products and therefore does not qualify under the exclusion for general, non-agriculture-specific provisions. Therefore, Indonesia cannot rely upon Article XI:2(c)(ii) of the GATT 1994. This is confirmed by Article 21 of the Agreement on Agriculture, which provides that "[t]he provisions of GATT 1994", including Article XI:2(c)(ii) of the GATT 1994, "shall apply subject to the provisions of this Agreement". Accordingly, we conclude that Indonesia cannot rely upon Article XI:2(c)(ii) of the GATT 1994 to exclude Measures 4, 7 and 16 from the scope of Article XI:1 of the GATT 1994 because, with respect to agricultural measures, Article XI:2(c) has been rendered inoperative by Article 4.2 of the Agreement on Agriculture.

7.2.5 Whether Measure 1 (Limited application windows and validity periods) is inconsistent with Article XI:1 of the GATT 1994

7.2.5.1 Arguments of the parties

7.2.5.1.1 New Zealand

7.61.
New Zealand claims that the limited application and validity periods for horticultural products under the import licensing regime have a limiting effect on imports contrary to Article XI:1 of the GATT 1994 as they adversely affect the volume of horticultural imports into Indonesia. According to New Zealand, importers may only submit applications for RIPHs and Import Approvals during limited application windows and the RIPHs and Import Approvals set out limited validity periods for the importation of horticultural products into Indonesia. New Zealand argues that these requirements are structured in such a way that imports are severely restricted over the period between validity periods.446
7.62.
New Zealand explains that RIPHs are issued twice a year for the periods January to June and July to December. For the period from January to June, the application window for RIPHs is 15 working days from the start of November of the previous year. For the period June to December, the application window for RIPHs is 15 working days from the start of May of the current year.447 For Import Approvals for RIs the application window for the January to June validity period is December, and for the July to December period, the application period is June.448 New Zealand argues, however, that the application windows for Import Approvals are often not open for the entire month.449 New Zealand submits that these narrow application windows, combined with seasonality and the time it takes to package and ship product to Indonesia, negatively affects suppliers, particularly those with longer transportation lines.450 For New Zealand, imports are also disrupted at the end of each validity period because importers do not want to risk having products arriving in Indonesia after the semester has ended451, particularly due to the applicable sanctions. In its view, this decrease in imports of horticultural products in the first month of each validity period, and at the end of each period, is reflected in the trade statistics for New Zealand apple and onion exports to Indonesia.452 In response to Indonesia's argument that such information is mere "anecdotal" evidence, New Zealand argues that is not the case since the trade statistics in question are sourced from the New Zealand Customs Service, focusing on exports to Indonesia of horticultural products of particular importance to New Zealand.453
7.63.
New Zealand contends that the panels in Colombia – Ports of Entry and Argentina – Import Measures (citing previous GATT panel decisions) have confirmed that measures which restrict market access can constitute quantitative restrictions contrary to Article XI:1 of the GATT 1994.454 New Zealand submits that this is the case as well for the limited application windows and validity period requirements as they restrict the competitive opportunities and have a limiting effect on horticultural product imports, contrary to Article XI:1 of the GATT 1994.455

7.2.5.1.2 United States

7.64.
The United States claims that Indonesia's application window and validity period requirements are inconsistent with Article XI:1 of the GATT 1994 because they constitute restrictions within the meaning of that provision, i.e. "a limitation, or limiting condition on importation, or has a limiting effect on importation".456 The United States argues that these requirements constitute restrictions within Article XI:1 because their structure causes a period of several weeks at the end of one semester, and at the beginning of another, when products from the United States (and other Members far from Indonesia) cannot be exported to Indonesia.457 Additionally, the United States claims that this requirement is not a duty, tax, or other charge, and, therefore, is within the scope of Article XI:1.458
7.65.
The United States explains that an RI can apply for an RIPH and Import Approvals to import horticultural products only during a limited window prior to the beginning of a new semester, that RIPHs and Import Approvals are valid only for one six-month period, and that an RI must reapply for them every semester. According to the United States, shipping of horticultural products for any semester cannot begin until after RIPHs and Import Approvals are issued because exporters shipping goods to Indonesia must have valid RIPH and Import Approval numbers from the RI in Indonesia in order to have their horticultural products inspected and verified in the country of origin. The United States contends that, once an RI obtains its RIPH and Import Approval and places its orders for the next semester, it takes at least four to six weeks for horticultural products to arrive in Indonesia, assuming that the US exporters ship immediately. In these conditions, the products must arrive in Indonesia and clear customs before the end of the semester.459
7.66.
According to the United States, these periods of non-shipment created by the structure and operation of the application windows and validity periods of the RIPHs (15 working days in November and May only) and Import Approvals (one month in December and June only) impose limiting conditions on importation and have direct limiting effects on horticultural product imports.460 The United States finds support for its allegation that the structure of the application windows and validity periods respectively applicable to RIPHs and Import Approvals are restrictions under Article XI:1 in prior jurisprudence461, and in particular, in the panel report in Colombia – Ports of Entry. The United States submits that the panel considered a measure that restricted the entry to two Colombian ports of imports of certain textile and apparel products from Panama and found that the challenged measure had a "limiting effect" on imports because "uncertainties, including access to one seaport for extended periods of time and the likely increased costs that would arise for importers operating under the constraints of the port restrictions, limit competitive opportunities for imports arriving from Panama."462 The United States contends that Indonesia's requirements go well beyond "uncertainties" and "likely increased costs" since Indonesia's measures operate to wholly exclude US horticultural products from the Indonesian market for four to six weeks out of every semester, and two to three months out of every year.463
7.67.
The United States also argues that, although not required under Article XI:1 of the GATT 1994, it submitted evidence demonstrating the effect of this "no-shipment" period on imports, including statements by exporters of horticultural and animal products attesting that the application windows and validity periods prevent them from selling to Indonesia altogether for the last four to six weeks of one validity period and the beginning of the next.464
7.68.
In response to Indonesia's argument that the market share of US-origin oranges, lemons, frozen potatoes, and grapefruit juice increased from 2012 to 2014465, the United States argues that while the market share of US-origin oranges grew between 2012 and 2015, overall imports of oranges fell significantly over the same period. The United States also contends that the data on Indonesia’s orange imports do not contradict the prima facie case established by the co-complainants.466

