19 April 1989

5.5 The Panel noted in the first place that paragraph 1(b) of the Protocol served a well determined purpose in a particular historical situation. It was to enable, in 1947, governments to accept the obligations of Part II of the General Agreement without having to adjust their domestic legislation. The drafters of the Protocol expected the General Agreement to be superseded soon by the ITO Charter and they felt that legislative changes should not be required at that time because such changes would have delayed the acceptance of the obligations under the General Agreement and could have prejudged the outcome of the negotiations on the Charter (see Summary Record of the Preparatory Committee of the United Nations Conference on Trade and Employment, E/PC/T/TAC/SR 1, 2 and 6). In the light of this purpose of the existing legislation clause, the Panel considered that it would not be justified to give this clause four decades after the entry into force of the Protocol an interpretation that would extend its functions beyond those it was originally designed to serve.

5.6 The Panel further recalled that paragraph 1(b) of the Protocol had in various circumstances in the past been interpreted by the CONTRACTING PARTIES so as to further the full application of the General Agreement. The following decisions of the CONTRACTING PARTIES were particularly relevant in this respect.

The Panel noted that the parties to the present dispute agreed that this interpretation applied in the present case.

5.7 It follows from the foregoing that to be eligible as "existing legislation" under the Protocol, such legislation must:

(a) be legislation in a formal sense,

(b) predate the Protocol and

(c) be mandatory in character by its terms or expressed intent.

The Panel then proceeded to examine the 1934 Act and the other declarations cited by Norway in the light of these criteria.

5.8 The Panel recalled that Norway argued that, under the constitutional system of Norway, the executive authorities had no option but to restrict imports of apples and pears on the basis of the 1934 Act, after the agricultural policies to be followed by the executive authorities had been defined in the Common Political Programme of 1945 and the Government's principles of agricultural policies had been endorsed in the Storting in 1947. The United States doubted that the Norwegian executive authorities were legally bound to restrict apple and pear imports under the 1934 Act and the parliamentary declarations referred to. In any case an obligation to do so was in its view not apparent from the text of the documents put forward; thus, even assuming the existence of such an obligation, the Act and the declarations surely were not mandatory by their terms or expressed intent.

5.9 The Panel further recalled that when in 1955 and 1958 the CONTRACTING PARTIES requested notification of legislation eligible under paragraph 1(b) of the Protocol, six contracting parties (Canada, Denmark, Germany, the United Kingdom, the United States and the Union of South Africa) notified legislative acts, whereas seven contracting parties (Australia, Ceylon, Finland, Japan, Pakistan, Rhodesia and Nyasaland) declared that they had no such legislation (see document L/2375/Add.1). Although the Panel recognized that there was no legal obligation to make such notification, it did note that Norway did not avail itself of the opportunity to notify on that occasion the Acts and declarations cited in the present dispute.

5.10 In relation to the legislative measures relied upon by Norway, the Panel noted that the application of the 1946 Act (Annex II), which had prohibited all imports save those for which the King had granted express dispensation, was discontinued on the occasion of the introduction of a revised system of import licensing in 1958. The 1934 Act (Annex I) was then revived as the basis for import licensing. The relevant part of the 1934 Act provided that the "King can decide that ... it should be prohibited to import from abroad ... articles or goods, indicated by the King, ...". Under the terms of this Act, the King had discretion to prohibit the import of any commodity. The Panel found nothing in the text of the 1934 Act expressing the intent of rendering the institution of such restrictions mandatory. The Panel recalled that in fact no import restrictions relating to apples and pears had been based on the 1934 Act before the year 1958, restrictions in force before that period having resulted from the 1946 Act. According to its terms, the 1934 Act is enabling, not mandatory in character and can for this reason not be considered as being covered by the existing legislation clause.

5.11 As for the Common Political Programme of 1945 (Annex III) and the Government's White Paper No. 10 (Annex IV), endorsed by the Storting on the occasion of the adoption of the National Budget in 1947, the Panel concluded from the documents and from the explanations provided by Norway that these documents and the discussions which ensued in the Storting had in fact no bearing on import restrictions as such and contained no reference to the subject matter of the present dispute, i.e. import restrictions to be imposed on apples and pears. Though political guidelines could possibly be inferred from them, they could not be considered to be legislation conforming to the criteria enumerated in paragraph 5.7 above, and therefore could not fall within the meaning of the Protocol.

