AUSTRALIA - MEASURES AFFECTING IMPORTATION OF SALMON
- RECOURSE TO ARTICLE 21.5 BY CANADA -

VII. FINDINGS

A. CLAIMS OF THE PARTIES

7.1 Canada claims, firstly, that Australia has failed to take the measures necessary to comply with the recommendations and rulings of the DSB in the original dispute. In Canada's view, it cannot reasonably be said that Australia has implemented measures to comply with the recommendations and rulings of the DSB. For Canada, the necessary measures do not exist.

7.2 Canada claims, secondly, that even if Australia has implemented some measures purporting to comply with the recommendations and rulings of the DSB, those new measures are inconsistent with several provisions of the SPS Agreement. More specifically, Canada claims that the new measures would not remedy Australia's violation of Articles 5.1, 2.2, 5.5 and 2.3 of the SPS Agreement and are also inconsistent with Articles 5.6, 8 and Annex C, paragraph 1(c), of that Agreement.

7.3 Accordingly, both the existence and consistency of Australia's new measures are at issue in this dispute.

7.4 Australia claims that the measures it took to comply with the DSB recommendations and rulings in the original dispute exist and are being applied. According to Australia, these measures comply with the DSB recommendations and rulings in relation to Articles 5.1, 2.2, 5.5 and 2.3 of the SPS Agreement. In Australia's view, the measures taken to comply do not give rise to any new claimed inconsistencies in respect of Articles 5.6, 2.3, first sentence, Article 8 or Annex C, paragraph 1(c), of the SPS Agreement.

B. PRELIMINARY ISSUES

1. Third party rights

7.5 On 22 November 1999, the Panel made the following ruling in response to a letter received from the EC, third party to these proceedings:

In response to your letter of 18 November 1999 requesting clarification on the Panel's Working Procedures "so as to ensure that the EC receives all written submissions of the parties and the experts' replies before the meeting of the Panel", we have ruled as follows.

Article 10.3 of the DSU reads:

"Third parties shall receive the submissions of the parties to the dispute to the first meeting of the panel".

Our Working Procedures do not further specify third party rights in this respect.

In normal panel proceedings, two substantive meetings with the parties are held pursuant to Appendix 3 of the DSU. Before each of these meetings submissions are filed. Article 10.3 of the DSU explicitly limits the right of third parties to receive only the first round of submissions, i.e. the parties' submissions to the first meeting. Third parties under Article 10.3 do not have a right to receive the second round of submissions, i.e. the rebuttal submissions made to the second substantive meeting. Panel practice shows that only in exceptional circumstances have third parties received such extended third party rights.

Due to the expedited nature of Article 21.5 procedures, our timetable in this proceeding only provides for one meeting with the parties. Before that meeting parties were requested to make both first and rebuttal submissions. We also obtained expert advice before the meeting. In addition, we already received written third party submissions and have invited third parties for a special third party session to be held after the meeting with the parties.

Given the practice under Article 10.3 of the DSU to send copies only of the first round of submissions to the third parties -- not the rebuttal submissions -- we consider it appropriate in this case too to limit the right of third parties under Article 10.3 "to receive the submissions of the parties to the dispute to the first meeting" to copies of the first submissions of the parties and the supplements thereto including any additional evidence submitted up to but not including the rebuttal submission.

We note that the EC did not request any extended third party rights other than those referred to in Article 10.3 and see, indeed, no special reason why the EC, or any other third party to this case, would need special third party rights.

Moreover, in respect of the experts' replies we note that Article 10.3 of the DSU only refers to submissions "of the parties"; not to any other submissions. As was the case in the original dispute, we do not consider that Article 10.3 requires us to provide these expert replies to the third parties.

As to the meeting with third parties, we expect -- as is the case in normal DSU procedures -- to receive the third parties' oral views on this dispute in light of the first round of submissions. Nothing in the DSU prompts us to expect otherwise.

On that basis, and considering the elements of the first round of submissions that third parties have already received, we attach the following document:

Supplement of 4 November to the First Submission of Canada Concerning Tasmania's Ban on Salmonid Imports.

We recall, however, that nothing prevents the disputing parties in this dispute from also sending copies to the third parties of any of the other submissions they have made or plan to make to the Panel.