7.2.5.1.3 Indonesia

7.69.
Indonesia argues that its import licensing system for horticultural products is an automatic import licensing system and that, for this reason, it does not violate Article XI:1 of the GATT 1994.467 Indonesia contends that should the Panel prefer to assess each element of Indonesia's import licensing regime for horticultural products, the application windows and validity periods do not violate Article XI:1 of the GATT 1994 because they allow for continuous importation of products into Indonesia.468
7.70.
Indonesia submits that it is simply untrue that there is a period of time during which imports are "restricted" as a function of the timing of the import licence application process.469 For Indonesia, the co-complainants' argument is at odds with their argument that they are compelled to import too much as a result of the realization requirement. Indonesia also contends that the market share of many key imports from the co-complainants has increased since the implementation of Indonesia's current import licensing regime, contrasting with the co-complainant's arguments that the import licensing regime has trade-restrictive effects. Indonesia submits that this evidence shows that the application window and validity period elements of Indonesia's import licensing for fresh horticultural products is consistent with Article XI:1 of the GATT 1994.470
7.71.
Indonesia argues that nothing in Article XI:1 of the GATT 1994 prevents Members from implementing reasonable, non-discriminatory licensing schemes to regulate imports. According to Indonesia, the fact that the licences are not infinite in duration or that the application periods are fixed to certain periods does not give rise to a quantitative restriction within the meaning of Article XI:1 of the GATT 1994.471 Indonesia contends that application windows are permitted under Article 1(6) of the Import Licensing Agreement and that it allows 15 working days (21 calendar days) for the application window to apply for an RIPH for horticultural products and a one-month application window for IA applications. Indonesia further sustains that all applications for RIPHs, Recommendations or Import Approvals can be submitted online at INATRADE (Trade Licensing Services Using Electronic and Online System) and REIPPT (Export Import Recommendation for Certain Agricultural Products).472
7.72.
For Indonesia, the validity periods of its import licences for horticultural products, animals, and animal products cover the entire calendar year and there is no period of time during which imports are restricted as a function of the lapse in validity periods.473 Indonesia also contends that the application window and validity periods are very common features among WTO Members in administering imports.474