5.12 As for the various developments in the field of agricultural policy which took place after 1947, such as the "Basic Agricultural Agreement" concluded in 1950 and supplemented since by periodic medium-term agreements, several White Papers presented by the Government and recommendations of a Storting Committee, which have been relied upon by Norway (see Annexes V, VI, VII and XII), the Panel noted that these could have no relevance to the application of the existing legislation clause, since they occurred after the date of the Protocol.

5.13 For the reasons stated above, the evidence presented by Norway on the state of the legislation that existed on 30 October 1947 did not show that the Norwegian system of restrictive licensing of the import of apples and pears was based on legislation eligible under the paragraph 1(b) of the Protocol.

6.1 In the light of the considerations set out in Section 5 above, the Panel concluded that Norway's restrictions on imports of apples and pears were not covered by the existing legislation clause of the Protocol of Provisional Application.

6.2 The Panel recommends that the CONTRACTING PARTIES request Norway to bring its measures applying to imports of apples and pears into conformity with its obligations under the General Agreement.

§ 1. The King can decide that, until further notice, it shall be prohibited to import from abroad one or more, by the King indicated, kinds of articles and goods, hereunder live animals and plants, unless there is shown to the customs authorities, at the time of importation, a written declaration from such authority or institution as is appointed by the King, that it consents to the import.

The King can stipulate a fee for the grant of dispensation from the ban on import laid down pursuant to the first paragraph of this section. The King can likewise lay down the conditions on which such dispensation may be granted.

Insofar as a compensatory levy payable to the Treasury is imposed on agricultural products subject to import restrictions, the Ministry shall lay down more detailed provisions regarding the computation and collection of such compensatory levies and the supervision of the arrangement. The King stipulates the agricultural products on which a compensatory levy is to be imposed.

The money received through collection of such compensatory levies goes into a fund. The fund is administered by the Ministry in accordance with regulations laid down by the King for the administration of the fund and the utilization of its moneys.

§ 2. The King can decide, with force until further notice, that the import from abroad of one or more kinds of articles and goods, indicated by the King, as mentioned in § 1, must not exceed a certain, by the King stipulated, quantity within a certain period stipulated by the King.

§ 3. The King can decide, with force until further notice, that all purchases from abroad of one or more, by the King indicated, kinds of articles and goods as mentioned in § 1, including purchases on deliver-contracts, shall, within a certain time-limit calculated from the time when the purchase was effected, be reported to such authority as the King decides, accompanied by such additional information as the King prescribes. It may be decided that the duty to report and to give information shall apply also to purchases effected before the King's decision became effective, provided that it relates to goods then not yet delivered. With such exceptions as the purpose of the reporting duty may render necessary, the authority concerned must retain secrecy with regard to such information as it receives, provided that rules to the contrary have not been specially laid down by statute. Sections 13 to 13 e of the Public Administration Act do not apply.

§ 4. Anyone who intentionally or negligently imports, or attempts to import, articles or goods contrary to a ban on import laid down pursuant to § 1, or who is an accessory thereto, is punished by fines or imprisonment up to 6 months.

Intentional or negligent transgression of regulations issued by virtue of paragraph 3 is punished by fines.

§ 5. The supplementary regulations for the implementation of this Act are issued by the King.

§ 6. The Act enters into force at once. From the same time the Act relating to provisional ban on import of 22 March 1918 and the Act relating to import of coal, coke and cinders of 24 June 1933 are repealed. The regulations issued by virtue of these Acts shall remain in force until they are repealed or succeeded by regulations issued by virtue of this Act. As regards penalty in connection with transgression of such regulations, the provisions in § 4 shall apply correspondingly.

§ 1. Without a special licence (import licence) nobody must import objects and goods of any kind - including live animals - from abroad, Spitzbergen Jan Mayen and lands placed under Norwegian sovereignty as dependencies.

The King may grant dispensation from the ban.

§ 2. The King or anyone authorized by him issues an import licence. Special conditions may be laid down for the licence.

For licences a fee shall be paid as determined by the King. The fee can be collected by distraint.

§ 3. Everybody must submit to the Ministry concerned the information requested in order to implement the provisions of this Act, such as a statement of import of objects and goods which pursuant to the 2nd paragraph of § 1 do not come under the ban of the first paragraph of the same section. On request, accounting books, commercial documents and other documents, which the Ministry considers of importance for the case, must be presented. If necessary the Ministry may order the police to inspect such books and documents.

When the Ministry has so decided, public authorities in charge of tax assessment and control of the turnover tax may be allowed to obtain the information submitted in accordance with this Act.

Insofar as obligations connected with a public office do not prevent this everybody shall observe silence with regard to information obtained in their official capacity under this Act.