7.6 We confirm the above ruling. We recall further that none of the third parties to this dispute requested extended third party rights at the outset of this proceeding.¹³² Consequently, the Panel adopted and maintained standard working procedures following which third parties only receive the parties' first submissions before the date for filing their third party submissions. Thereafter, the Panel received rebuttal submissions, dealing mostly with the advice received from the experts advising the Panel, advice that is, for the reasons stated above, not covered as a third party right pursuant to Article 10.3 of the DSU.

2. "Government Confidential Information"

7.7 On 23 November 1999, the Panel made the following ruling -- which we confirm here -- in response to an Australian request to adopt additional procedures to ensure the confidentiality of what Australia referred to as "Government Confidential Information" which Australia had been asked to submit:

In response to Australia's request of 17 November to adopt additional procedures to ensure the strict confidentiality of certain scientific information and in the light of Canada's reply of 18 November objecting to the timing and justification of this Australian request, Canada's subsequent letter of 19 November and Australia's letter of 22 November, the Panel has decided as follows.

The Panel appreciates Australia's willingness to submit the scientific information referred to by Canada. It is in the Panel's and the parties' interest that we are informed as much as possible before making a ruling in this highly complex matter. It is also beneficial for the WTO dispute settlement system more generally that parties are forthcoming in submitting evidence requested by panels.

The Panel takes note of the confidentiality concerns expressed by Australia as well as the additional procedures it proposes. We realize that previous panels have adopted additional procedures to maintain the confidentiality of sensitive business information. We are cognizant also of the Appellate Body's refusal to take additional steps in this respect in the case on Canada - Measures Affecting the Export of Civilian Aircraft (WT/DS70/AB/R, paras. 141-147).

In this dispute we are not faced with sensitive business information that could leak to private competitors through WTO dispute settlement. Instead, we are faced with reports that are only open to the Australian government and a risk of publication of these reports by the Panel, Secretariat staff or Canadian representatives. No direct business interests are involved. The matter is one mainly of government to government relationships.

In our view, these circumstances plead for a careful examination of already existing confidentiality rules applicable to our proceedings.

First, Article 18.2 of the DSU reads:

"Written submissions to the panel � shall be treated as confidential, but shall be made available to the parties to the dispute � Members shall treat as confidential information submitted by another Member to the panel � which that Member has designated as confidential".

Second, Rule 2 of our Working Procedures¹³³ provides:

"The deliberations of the Panel and the documents submitted to it shall be kept confidential. For the duration of the Panel proceeding, the parties to the dispute are requested not to release any papers or make any statements in public regarding the dispute, except as provided for in paragraph 3 of Appendix 3 �".

Third, in respect of Panel Members and their Secretariat staff, Article VII.1 of the Rules of Conduct for the DSU states:

"Each covered person shall at all times maintain the confidentiality of dispute settlement deliberations and proceedings together with any information identified by a party as confidential".

Given, in particular, the government to government relationship of the matter before us, we consider that in principle the existing rules provide sufficient confidentiality protection for the information Australia is planning to submit. The existing rules oblige both disputing parties, third parties, the Panel and its staff to treat all written submissions and documents submitted to the Panel as confidential, in particular information submitted to the Panel which a Member designates as confidential. As was the Appellate Body in Canada - Aircraft , we as well

"are confident that the participants and the third participants in this [Panel] will fully respect their obligations under the DSU, recognizing that a Member's obligation to maintain the confidentiality of these proceedings extends also to the individuals whom that Member selects to act as its representatives, counsel and consultants" (WT/DS70/AB/R, paragraph 141, emphasis in the original).

We see only two remaining areas that may require clarification. First, the risk that the Panel may, in its public report, quote from the confidential information or refer to the author of such information when using it in support of either party. Second, the risk of leaks occurring subsequent to the completion of DSU proceedings. To address these risks, the Panel has decided to add the following two rules to its Working Procedures¹³⁴:

"TREATMENT OF INFORMATION DESIGNATED AS CONFIDENTIAL

19. Any information that has been designated as confidential by the party submitting it and that is not otherwise available in the public domain shall not be disclosed in the report of the Panel. However, the Panel may make statements of conclusion drawn from such information without referring to the author of the information.