7.2.5.2 Analysis by the Panel

7.73.
As noted in paragraph 7.37 above, the Panel will examine each of Indonesia's 18 measures in turn. Thus the first task before the Panel is to establish whether, as claimed by the co-complainants, Measure 1 is inconsistent with Article XI:1 of the GATT 1994 because it constitutes a restriction having a limiting effect on the importation of horticultural imports into Indonesia and limits the competitive opportunities of importers and imported products.475 As explained in Section 7.2.3 above, prior panels have followed a two-step test whereby they first establish whether the complainant has demonstrated that the measure at issue falls within the scope of Article XI:1 of the GATT 1994, followed by a consideration of whether the complainant has demonstrated that the measure at issue has a limiting effect on importation.
7.74.
The co-complainants argued that Measure 1 constitutes a restriction on importation476, and that it is not a duty, tax, or other charge, and, therefore, is within the scope of Article XI:1.477 New Zealand further argued that the components of Indonesia's import licensing regime for animals, animal products and horticultural products, which include Measure 1, constitute prohibitions or restrictions made effective through an "import licence" or, alternatively, an "other measure".478 The United States submitted that Article XI:1 applies to any "restriction," including those "made effective through quotas, import or export licences or other measures".479
7.75.
Indonesia did not contest the co-complainants' characterization of Measure 1.480 Rather, it has responded that its measures are outside the scope of Article XI:1 because they are automatic import licensing regimes.481 We recall our conclusion in Section 7.2.3.2.1 above that automatic import licensing procedures do not fall per se outside the scope of Article XI:1 of the GATT 1994. Given the description of Measure 1 in Section 2.3.2.1 above, we concur with the co‑complainants in that Measure 1 is not a duty, tax, or other charge and it is therefore not excluded explicitly from the scope of Article XI:1 of the GATT 1994.
7.76.
Given the broad scope of "other measures", we consider it more efficient to follow the approach of the panel in Argentina – Import Measures482 described in paragraph 7.42 above and thus proceed to examine whether the co-complainants demonstrated that Measure 1 prohibits or restricts trade, rather than examining the means by which such prohibition or restriction would be made effective. In doing so, we will determine whether the co-complainants demonstrated that Measure 1 has a limiting effect on importation. To carry out this analysis, we recall that the Panel may examine the design, architecture, and revealing structure of Measure 1, within its relevant context.
7.77.
In this- respect, as described in Section 2.3.2.1 above, Measure 1 consists of the of the limited application windows and the six-month validity period of RIPHs and Import Approvals, together with some pre-shipment requirements that preclude importers from shipping their products before they obtain an Import Approval and the requirement that importers must complete all importations of horticultural products covered in their RIPHs and Import Approvals during the validity period of these documents.483 Indonesia applies this Measure pursuant to Article 13 of Regulation MOA 86/2013, which regulates the relevant timeframes concerning RIPHs and Articles 13A, 14, 21, 22 and 30 of Regulation MOT 16/2013, as amended, which does the same for Import Approvals. We discern the following elements in the design, architecture and structure of this measure as per the mentioned regulations:

a. Pursuant to Article 13 of MOA 86/2013, importers may apply for an RIPH for the validity period from January to June during 15 working days starting in early November of the previous year, and for the validity period from July to December during 15 working days starting in early May of that year;

b. Pursuant to Article 13A of MOT 16/2013, as amended, applications for Import Approvals may be made in December for the validity period from January to June, and in June for the validity period from July to December;

c. Pursuant to Articles 21(1) and 21(2) of MOT 16/2013, as amended by MOT 47/2013, every importation of horticultural products must undergo a technical verification which is carried out by a surveyor designated by the Minister of Trade. Article 22 of MOT 16/2013, as amended, provides that the verification conducted under Article 21(1) examines information that includes the country and port of origin, the tariff classification and product description, and the type and volume of the products to be imported.

d. Pursuant to Article 30 of MOT 16/2013, as amended, fresh or processed horticultural products imports that is not the horticultural product included in the recognition of the PI-Horticultural products and/or the Import Approval will be destroyed or re-exported in accordance with regulatory legislation.

7.78.
According to New Zealand, Measure 1 is structured in such a way that imports are severely restricted over the period between validity periods. This is because importers may only submit applications for RIPHs and Import Approvals during limited windows and the RIPHs and Import Approvals set out limited validity periods for the importation of horticultural products.484 The United States shares New Zealand's view and argues that Measure 1 constitutes a restriction within the scope of Article XI:1 because its structure causes a period of several weeks at the end of one semester and the beginning of another when products from the United States (and other Members far from Indonesia) cannot be exported to Indonesia.485
7.79.
Key to understanding the co-complainants' challenge to this measure is their contention that horticultural products cannot be shipped from the country of origin until after the Import Approval for that period has been issued.486 In their view, some of the data required by Article 22 of MOT 16/2013, as amended by MOT 47/2013, can only be obtained after receiving the RIPHs and Import Approvals for the relevant validity period and, therefore, the shipment of horticultural products can only begin after obtaining these documents, in particular, the Import Approval.487 In support, the co-complainants referred to Exhibit USA-69, which contains the provisions for verification of horticultural products from KSO SUCOFINDO, a surveyor designated by Indonesia's Ministry of Trade, which requires that, in order to apply for a verification request, importers need to file certain documents, including an Import Approval for horticultural products.488
7.80.
We understand that the alleged restriction occurs because of the combination of the different elements or requirements that encompass Measure 1, namely (i) the timing of the application windows, (ii) the requirement that all horticultural goods arriving into Indonesia must clear customs during the validity period of the relevant Import Approval489, and (iii) the requirement that an Import Approval must be issued before products are shipped to Indonesia together with the factual circumstances inherent in international transportation depending on the geographical location of the exporting country. According to the evidence on the record, it may take two to six weeks for products shipped from the co-complainants to reach Indonesia.490 The following graph shows the operation of the various requirements integrated into Measure 1:

Import licensing for horticultural products: Measure 1 scenario

[SEE IMAGE IN SOURCE DOCUMENT]