§ 4. The King may issue more detailed regulations for the implementation of this Act.

§ 5. If anybody has intentionally:

§ 6. If an offence as mentioned in § 5 is committed in a commercial occupation which the offender carries on for his own account or for others, he may by court decision be deprived of his right to carry on such occupation for such time and to such extent as the court decides, but not for more than 5 years. A person who has been deprived of his right to carry on such activity cannot be a manager or director or occupy any other leading position in a commercial undertaking, whether it be a personal firm, company, association or corporation, in such fields of activity as mentioned in the judgment, nor can he be a board member or occupy any other position of trust in a company, association or corporation as mentioned.

The objects and goods imported or attempted to be imported in contravention of this Act or regulations issued by virtue of the Act, may be confiscated by a court decision without regard to ownership and without regard to whether penal prosecution may be instituted against anybody. This also applies to such objects and goods which anyone has disposed of or attempted to dispose of in contravention of conditions laid down by virtue of this Act. If the objects or goods mentioned cannot be confiscated, their value - all or in part - may be seized from the offender or any person for whom he acted, without penal prosecution being instituted or being possible against anyone.

§ 7. This Act enters into force at once.

The provisional regulations of 20 July 1945 relating to the ban on imports shall be repealed from the same time.

Regulations issued by virtue of the said regulations shall be valid until they are repealed or replaced by regulations issued by virtue of this Act.

"3. Our agricultural policy must give agriculture a status comparable to that of other industrial sectors and aim at an equalization of living conditions in the country. The farm is ensured as the family's property and the basis for the farming profession. Increased efforts to reclaim new land and to bring our arable land into good tillable condition. Further development of social security arrangements and of marketing organizations. Our agricultural production must, as far as possible, be based on Norwegian material in order to reduce gradually the imports of feed concentrates. Practical arrangements in order to facilitate farmers access to the results of research and to modern equipment and imports. Establishment of drying plants and cold stores for vegetables and fruit. Prices and transportation facilities shall be regulated with the aim to ensure the profitability of orderly, well managed, family farms without resulting in agricultural products being unnecessarily expensive to the consumers. The question of tractive power on small farms shall be resolved."

Inasmuch as population trends indicate that an absolute decline in the agricultural population is to be expected in the next twenty years, agricultural policy will have to solve the problem of maintaining or even increasing production at the same time as the availability of labour declines. Moreover, the agricultural population must be ensured living conditions that are on a par with those of other occupational groups in society, and the cost of production must be kept at a reasonable level. In the years ahead, the objective must be to produce what the country needs of milk, meat, pork, eggs, cheese, vegetables and some fruits, a large share of the edible fats and a reasonable share of the grain using less labour than that employed in agriculture today and without importing an unreasonably large quantity of concentrates. Becoming very much more self-sufficient, e.g., by cultivating most of the grain we need, would prove too costly, and would thus impede the development of our standard of living. However, regard must nevertheless be had for the supply situation in the event of war or a blockade. In defining the more specific, concrete objectives of agricultural policy, due emphasis must be placed on market stability, demographic policy considerations and the social and cultural considerations indicating that a reasonable share of the population should be involved in agriculture. There should be very good possibilities of realizing these objectives.

It is probable that the present tendency to include more fruit and vegetables in the diet will continue. Therefore, it is very important that the production of these goods become more effective. The aim should be to meet a greater share of the demand on a regular basis with Norwegian produce. This will require the building of more refrigeration plants and storage facilities.

... As much as possible of the demand for fruit ... should be met.

It is very important that the production of fruit and vegetables become more effective, and the aim should be that more of the domestic demand be met on a regular basis by Norwegian products.

The Ministry is of the opinion that more importance should be attached to horticulture on the smaller farms, and that the market should receive a more even supply of fruit ... . In order to facilitate this, proposals for supporting production co-operatives will be considered. The idea is also to discuss proposals concerning support for erecting appropriate facilities in which these products can be stored during the winter.

In general, the Committee supports the Ministry on this point. Everyone would agree that it would be desirable for the smaller farms to begin to concentrate more on garden/nursery products and vegetables. The fact is that statistics show that, in terms of percentage, the smaller farms have the largest available area for such production.

As regards the question of extending the period during which fruit ... may be imported without restrictions and amending the customs tariff in this area, the Committee states that great caution must be exercised, and that such matters must be viewed in the light of the desirability of increasing the cultivation of such products on smaller farms. The desirability of achieving a greater degree of self-sufficiency on a year-round basis as regards these products is another argument in favour of this view.