20. After the circulation of the Panel report or, in case of an appeal, after the circulation of the Appellate Body report, the Panel, Secretariat staff, parties and third parties shall return any information that has been designated as confidential to the party that submitted it, unless the latter party agrees otherwise".¹³⁵

Having adopted these additional safeguards, we request Australia to submit the remaining information provided by the scientific reviewers, whatever form it may take, by 23 November 1999.

In reply to Canada's request of 19 November, once we receive this information from Australia within the set deadline we will consider it as part of our proceedings and validly submitted to us under Rule 5 of our Working Procedures.

3. Non-requested information submitted to the Panel

7.8 On 29 November 1999 the Panel sent the following letter to the parties:

On 25 November 1999, the Panel received a letter from "Concerned Fishermen and Processors" in South Australia. The letter addresses the treatment by Australia of, on the one hand, imports of pilchards for use as bait or fish feed and, on the other hand, imports of salmon. The Panel considered the information submitted in the letter as relevant to its procedures and has accepted this information as part of the record. It did so pursuant to the authority granted to the Panel under Article 13.1 of the DSU.

7.9 We confirm this ruling recalling, in particular, that the information submitted in the letter has a direct bearing on a claim that was already raised by Canada, namely inconsistency in the sense of Article 5.5 of the SPS Agreement in the treatment by Australia of pilchard versus salmon imports. We refer in this respect to the Appellate Body report on US - Import Prohibition of Certain Shrimp and Shrimp Products¹³⁶, in particular, where it states that a panel's

"authority to seek information is not properly equated with a prohibition on accepting information which has been submitted without having been requested by a panel. A panel has the discretionary authority either to accept and consider or to reject information and advice submitted to it, whether requested by a panel or not � The amplitude of the authority vested in panels to shape the processes of fact-finding and legal interpretation makes clear that a panel will not be deluged, as it were, with non-requested material, unless that panel allows itself to be so deluged".¹³⁷

4. Terms of Reference

7.10 On 6 December 1999, two days before the meeting of the Panel with the parties and experts and after having received the parties first submissions as well as their rebuttal submissions, the Panel made a series of preliminary rulings in respect of its terms of reference. We confirm these rulings here, slightly modified as follows:

1. In its first written submission of 7 October 1999 Australia requested the Panel to make a number of preliminary rulings. Now that Canada has had the opportunity to respond to those requests in its rebuttal submission, the Panel rules as follows.

(i) The Measures at Issue

2. First, in paragraph 73 of its first submission, Australia requested

"an immediate ruling that the measures at issue on which the Panel will make its findings are the measures applying to fresh chilled or frozen salmon from Canada, forming part of the measure described in paragraph 28 of this submission".

3. Canada has not objected to this request. Given the product scope of the measure examined by the original Panel (set out in paragraph 8.20 of the Panel Report), the clarifications provided in this respect by the Appellate Body (paragraphs 90-105) and the fact that no change or further specification in respect of product scope was made in the request by Canada for this Article 21.5 compliance Panel, we grant Australia's request.

4. We thus rule that the measures at issue on which the Panel will make its findings are the measures applying to fresh chilled or frozen salmon from Canada, forming part of the measure described in paragraph 28 of Australia's first submission.¹³⁸ We should add, though, that this ruling will not prevent us from also taking into account, where appropriate under the relevant provisions of the SPS Agreement, the way Australia treats products other than fresh chilled or frozen salmon from Canada. However, as was the case in the original procedure, the legal findings we will make on that basis shall apply only to measures applying to fresh chilled or frozen salmon from Canada.

(ii) Legal Claims -- and their Product Scope -- within the Panel's Terms of Reference

5. Second, in paragraph 91 of its first submission, Australia requested

"that the Panel make an immediate ruling that:

a. Article 2.3, first sentence does not come within the Panel's terms of reference, which are limited to the consistency of the implementing measures applied to fresh chilled or frozen salmon from Canada.

b. the legal scope of the Panel's examination under Article 2.3 first sentence and Article 5.5 does not extend to claims of discrimination in the sense of either Article.

c. the product scope of the Panel's examination of the consistency of Article 5.5 is limited to fresh chilled or frozen salmon from Canada, whole frozen herring for use as bait and live ornamental finfish".