7.81.
To ensure that we understood and analysed correctly the design, architecture, and revealing structure of this Measure as well as its resulting operation in practice, the Panel devised a hypothetical scenario that we shared with the parties. We sought their views to confirm whether our assumptions accurately reflected the functioning of this Measure.491 In our hypothetical scenario, we assumed that an importer has obtained an RIPH and an Import Approval for the validity period of January-June 2015 and that it takes, on average, four weeks for the products to get from the country of origin to Indonesia. This means that at the latest, the importer must make its last shipment by the beginning of June for the products to arrive on time to be admitted into Indonesia before the validity of the Import Approval expires. We also assumed that the same importer applied for an RIPH and an Import Approval for the validity period July-December 2015 during the application window for each of these documents (i.e. the first 15 business days of May for the RIPH, and the month of June for the Import Approval). Following Article 13(A)(2) of MOT 16/2013, as amended, the Import Approval would be issued at the beginning of each semester, i.e. in July in this scenario. Therefore, the earliest the importer would be able to ship horticultural products under the validity period of July-December would be at the beginning of July because it cannot ship any products before obtaining the new Import Approval (due to the pre-shipment verification requirements). If the importer were able to ship the products immediately after obtaining the Import Approval, the products would arrive at the beginning of August due to the shipping time assumptions. In this scenario, there would be no imports during the month of July, the importer would have to stop imports at the beginning of June and could only resume them after obtaining a new Import Approval in early July.
7.82.
The hypothetical scenario, which was modelled to closely follow how the different elements or requirements encompassed in this Measure operate, shows that by virtue of the design, architecture and revealing structure under Indonesia's import licensing regime for horticultural products, there is a period of time when there are no imports into Indonesia. While the co-complainants agreed that the scenario provided an accurate depiction of the way the measure works492, Indonesia argued that the scenario does not take into account the duration of the approval process, both for RIPH and for Import Approval. Indonesia explained that if the complete application for an RIPH is received on the first day of the application window pursuant to Article 12 of MOA 86/2013, the RIPH will be issued within seven days (8 November at the latest), and in the case of Import Approvals, if the complete application for Import Approval is received by the Ministry of Trade on 1 December, the Import Approval will be issued within two days (3 December at the latest).493 For Indonesia, this means the importer will be able to import its products right after the issuance of the Import Approval, and the products will arrive in Indonesia by the beginning of the import period. Indonesia also contended that it takes approximately two weeks to ship products from different ports in New Zealand to Indonesia494 and that it is possible to obtain an extension under Article 12A of MOT 17/2014.495
7.83.
The co-complainants responded that Indonesia's contention that the Import Approval will be issued within two days is incorrect because Article 13(A)(2) of MOT 16/2013, as amended, clearly stipulates that Import Approvals are issued "at the beginning of each semester."496 New Zealand also disagreed with Indonesia's statement that it takes approximately two weeks to ship products from New Zealand to Indonesia. In the context of the similar measure applicable to animals and animal products, New Zealand explained that in reality, it takes at least three weeks to ship bovine meat and offal from New Zealand to Indonesia, plus another one to two weeks to prepare the shipment prior to export.497
7.84.
We concur with the co-complainants in that Article 13(A) of MOT 16/2013, as amended, explicitly provides that Import Approvals are issued at the beginning of each semester. We note that Indonesia relied upon Article 11 of MOT 71/2015 in seeking to respond to allegations about the time it takes to receive approvals. However, this regulation was issued after the establishment of this Panel and is not within the various elements that constitute the measure before us. We also note that even if it were included in Measure 1, Article 11 of MOT 71/2015 does not stipulate when an Import Approval shall be issued and hence we do not find support there for Indonesia's statements about the timing of approvals.498 In relation to Indonesia's contention regarding the shipping time, we recall that in paragraph 7.80 above, we mentioned that there was evidence on the record that it may take two to six weeks for products shipped from the co-complainants to reach Indonesia.499 Nonetheless, even if we were to assume that it only takes two weeks to ship products from New Zealand to Indonesia, the above hypothetical scenario would still show that for a period of time, no imports would enter Indonesia. The only difference would be that the period when imports would not enter would be reduced from one month to two weeks. In any event, we note that unless the products were able to reach Indonesia the following day after receiving the Import Approval, something that seems highly unlikely to us, there would always be a period of time when there would be no imports to Indonesia. Regarding Indonesia's argument that the RIPH will be issued within seven days, we note that even in this scenario, the importer would still have to wait another three weeks before submitting an Import Approval application, because the application window starts only in December. In this sense, the RIPH issuance timelines become irrelevant.
7.85.
We also note that other than contesting timeframes for issuing approvals and the shipping time from New Zealand, Indonesia did not take issue with other elements of the hypothetical scenario set forth above, nor with the manner in which it reflects the design, architecture and revealing structure of Measure 1.
7.86.
As we explained above, the effect on importation can be attributed to the intrinsic elements of Measure 1, namely (i) the timing of the application windows, which is very close to the expiration of the previous import documents, (ii) the requirements that preclude importers from shipping products before having obtained the new Import Approval, and (iii) the requirement that all horticultural goods arriving in Indonesia must clear customs during the validity period of the relevant Import Approval. Added to these is that international transportation from the co-complainants necessarily takes some time.
7.87.
While the intrinsic elements of Measure 1 are attributable to Indonesia, the factual circumstances resulting from the geographical location of the co-complainants are obviously not attributable to Indonesia. Indeed, Indonesia argued that "its geographic location on the planet is not a 'measure' designed to 'restrict' imports from either New Zealand or the United States".500 We agree. However, Indonesia should have taken into account when designing the various elements that encompass Measure 1 that international transportation necessarily would have an impact on the operation of the measures and the ability of WTO Members to meet Indonesia’s requirements.
7.88.
We also observe that the operation of Measure 1 as depicted in our hypothetical scenario above and the resulting period with no imports is confirmed by the trade statistics submitted by the co-complainants. The graphs shown in Annexes 4 and 5 of New Zealand's first submission describe apple and onion exports to Indonesia, contrasting the statistics for the same months in the years prior to the import licensing regime being put in place at the end of 2012. The volume of imports decreased in the periods between validity periods of Import Approvals. Similarly, in Exhibit USA-50, weekly export statistics for apples, as compiled by the US Northwest Horticultural Council, show that, from 2013 to 2015, shipments of US apples to Indonesia also "came to a halt towards the end of the first and second semesters", i.e. in December and June.
7.89.
Having examined the design, architecture and revealing structure of Measure 1, we conclude that Measure 1 has a limiting effect on importation because, during certain periods of time, the operation of Measure 1 results in no imports of horticultural products into Indonesia.
7.90.
In addition, we note that the co-complainants have also argued that Measure 1 has a negative effect on the competitive opportunities of imported products. In this respect, New Zealand referred to the panels in Colombia – Ports of Entry and Argentina – Import Measures (citing previous GATT panel decisions) that have confirmed that measures that restrict market access can constitute quantitative restrictions contrary to Article XI:1 of the GATT 1994.501 For New Zealand, this is the case of the limited application windows and validity period requirements as they restrict competitive opportunities.502 Similarly, the United States found support in the panel report in Colombia – Ports of Entry, and explained how that panel considered a measure that restricted the entry to two Colombian ports of imports of certain textile and apparel products from Panama and found that the challenged measure had a "limiting effect" on imports because "uncertainties, including access to one seaport for extended periods of time and the likely increased costs that would arise for importers operating under the constraints of the port restrictions, limit competitive opportunities for imports arriving from Panama."503 The United States submitted that Indonesia's requirements go well beyond "uncertainties" and "likely increased costs" since Indonesia's measures operate to wholly exclude US horticultural products from the Indonesia market for four to six weeks out of every semester, and two to three months out of every year.504
7.91.
We agree with the co-complainants that the way Measure 1 is designed and structured results in a limitation of the competitive opportunities of importers in practice because it restricts the market access of imported products into Indonesia.