§ 4

Potatoes, fruit, berries, vegetables, live plants

and parts of plants

A. Pursuant to the Act of 22 June 1934 relating to a provisional ban on imports, etc. the Ministry of Agriculture is authorized to make decisions concerning bans on the import of ... the types of fruit ... in respect of which the Working Group on the future import regime for fruit, berries, etc., has proposed import restrictions in a recommendation of 3 June 1957. Cf. Appendix I. -- The Import Advisory Council will submit a proposal concerning the scope of the import ban.

B. An Import Advisory Council comprising the following members is to be appointed:

The members of the Council and their personal deputies are to be appointed by the Ministry of Agriculture on the basis of proposals submitted by the institutions and organizations to be represented on the Council. The Ministry of Agriculture shall issue specific regulations concerning the activities of the Import Advisory Council.

The Chairman shall be appointed by the Ministry of Agriculture.

C. The various categories of goods shall be regulated during the following periods:

3. Fruit:

As regards other products subject to import restriction within each of these categories, and live plants and parts of plants, the duration of the restricted period is to be stipulated after proposals have been received from the Import Advisory Council.

D. As a basis for determining prices, weekly target prices and upper price limits for the most important types of goods are stipulated after proposals have been received from the Import Advisory Council.

For each period, the Import Advisory Council takes as its basis the average price of quality grade Standard I of the representative goods ... and apples as registered by the Price Commission for Agriculture for the years 1955-57 ... to which 8 per cent is added. This price is considered to be the target price. The upper price limit is set at 12 per cent above the target price. The prices of other types of goods are determined according to the same principles.

E. When the annual crop deviates from a normal annual harvest, the Import Advisory Council proposes changes in the restricted periods and target prices. The crop for a normal year budgeted by the Budget Commission and the Director General of Agriculture's report on the status of the annual crop are used as a basis.

F. When the price of Norwegian products has exceed the upper price limit for two consecutive weeks of the restricted period, the import of the product in question is freed. The free import of such products is suspended again when the price of Norwegian products equals or is less than the upper price limit. It is required that products ordered during free periods be cleared at the latest one week after unrestricted import has been suspended. Upper price limits may also be stipulated as a maximum price.

The price quotations used as a basis are those applying to bulk delivery c.i.f. Oslo. The prices are quoted every Tuesday.

The import Advisory Council proposes the amount and time of supplementary imports considered necessary at any given time to meet market demands in a reasonable manner with a view to the target prices referred to in section 4 D.

The Import Council also submits specific proposals concerning the distribution and sale of supplementary imports.

Imports are unrestricted outside the restricted periods.

Pursuant to the Act of 22 June 1934 relating to a provisional ban on import etc. it is hereby decreed:

§ 1. Until further notice, it shall be prohibited to import to the country

. . . . .

fruits ...

. . . . .

§ 3. The Ministry of Agriculture may make general regulations relating to exemption from the ban on import, and the Ministry may likewise provide that it shall be permissible for a special period to import certain quantities of one or more of the products specified above.

The Ministry of Agriculture shall ensure that the ban on import is only enforced to such extent as is compatible with Norway's obligations under current international agreements.

In special cases the Ministry of Agriculture may grant dispensations from the ban, and the Ministry may likewise apportion the limited quantities permitted to be imported for specific periods.

. . . . .

§ 4. These provisions shall come into force from the date fixed by the Ministry of Agriculture.

. . . . .

§ 1. Until further notice, it shall be prohibited to import to the country:

. . . . .

G. Fruit and berries:

1. Apples.

2. Pears.

. . . . .

§ 3. The Ministry of Agriculture may make general regulations relating to exemption from the ban on import, and the Ministry may likewise provide that it shall be permissible for a specific period to import certain quantities of one or more of the products specified above.

The Ministry of Agriculture shall ensure that the ban on import shall only be enforced to such extent as is compatible with Norway's obligations under current international agreements.

In special cases the Ministry of Agriculture may grant dispensations from the ban, and the Ministry may likewise apportion the limited quantities permitted to be imported for specific periods.

. . . . .

§ 4. These provisions shall come into force from the date fixed by the Ministry of Agriculture.

§ 1. Until further notice, it shall be prohibited to import to the country:

. . . . .

O. Fruit and berries:

1. Apples.

2. Pears.

. . . . .

§ 2. The Ministry of Agriculture may make general regulations relating to exemption from the ban on import, and the Ministry may likewise provide that it shall be permissible for a specific period to import certain quantities of one or more of the products specified above.