6. All three requested rulings relate to the mandate of an Article 21.5 compliance panel and our specific terms of reference. They relate more particularly to the legal claims -- and, under the third request, their product scope - that fall within our mandate.

7. Two benchmarks apply when defining our terms of reference. First, Article 21.5 of the DSU pursuant to which this Panel was established. Second, our specific terms of reference set out in document WT/DS18/15, a document that refers, in turn, to the matter and relevant provisions of the covered agreements referred to by Canada in its request for this Panel (document WT/DS18/14).

8. We note that Article 21.5 itself refers to two types of disagreements, namely disagreements as to "the existence or consistency with a covered agreement of measures taken to comply with [DSB] recommendations and rulings" (emphasis added). Australia's requests for preliminary rulings pertain to the second type of disagreements, those on the "consistency with a covered agreement of measures taken to comply with [DSB] recommendations and rulings" (emphasis added).

9. The reference to "disagreement as to the � consistency with a covered agreement" of certain measures, implies that an Article 21.5 compliance panel can potentially examine the consistency of a measure taken to comply with a DSB recommendation or ruling in the light of any provision of any of the covered agreements. Article 21.5 is not limited to consistency of certain measures with the DSB recommendations and rulings adopted as a result of the original dispute; nor to consistency with those covered agreements or specific provisions thereof that fell within the mandate of the original panel; nor to consistency with specific WTO provisions under which the original panel found violations. If the intention behind this provision of the DSU had been to limit the mandate of Article 21.5 compliance panels in any of these ways, the text would have specified such limitation. The text, however, refers generally to "consistency with a covered agreement". The rationale behind this is obvious: a complainant, after having prevailed in an original dispute, should not have to go through the entire DSU process once again if an implementing Member in seeking to comply with DSB recommendations under a covered agreement is breaching, inadvertently or not, its obligations under other provisions of covered agreements. In such instances an expedited procedure should be available. This procedure is provided for in Article 21.5. It is in line with the fundamental requirement of "prompt compliance" with DSB recommendations and rulings expressed in both Article 3.3 and Article 21.1 of the DSU.

10. On that basis, we agree with the Article 21.5 compliance panel in EC - Bananas III (requested by Ecuador) when it stated that "[t]here is no suggestion in the text of Article 21.5 that only certain issues of consistency of measures may be considered" (WT/DS27/RW/ECU, paragraph 6.8).

11. We recall, however, that there is a second benchmark to be looked at in setting our terms of reference, namely Canada's request for this Panel (document WT/DS18/14). In that request, Canada explicitly included claims under Article 2.3 and Article 5.5 of the SPS Agreement, claims which Australia would want us to exclude, in whole or in part, from our mandate. Canada claimed, more particularly, that Australia's implementing measures

"(iii) arbitrarily or unjustifiably discriminate between Members where identical or similar conditions prevail, including between New Zealand and Canada and between Australia and Canada, and are applied in a manner that constitutes a disguised restriction on international trade, contrary to Article 2.3 of the SPS Agreement;

(iv) when considered against the measures outlined in AQPM 1999/51 for non-viable marine finfish products other than salmonids and live ornamental finfish, they reflect arbitrary or unjustifiable distinctions in Australia's appropriate level of protection in different situations, resulting in discrimination or a disguised restriction on international trade, contrary to Article 5.5 of the SPS Agreement" (WT/DS18/14, page 2).

12. Without, at this stage, addressing the entirely separate question of whether these Canadian claims are valid on their merits, we thus rule - with reference, first, to the general language of Article 21.5 and, second, to the claims explicitly listed in Canada's panel request - that none of the limitations referred to in any of the three preliminary rulings requested by Australia apply.

13. In respect of the first ruling requested by Australia, we stress that we do not now need to decide the substantive question of whether the first sentence of Article 2.3 of the SPS Agreement, considered independently from Article 5.5, covers only discrimination in respect of the same product or also discrimination between different products.