7.2.5.3 Conclusion

7.92.
For the reasons stated above, we find that Measure 1 is inconsistent with Article XI:1 of the GATT 1994 because, by virtue of its design, architecture and revealing structure, it constitutes a restriction having a limiting effect on importation.

7.2.6 Whether Measure 2 (Periodic and fixed import terms) is inconsistent with Article XI:1 of the GATT 1994

7.2.6.1 Arguments of the parties

7.2.6.1.1 New Zealand

7.93.
New Zealand claims that Measure 2 (which it calls "Fixed Licence Terms") constitutes a restriction on imports because it limits imports to the products, quantity, source and port of entry set out in the import approval documents thereby removing the ability of importers to respond to market forces and external factors that occur during a validity period.505 New Zealand submits that the Import Approvals that RIs must obtain specify the quantity of product that may be imported during a validity period. The quantities specified in the Import Approvals constitute the maximum quantity of that product that may be imported in the following validity period.506
7.94.
New Zealand further argues that by determining the import terms at the start of a validity period and not allowing those terms to be amended during the validity period of the import licences, Indonesia's regime has the effect of, among other things, prohibiting imports from countries other than those specified in the relevant import licence, and prohibiting imports arriving in a different Indonesian port than that specified in the RIPH or Import Approval.507 New Zealand submits that by restricting the parameters within which importers may import products (including the port of entry) through the import licences, importers have fewer opportunities to import horticultural products into Indonesia and that such restrictions have an impact on the "competitive opportunities" available to imported products.508 New Zealand claims that this has a consequential limiting effect on imports contrary to Article XI:1 of the GATT 1994.509
7.95.
New Zealand also contends that not only are these terms fixed for the period of validity of the licence, but Indonesia also limits which terms can be included in the import licence through the operation of other components of its import licensing regime for horticultural products.510 For New Zealand, it is therefore not correct to state that Indonesia does not place any limitationson the terms identified because the various legal requirements operate together with Measure 2 to place limitations on the terms identified on the import licences.511
7.96.
Responding to Indonesia's argumentation that the facts in Colombia – Ports of Entry are different from those in this case because importers have the flexibility to identify more than one port of entry on the Import Approval application, New Zealand argues that such "flexibility" is at odds with the legal requirement set out in Article 32 of MOT 16/2013 whereby "[e]ach Horticultural Product can only be imported through destination ports that are in accordance with regulatory legislation".512 New Zealand also submits that, in any case, the requirement to set out the port of destination is only one of the requirements of Measure 2 that cannot be amended during the period of validity of the Import Approval.513