The Ministry of Agriculture shall ensure that the ban on import shall only be enforced to such extent as is compatible with Norway's obligations under current international agreements.

In special cases the Ministry of Agriculture may grant dispensations from the ban, and the Ministry may likewise apportion the limited quantities permitted to be imported for specific periods.

. . . . .

§ 3. These provisions shall come into force on 1 July 1960.

I. Section 1 of the Royal Decree of 2 June 1960 prohibiting the import of certain agricultural products, etc., shall read as follows:

Until further notice, it shall be prohibited to import to the country:

. . . . .

O. Fruit and berries:

1. Apples during the period 1 May to 31 January.

2. Pears during the period 11 August to 19 December.

. . . . .

II. The amendments enter into force on 1 July 1973.

With reference to the Committee's deliberations on market possibilities and production objectives, the Ministry is of the opinion that our agricultural policy must in the main continue to be based on the production objectives set out in the White Paper No. 60 of 1955.

. . . . .

As regards fruit ..., the aim should be to meet as much of the domestic demand as possible through domestic production. However, out of consideration for supply, it must be permitted to import such fruit ... in the seasons during which the demand cannot reasonably be met by Norwegian production.

. . . . .

According to the Common Political Programme of 1945 and the Storting decision of 2 October 1947, respectively, agricultural policy "must place agriculture on an equal footing with the other sectors and aim at an equalization of living conditions in the country", and it must see to it that "the income and income potential of agriculture does not deteriorate in relation to that of other sectors." This has been the fundamental principle of agricultural policy throughout the entire post-war period. In the annual national budgets, the long-term programmes for 1954-57, 1958-61, 1962-65, and White Paper No. 60 on guidelines for the development of agriculture, it is specified that the main objective of agricultural policy is to develop a system of agriculture which is rational from an economic point of view and which can place the agricultural population on an equal economic footing with those in other sectors of society.

. . . . .

3. Marketing and market-stabilizing measures

a. Introduction

As far as agricultural production is concerned, the objective is to meet the domestic demand for livestock products and to produce as large a share of the plant products as is considered possible and reasonable. The consumer should be ensured regular access to good foodstuffs at reasonable prices. furthermore, the agricultural population should be ensured incomes that are reasonable in relation to those of the rest of the population.

If these objectives are to be realized, measures to safeguard market opportunities are called for. There are many measures that could be implemented, and these have varied according to circumstances. The recommendation of the Market Committee includes a detailed account of the market and market-stabilizing measures that might be implemented.

In general, a distinction may be made between three main categories of measures: Firstly, those that are manifested in price policy; secondly, other domestic market-stabilizing measures; and thirdly, import policy measures.

. . . . .

Earlier, duties on agricultural products were the major means of protecting the agricultural sector against external competition. During the interwar period, the duty on certain agricultural products was increased considerably, making it possible to ensure better market conditions for Norwegian agricultural products.

In the years following World War II, duties on agricultural products had less significance as a means of protecting agriculture. This is partly attributable to the fact that an almost total ban on the import of agricultural products was imposed during this period. The rise in prices during and following the war had also reduced the actual protection the duties were originally intended to provide.

The use of duties to protect agriculture has also been reduced as a result of Norway's membership of the GATT. Norway has agreed to a number of tariff concessions within the organization, i.e., Norway has undertaken to refrain from increasing the duties on certain goods beyond an agreed limit for a specified period of time. In principle, there are no restrictions on increasing duties that are not bound. Norway's international trade interests will, however, serve to limit such activity.

By means of quantitative import restrictions, imports can be adapted at any given time to domestic production and demand such that prices are kept at or above specified levels.

At present, quantitative import restrictions are the most important means of protecting Norwegian agriculture and, at the same time, a prerequisite if the economic support schemes employed thus far are to have the intended effect. As far as most of the products are concerned, the current import arrangements are the same as those that were set out in the Agricultural Agreement for 1958-61 and which have been prolonged in subsequent agreements.

The main guidelines are based on a provisional recommendation of 8 February 1958 from the Market Committee.

In brief, the existing arrangements involve a price-related import ban on ... fruit ... . The ban shall apply only when domestic price quotations remain below a prescribed upper limit. Should the price quotation exceed the upper price limit for two consecutive weeks, free import is permitted for as long as the price exceeds the upper limit. As regards a number of horticultural products, import restrictions are limited to specific periods of the year when Norwegian production will normally be able to meet the market demand. With the exceptions of these restricted periods, imports are expected to be unrestricted.

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