14. As to the second ruling requested by Australia, we recall that even assuming that no finding of discrimination under Articles 2.3 or 5.5 was made in the original dispute - a matter contested by Canada -- the fact that no such claim may have been dealt with in the original dispute does not prevent an Article 21.5 compliance panel from doing so. Nowhere in the DSU can we trace the requirement referred to by Australia that Article 21.5 compliance panels can only reconsider WTO provisions dealt with by the original panel in case of a "change in circumstances". If, indeed, no "change in circumstances" occurred, as a matter of substance, one could expect that a compliance panel would simply confirm the finding made by the original panel. This issue is, however, a matter of substantive compliance with WTO rules, not one of terms of reference.

15. Finally, considering the third ruling requested by Australia, we recall that already in the original dispute more comparisons were referred to by Canada than those between salmon, on the one hand, and whole frozen herring for use as bait and live ornamental finfish, on the other. To limit our mandate to comparisons with the latter two categories only would thus even go a step further than limiting Article 21.5 to claims or arguments made before the original panel, a limitation not even Australia accepts.¹³⁹ Only claims or arguments under which an actual violation was found by the original panel would then be subject to Article 21.5 scrutiny. Again, nowhere in the DSU can we find such limitation. Given the broad language of Article 21.5 and of Canada's claims under Article 5.5 set out in the request for this Panel, we find that all comparisons made by Canada in its first round of submissions to this Panel fall within our terms of reference.¹⁴⁰

(iii) The Tasmanian Import Ban¹⁴¹

16. We now turn to the question of whether the import ban on salmonids imposed by the Government of Tasmania on 20 October 1999 falls within our terms of reference. This measure was brought to our attention in a letter received from Canada on 27 October 1999. In that letter Canada requested authorization from the Panel to file a second supplement to its first submission dealing specifically with this newly imposed Tasmanian ban. In reply, the Secretary to the Panel sent the following message on 28 October:

"The Panel has taken note of Canada's letter of 27 October regarding Tasmania's import prohibition on salmon. Even though this letter seems to indicate that the import prohibition allegedly imposed by the Government of Tasmania is not one "taken to comply with the recommendations and rulings" in the sense of Article 21.5, nor one in respect of which the Panel can make a ruling of consistency pursuant to its terms of reference, the Panel grants the Canadian request to submit an additional brief � on the grounds that it may shed further light on the conformity of the measures that are subject to the Panel's scrutiny � Australia may submit its comments on this brief � as well as comments on whether the measure has been taken to comply with the rulings adopted by the DSB. Note, however, that the Panel's views expressed in this letter are preliminary only, based solely on the information reflected in the Canadian letter, and conveyed to the parties with the sole intention to set some parameters for their further submissions" (emphasis added).

17. Having considered since then the submissions we received in this respect, first, from Canada on 4 November, second, from Australia on 17 November and, third, the parties' rebuttals filed on 25 November, we come to a conclusion different from the preliminary view tentatively expressed in the letter of 28 October.

18. In its supplement of 4 November, Canada did not ask the Panel to rule on the SPS consistency of the Tasmanian ban as such, but asked us to "consider the consequences of Tasmania's ban for Australia's non-compliance with the recommendations and rulings of the DSB" (paragraph 5) arguing that "Tasmania's ban on salmonid imports has negated, in part of Australia, even limited access for Canadian salmon products � In so doing, the Tasmanian ban has exacerbated Australia's non-compliance" (paragraph 14). In our view, we cannot rule on the so-called exacerbation of Australia's non-compliance without examining also the SPS consistency of the Tasmanian ban itself. If the Tasmanian ban is consistent with the SPS Agreement, it cannot, as Canada put it, negate market access derived from new federal import requirements inconsistently with the SPS Agreement. Only if the ban is inconsistent with the SPS Agreement can it negatively affect Australia's compliance.

19. In its rebuttal submission, however, Canada also claimed¹⁴² that the Tasmanian ban as such is inconsistent with Articles 5.1, 2.2, 5.6 and 8 of the SPS Agreement.

20. Australia submits that the Tasmanian ban is not a "measure taken to comply" in the sense of Article 21.5, is outside the Panel's terms of reference and cannot be adduced as evidence that the new federal import requirements themselves are inconsistent with the SPS Agreement.