7.2.6.1.2 United States

7.97.
The United States claims that Measure 2 is a restriction within the meaning of Article XI:1 and is therefore inconsistent with Article XI:1 of the GATT 1994.514 Additionally, the United States submits that this requirement is not a duty, tax, or other charge and, therefore, is within the scope of Article XI:1.515 According to the United States, Indonesia limits horticultural imports to products of the type, quantity, country of origin and port of entry listed on the RIPH and Import Approval that are granted at the beginning of each semester; and prohibits the importation of any horticultural products, of other types, from different origins, or into different ports without a valid permit. The United States argues that a measure is a "restriction" if it imposes "a limitation on importation, a limiting condition on importation, or has a limiting effect on importation."516 The United States claims that since only certain imports, as listed on the RIPH and Import Approval at the outset of each semester, are allowed to enter the territory of a Member during that semester, that measure imposes a restriction on imports within the meaning of Article XI:1.517
7.98.
The United States argues that during any six-month period, the only horticultural products that are permitted to be imported are those that conform to the products listed on importers' original RIPHs and Import Approvals, as issued at the beginning of the semester.518 In the United States' view, this means that PIs can only import the specific type of horticultural products from the country of origin through the port of entry specified on their RIPHs during the semester.519 According to the Unites States, once Indonesia issues the RIPHs and Import Approvals for six months, importers cannot change the listed specifications or apply to import new or additional products and thus, importers cannot take advantage of market opportunities or mitigate risks inherent in the global supply chains.520 For the Unites States, these features imply that (i) imports of certain products (those for which no RIPH or Import Approval was granted at the beginning of the import period) are effectively banned until the next period; (ii) only a specified quantity of each type of product can be imported until the next period; (iii) products from other WTO Members are restricted to the amounts originally requested by importers; and (iv) if the original port of entry is no longer available or commercially feasible for use, the products cannot enter through a different port of entry. Thus, the United States claims that the type, quantity, country of origin and port of entry requirements imposed through the RIPHs and Import Approvals are a limitation on importation, a limiting condition on importation, or have a limiting effect on importation, and constitute a "restriction" within the meaning of Article XI:1.521
7.99.
The United States further argues that previous panels have found that measures imposing limits of this kind are restrictions under Article XI:1. The United States refers to India – Autos, where the panel found that a measure that imposed a trade balancing requirement that companies' exports be at least equivalent in value to their imports was a restriction contrary to Article XI:1 because "an importer [was] 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"522, and to Colombia – Ports of Entry, where the panel found that a measure restricting the entry of certain textile and apparel products from Panama to two ports of entry in Colombia was a restriction under Article XI:1.523

7.2.6.1.3 Indonesia

7.100.
Indonesia argues that the complainants have failed to adequately explain how a requirement that importers determine their own terms of importation has any limiting effect on imports.524 Indonesia submits that because the terms of importation such as the type, quantity, country of origin, and port of entry are chosen by importers, the licence terms cannot constitute "measures that are instituted or maintained by Indonesia" and therefore Measure 2 falls outside the scope of Article XI:1 of the GATT 1994.525 Additionally, Indonesia submits that importers are free to alter their terms of importation from one licence application to the next, meaning that the "terms" are only static for the duration of one validity period, and that it does not place any limitations on the terms identified by importers other than the realization requirement that exists to ensure importers make a reasonable estimate of their anticipated import volumes. Indonesia asserts that importers are not required to allocate anticipated import volumes to specific ports of entry in their applications, and that it is believed that some importers preserve flexibility by listing more ports of entry than they ultimately use in their import licence applications, with no sanctions in place for such behaviour.526