21. Two issues arise when considering whether the Tasmanian ban falls within our mandate. First, is the ban a "measure taken to comply with [DSB] recommendations and rulings"? Since Article 21.5 exclusively refers to disagreements as to "measures taken to comply", any other measures fall outside the scope of a compliance panel. Second, is the Tasmanian ban sufficiently specified in Canada's panel request consistently with the requirements of Article 6.2 of the DSU so as to fall within our terms of reference?

22. In respect of the first issue, we note that an Article 21.5 panel cannot leave it to the full discretion of the implementing Member to decide whether or not a measure is one "taken to comply". If one were to allow that, an implementing Member could simply avoid any scrutiny of certain measures by a compliance panel, even where such measures would be so clearly connected to the panel and Appellate Body reports concerned, both in time and in respect of the subject-matter, that any impartial observer would consider them to be measures "taken to comply". Without attempting to give a precise definition of "measures taken to comply" that should apply in all cases, we are of the view that in the context of this dispute at least any quarantine measure introduced by Australia subsequent to the adoption on 6 November 1998 of DSB recommendations and rulings in the original dispute - and within a more or less limited period of time thereafter -- that applies to imports of fresh chilled or frozen salmon from Canada, is a "measure taken to comply". The Tasmanian ban, introduced on 20 October 1999, imposes an import prohibition on all imports of salmonids into part of Australia on quarantine grounds. We thus find that it is a measure taken to comply in the sense of Article 21.5.¹⁴³

23. The question of whether a measure is one in the direction of WTO conformity or, on the contrary, maintains the original violation or aggravates it, can, in our view, not determine whether a measure is one "taken to comply". If this were so, one would be faced with an absurd situation: if the implementing Member introduces a "better" measure -- in the direction of WTO conformity -- it would be subject to an expedited Article 21.5 procedure; if it introduces a "worse" measure -- maintaining or aggravating the violation -- it would have a right to a completely new WTO procedure. Our interpretation of "measures taken to comply" is further supported by the practical difficulty of making a distinction between "better" and "worse" measures. Had parts of the new banana regime subject to the Article 21.5 panel requested by Ecuador in EC - Bananas III been "worse" than the original regime, would this have been a reason for the panel to decide that the new regime, or parts thereof, were outside its terms of reference? In our view, it would not, as the Bananas III compliance panel implicitly decided by accepting all elements of the measures brought to its attention.

24. In respect of the second issue - the coverage of Canada's Panel request as far as implementing measures are concerned - several elements have prompted us to decide that the Panel request does, indeed, cover the Tasmanian ban even though the ban was only introduced subsequent to this Panel's establishment and therefore not expressis verbis mentioned in Canada's Panel request.

25. Canada's Panel request refers to the following measures:

"Canada requests that the panel find that Australia has not taken measures to comply with the 6 November 1999 recommendations and rulings of the DSB.

Canada further requests that the panel find that even if Australia has taken or does take measures to comply with the recommendations and rulings of the DSB by implementing the policies for non-viable salmonids products outlined in AQPM 1999/51, those measures are not, or would not be, consistent with the SPS Agreement" (emphasis added).

26. Previous panels have examined measures not explicitly mentioned in the panel request on the ground that they were implementing, subsidiary or so closely related to measures that were specifically mentioned, that the responding party could reasonably be found to have received adequate notice of the scope of the claims asserted by the complainant.¹⁴⁴ In this case, only AQPM 1999/51 of 19 July 1999 was explicitly identified in the Panel request. However, the Panel request also specifies measures that Australia "has taken or does take" to implement AQPM 1999/51, thereby potentially also covering certain future measures. The Panel request also identifies more generally "measures taken to comply" as part of the matter referred to this compliance Panel. None of the parties contest, for these reasons, that AQPM 1999/64, 66, 69, 70, 77 and 79 - all taken subsequent to the Panel's establishment and thus not specifically mentioned in the Panel request -- can be considered by this Panel.

27. For similar reasons, we are of the view that the Tasmanian ban also falls within our mandate. The ban falls within the category of measures specified in the Panel request, namely "measures to comply with the recommendations and rulings of the DSB" that "Australia has taken or does take" or, at least, is so closely related to these measures that Australia can reasonably be found to have received adequate notice of the scope of Canada's claims: first, because of the definition of "measures taken to comply" provided above in paragraphs 22-23; second, because of the often ongoing or continuous character that the matter of implementation - as identified in the Panel request -- takes. What is referred to this Article 21.5 Panel is basically a disagreement as to implementation. One measure was explicitly identified, with the knowledge, however, that further measures might be taken. To exclude such further measures from our mandate once we have found that they are "measures taken to comply", would go against the objective of "prompt compliance" set out in Articles 3.3 and 21.1 of the DSU. To rule that such measures fall within our mandate would not, in our view, deprive Australia of its right to adequate notice under Article 6.2. On the basis of the Panel request Australia should have reasonably expected that any further measures it would take to comply, could be scrutinized by the Panel. We are faced here not with an Australian measure that was unexpectedly included by Canada in its claims, but with a measure taken during our proceedings by Australia, or in this case one of its territorial subdivisions for the acts of which it is in principle responsible under international law, and as part of Australia's implementation process to which Canada subsequently referred. Arguably, the surprise or lack of notice may, indeed, be more real for Canada than for Australia.

28. We do not consider that measures taken subsequently to the establishment of an Article 21.5 compliance panel should per force be excluded from its mandate. Even before an original panel such measures were found to fall within the panel's mandate because, in that specific case, the new measures did not alter the substance - only the legal form -- of the original measure that was explicitly mentioned in the request.¹⁴⁵ In compliance panels we are of the view that there may be different and, arguably, even more compelling reasons to examine measures introduced during the proceedings. As noted earlier, compliance is often an ongoing or continuous process and once it has been identified as such in the panel request, as it was in this case, any "measures taken to comply" can be presumed to fall within the panel's mandate, unless a genuine lack of notice can be pointed to. Especially under the first leg of Article 21.5 when it comes to disagreements on the existence of measures taken to comply, one can hardly expect that all such measures - when there is no clarity on their very existence - be explicitly mentioned up-front in the panel request.

29. On these grounds, we find that the Tasmanian import ban falls within our mandate.

7.11 In a subsequent letter dated 9 December 1999, Australia commented on these preliminary rulings. We address those comments that, in our view, need clarification in footnotes 141, 142 and 143 above.

7.12 As stated there, as well as in paragraph 27 of our preliminary rulings, we are of the view that the Tasmanian ban is to be regarded as a measure taken by Australia, in the sense that it is a measure for which Australia, under both general international law and relevant WTO provisions, is responsible.¹⁴⁶ We note also that the Tasmanian measure is a sanitary measure applied within the territory of Australia that directly affects international trade and thus, pursuant to Annex A, paragraph 1, and Article 1.1 of the SPS Agreement, is subject to the SPS Agreement.

7.13 As recognized by Australia in its letter of 9 December 1999, the Tasmanian measures "could be characterized as � measures taken by 'other than a central government body' in the sense of Article 13 of the SPS Agreement, and would constitute measures 'taken by a regional government' within Australia's territory, in the sense of Article 22.9 of the DSU". Article 13 of the SPS Agreement provides unambiguously that: (1) "Members are fully responsible under [the SPS] Agreement for the observance of all obligations set forth herein"; and (2) "Members shall formulate and implement positive measures and mechanisms in support of the observance of the provisions of this Agreement by other than central government bodies". Reading these two obligations together, in light of Article 1.1 of the SPS Agreement referred to earlier, we consider that sanitary measures taken by the Government of Tasmania, being an "other than central government" body as recognized by Australia, are subject to the SPS Agreement and fall under the responsibility of Australia as WTO Member when it comes to their observance of SPS obligations. In addition, Article 22.9 of the DSU states clearly that "[t]he dispute settlement provisions of the covered agreements [including the DSU itself] may be invoked in respect of measures affecting their observance taken by regional or local governments or authorities within the territory of a Member", including, as acknowledged by Australia, the measures taken by Tasmania at issue here. As a Panel acting under these dispute settlement provisions, we are thus entitled to consider whether the Tasmanian measures observe the SPS Agreement.¹⁴⁷

7.14 At the meeting with the parties on 10 December 1999, Australia notified the Panel - in a letter dated 9 December 1999 -- that the Tasmanian import prohibition of 20 October 1999 was no longer in force and had been replaced with a measure published on 24 November 1999.