7.2.6.2 Analysis by the Panel

7.101.
The task before the Panel is to establish whether, as claimed by the co-complainants527, Measure 2 is inconsistent with Article XI:1 of the GATT 1994 because it constitutes a restriction having a limiting effect on importation of horticultural imports into Indonesia and limits the competitive opportunities of importers and imported products.
7.102.
We begin by noting the co-complainants' contention that Measure 2 constitutes a restriction on importation528, and that it is not a duty, tax, or other charge, and, therefore, is within the scope of Article XI:1.529 New Zealand argued that the components of Indonesia's import licensing regime for animals, animal products and horticultural products, which include Measure 2, constitute prohibitions or restrictions made effective through an "import licence" or, alternatively, an "other measure".530 The United States submitted that Article XI:1 applies to any "restriction," including those "made effective through quotas, import or export licenses or other measures."531
7.103.
We observe that Indonesia has not contested the co-complainants' characterization of Measure 2.532 Rather, it has responded that its measures are outside the scope of Article XI:1 because they are automatic import licensing regimes.533 We recall our conclusion in Section 7.2.3.2.1 above that automatic import licensing procedures do not fall per se outside the scope of Article XI:1 of the GATT 1994. In addition, Indonesia has attempted to exclude Measure 2 from the scope of this provision by arguing that it is not a measure "instituted or maintained by Indonesia" but the result of decisions by private actors.534 We refer to Section 7.1.3 above where we concluded that Measure 2 is a measure taken by Indonesia. Given the description of Measure 2 in Section 2.3.2.2 above, we concur with the co-complainants in that Measure 2 is not a duty, tax, or other charge and it is therefore not excluded explicitly from the scope of Article XI:1 of the GATT 1994.
7.104.
As with Measure 1535, we proceed to examine whether the co-complainants have demonstrated that Measure 2 prohibits or restricts trade, rather than examining the means by which such prohibition or restriction would be made effective. In doing so, we will determine whether the co-complainants have demonstrated that Measure 2 has a limiting effect on importation. To carry out this analysis, we recall that the Panel is to examine the design, architecture, and revealing structure of Measure 2, within its relevant context.
7.105.
As described in Section 2.3.2.2 above, Measure 2 consists of the requirement to only import horticultural products within the terms of the RIPHs and Import Approvals. These terms include the quantity of the products permitted to be imported, the specific type of products permitted to be imported, the country of origin of the products, and the Indonesian port or ports of entry through which the products will enter. Such terms cannot be subject to changes during the validity period of the relevant RIPH and Import Approval.536 This measure is implemented by Indonesia by means of Article 6 of MOA 86/2013, that regulates the elements of RIPHs; Article 13 of MOT 16/2013, as amended, that stipulates the same for the Import Approvals; and Article 30 of MOT 16/2013 as amended by MOT 47/2013 that establishes that when imported products do not coincide with the type of products specified in the Import Approvals and/or in the RI and PI designations, they are destroyed (fresh) or re-exported (processed) at the importers' cost. From the text of these regulations, we understand that the interdiction to amend the terms of the granted RIPHs and Import Approvals during their validity period means that importers cannot import products of a different type, in a greater quantity or from another country or through a different port than that specified in the relevant RIPH or Import Approvals.
7.106.
We observe that Indonesia does not deny that these terms cannot be modified but submits that importers are free to alter the terms of importation from one licence application to the next.537 In response to a question from the Panel to clarify the extent to which these terms can be effectively modified, Indonesia replied that in case an importer desired to increase the original quantity of imports set out in the import documents, such an importer would have two options: (i) to submit another application specifying greater quantities, provided that the application window is still open and the RIPH has not been issued yet, or (ii) to submit an application specifying a greater quantity during the next application window. Similarly, Indonesia replied that if an importer desired to reduce the quantity of its imports below the amount it previously sought in its application, such an importer would have two options: (i) to reduce its imports by up to 20% without penalty, or (ii) reduce its imports by more than 20% and risk the imposition of a penalty under the old regulations.538
7.107.
We note that the co-complainants have focused their argumentation on the operation of this Measure, and in particular, its detrimental impact on competitive opportunities. They contended that the operation of the measure, which results from its design, causes a limiting effect on importation.539 For instance, New Zealand argued that by restricting the parameters within which importers may import products through the import licences, importers have fewer opportunities to import horticultural products into Indonesia and that such restrictions have an impact on the "competitive opportunities" available to imported products540, with a consequential limiting effect on imports, contrary to Article XI:1 of the GATT 1994.541
7.108.
Similarly, the United States stressed the detrimental impact of this Measure with respect to the competitive opportunities of importers. The United States thus argued that, once Indonesia issues the RIPHs and Import Approvals for a six-month period, importers cannot change the listed specifications or apply to import new or additional products and thus cannot take advantage of market opportunities or mitigate risks inherent in the global supply chain.542 For the United States, these features of Indonesia's import licensing system imply that (i) imports of certain products (those for which no RIPH or Import Approval was granted at the beginning of the import period) are effectively banned until the next period; (ii) only a specified quantity of each type of product can be imported until the next period; (iii) products from other WTO Members are restricted to the amounts originally requested by importers; and, (iv) if the original port of entry is no longer available or commercially feasible for use, the products cannot enter through a different port of entry.543
7.109.
When examining the design, architecture and revealing structure of Measure 2, we observe that the various requirements it embodies and the way in which they interact, have the effect of an import quota. Indeed, Measure 2 fixes the amount and the type of products that can be imported for each validity period, i.e. every six months. This means that, for that six-month period, there is a maximum quantity of products of a given type that can be imported that cannot be modified. We note that, as Indonesia argued, the amount of the quota would be set by the importers themselves as they are determining the amounts requested in their Import Approvals. In this sense, the actual amount of the quota is not being determined by Indonesia but rather by the actions of the importers. We recall that the fact that private actors are free to make various decisions in order to comply with a measure does not preclude a finding of inconsistency. On the contrary, "where private actors are induced or encouraged to take certain decisions because of the incentives created by a measure, those decisions are not 'independent' of that measure".544 In the present case, the existence of a system which has the effect of creating a quota for every six-month period can be perceived as the result of the manner in which Indonesia structures this measure. We thus perceive the limiting effect of this Measure in terms of volume of imports.
7.110.
We also note that, by prohibiting changes in originally specified parameters in the RIPHs and the Import Approvals and thus not allowing the importation of new or additional products during the validity period of these documents or the change of original port of entry, Measure 2 provides importers with fewer opportunities to import horticultural products into Indonesia. We thus observe that such restrictions have an impact on the competitive opportunities available to imported products.545 In particular, and as claimed by the co-complainants546, we note that this Measure removes flexibility from importers to respond to changing market circumstances or external factors within a given validity period. Consequently, importers are deterred from taking advantage of new market opportunities or from controlling adverse situations that require changing importation plans.
7.111.
If we place Measure 2 in the context of Indonesia's import licensing regime for horticultural products, we concur with New Zealand that, not only are these terms fixed for the period of validity of the licence, but Indonesia also limits which terms can be included in the import licence through the operation of other components of its import licensing regime for horticultural products.547 We thus share New Zealand's view that it is not correct to state that Indonesia does not place any limitationson the terms identified because the various legal requirements operate together with Measure 2 to place limitations on the terms identified in the import licences,548 for instance, with Measure 4 (harvest period requirements). We also observe that the limiting effects of the fixed terms imposed by Measure 2 are enhanced by its interaction with Measure 3 (80% realization requirement) and Measure 5 (the storage ownership and capacity requirements) by taking away flexibility from importers to respond to changing circumstances.