7.15 The new measure of 24 November 1999 prohibits the importation of fresh chilled or frozen salmon unless it is demonstrated that the salmon has been derived from fish grown in an area free of six specified diseases. Since Canada is not free from all of these diseases, the new measure effectively bans imports of Canadian fresh chilled or frozen salmon.

7.16 Canada, in a letter dated 16 December 1999, "maintains its position that Tasmania's new measure nullifies even such measures as Australia has taken to comply" and claims that "Tasmania's measure -- whether the original ban or the new measure -- nullifies Australia's own measures taken to comply". Canada refers back to the claims and arguments it made in respect of the original, 20 October 1999, Tasmanian measure. Canada also argues in this letter that it need not seek an independent ruling on the SPS consistency of the new Tasmanian measure, submitting that this measure can be considered "in the context of Australia's compliance". To the extent that this means that there is no need to start new DSU proceedings for the Panel to address also the Tasmanian measures, we agree for the reasons explained in paragraphs 21-28 of our preliminary rulings above. However, to the extent Canada's position implies that, to rule on Canada's claims, the Panel need not decide on the SPS consistency of the ban as such, we disagree for the reasons set out in paragraph 18 of the preliminary rulings above. It is, indeed, impossible to judge the effect of the Tasmanian measure on Australia's federal measures and their compliance with DSB recommendations, without knowing whether the Tasmanian measure is SPS consistent or not.

7.17 At this stage -- where we decide on the Panel's terms of reference -- we need to consider only whether Canada's claims in respect of the new, 24 November 1999, Tasmanian measure fall within our mandate. The reasons set out in our preliminary rulings above lead us to rule that they do.¹⁴⁸

7.18 An additional issue arises, however, from the fact that the replacement of the 20 October measure by that of 24 November, was only notified by Australia to the Panel and Canada at the meeting with the parties on 10 December, and Canada only challenged that measure in a letter dated 16 December 1999. Although these Canadian claims fall within our mandate, this raises the question of whether it is appropriate to examine them in this case.

7.19 On the one hand, we consider that Australia could have notified the Panel and Canada of this change in the Tasmanian measure at an earlier stage in our proceedings. After all, the revocation of the old measure occurred on 18 November and was published, together with the new measure, on 24 November, both dates falling before the due date for the parties' rebuttal submissions (25 November) and well before the Panel's meetings with the parties (8-10 December). In contrast, Australia only notified the new measure on the last day of our meetings with the parties, 10 December. A Panel decision that the new measure cannot be looked at since it was challenged too late, may thus inappropriately benefit Australia.

7.20 On the other hand, it is true that the new measure was challenged late in our proceedings, i.e. after our meetings with the parties. To decide on its SPS consistency without giving Australia the opportunity to defend itself would go against due process. We note, however, that in its letter of 9 December 1999, notifying the new measure, Australia already elaborated on this measure, stating even that "Australian Commonwealth Ministers are on the public record in objecting to such action [both the old and the new Tasmanian measure]". In addition, on 16 December 1999, Australia made another submission "on Tasmanian measures", addressing also the new measure.

7.21 For the reasons stated above, we find that Canada's claims in respect of the new Tasmanian measure fall within our mandate, and shall examine those claims below. To do otherwise would, in our view, go against the principle of prompt settlement of disputes¹⁴⁹ and could hamper implementation of both DSB recommendations in the original dispute and our findings in this case.¹⁵⁰ To make absolutely sure that Australia's due process rights are respected, by letter of 6 January 2000 we gave Australia another opportunity to comment on Canada's challenge of the new Tasmanian measure. Australia submitted those comments on 17 January 2000.

7.22 Since we decided that we can examine both the old and the new Tasmanian measure and the old one is no longer in force, below we limit our substantive examination to the new, 24 November, Tasmanian measure.

150 See Appellate Body report on Australia - Salmon, op. cit., para. 223.

To continue with C. "THE EXISTENCE � OF MEASURES TAKEN TO COMPLY WITH THE RECOMMENDATIONS AND RULINGS" OF THE DSB IN THE SENSE OF ARTICLE 21.5 OF THE DSU.

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