7.2.6.3 Conclusion

7.112.
For the reasons stated above, we find that Measure 2 is inconsistent with Article XI:1 of the GATT 1994 because, by virtue of its design, architecture and revealing structure, it constitutes a restriction having a limiting effect on importation.

7.2.7 Whether Measure 3 (80% realization requirement) is inconsistent with Article XI:1 of the GATT 1994

7.2.7.1 Arguments of the parties

7.2.7.1.1 New Zealand

7.113.
New Zealand claims that the effect of the 80% realization requirement is to limit the amount of imports that importers request in their horticulture import licences because it induces importers to self-limit the quantity of imports they request in their horticulture import licences and that this is inconsistent with Article XI:1 of the GATT 1994 as it has a limiting effect on imports.549 New Zealand argues that RIs are prohibited from importing horticultural products in subsequent validity periods if they fail to import at least 80% of the quantity of each type of product specified on their Import Approval550, and that importers must submit an Import Realization Control Card every month to demonstrate compliance with this requirement.551 New Zealand submits that importers have a strong incentive to comply with the 80% realization requirement due to the severe consequences of non-compliance and the risk of effectively being prevented from operating their businesses. New Zealand maintains that importers respond by conservatively estimating, or underestimating, the quantities requested in their import licences in order to ensure they are able to satisfy the 80% realization requirement.552 New Zealand sustains that as a result 40 horticultural importers, 24% of the total number of horticultural importers, had their licences to import fresh horticultural products suspended in 2015 for two years.553
7.114.
New Zealand also contends that the limiting effect of the 80% realization requirement is exacerbated when combined with Measure 2 because certain import terms, such as the quantity, product type, port of entry and country of origin are locked in prior to the commencement of a validity period. In turn, this limits the flexibility available to importers to satisfy the 80% realization requirement.554 New Zealand submits that the design and structure of this measure acts as a "limitation on action, a limiting condition" and therefore, as the Appellate Body in Argentina – Import Measures and China – Raw Materials found, is a restriction within the meaning of Article XI:1.555

7.2.7.1.2 United States

7.115.
The United States claims that the requirement that RIs import, or "realize", at least 80% of the quantity specified for each type of horticultural product on their Import Approval for the semester is a restriction within the meaning of Article XI:1 and is therefore inconsistent with Article XI:1 of the GATT 1994.556 Additionally, the United States claims that this requirement is not a duty, tax, or other charge, and, therefore, is within the scope of Article XI:1.557 The United States argues that, for each semester, Indonesia requires each RI to import at least 80% of the quantity specified for each type of horticultural product listed on its Import Approval.558 Further, to monitor compliance, Indonesia requires each RI to submit monthly its Import Realization Control Card, which accounts for the quantity of realized imports.559 The United States submits that according to Indonesia's legislation, an RI that fails to meet the 80% realization requirement or fails to file the Import Realization Control Card may have its RI designation suspended.560 In the United States' view, each RI must lower the quantity it requests in its Import Approval application to less than the amount it would otherwise request in order to mitigate this risk.561
7.116.
The United States also argues that RIs are concerned by the price depressing effects of an over-supply of the market at the end of the period, due to importers' efforts to meet the 80% realization requirement.562 The United States contends that this problem is more acute in the case of chillies and shallots since the reference price requirement for these products makes importing large quantities during short periods of time to comply with the realization requirement even riskier, possibly causing prices to drop below the reference prices and cutting off imports altogether.563 For the United States, the realization requirement is a limitation or limiting condition on importation, or has a limiting effect on importation since the importer is subjected to the requirement as a condition for receiving permission to import, and failure to comply may result in ineligibility to import in a future period.564