## Facts

- The European Communities (now the European Union) adopted an “EU Seal Regime” that generally prohibited placing seal products on the EU market, including through import and internal marketing controls.
- The regime was set out principally in Regulation (EC) No. 1007/2009 and its implementing Regulation (EU) No. 737/2010.
- The regime contained limited exceptions, including: (1) an Inuit or other indigenous communities (IC) exception, and (2) a marine resource management (MRM) exception, as well as a narrow travelers’ personal-use exception.
- Canada and Norway challenged the EU Seal Regime in WTO dispute settlement, alleging breaches of the GATT 1994 and the Agreement on Technical Barriers to Trade (TBT Agreement), among other claims.
- The EU defended the regime as addressing EU public moral concerns about seal welfare and relied primarily on GATT Article XX(a) (public morals).
- A WTO panel found multiple inconsistencies and addressed the EU’s Article XX defense. Canada and Norway appealed aspects of the panel’s findings, and the EU raised certain cross-appeal arguments.
- The Appellate Body issued two reports in a single document (AB-2014-1 and AB-2014-2), covering Canada’s and Norway’s complaints, and the Dispute Settlement Body adopted the reports on June 18, 2014.

## Issues

1. Whether the EU Seal Regime was a “technical regulation” subject to the TBT Agreement.
2. Whether the EU Seal Regime, including its IC and MRM exceptions, accorded less favorable treatment to imported seal products contrary to TBT Article 2.1 and GATT Articles I:1 and III:4.
3. Whether the EU Seal Regime was more trade-restrictive than necessary to fulfill a legitimate objective under TBT Article 2.2.
4. Whether the EU Seal Regime could be justified under GATT Article XX(a) as necessary to protect public morals and, if so, whether it satisfied the Article XX chapeau’s requirements against arbitrary or unjustifiable discrimination.

## Decision

- The Appellate Body upheld that the EU Seal Regime constituted a “technical regulation” within the meaning of the TBT Agreement.
- The Appellate Body found that the regime’s design and application—especially through the IC and MRM exceptions—resulted in de facto discrimination against Canadian and Norwegian seal products, inconsistent with TBT Article 2.1 and with GATT Articles I:1 (MFN) and III:4 (national treatment).
- The Appellate Body agreed that addressing EU public moral concerns regarding seal welfare is a legitimate objective and upheld the conclusion that the EU Seal Regime, as a whole, was not more trade-restrictive than necessary under TBT Article 2.2.
- Under GATT Article XX(a), the Appellate Body accepted that measures addressing seal-welfare-related moral concerns can fall within “public morals” and found the regime provisionally justified as “necessary” within Article XX(a), but it failed the Article XX chapeau because the exceptions’ structure and administration led to arbitrary or unjustifiable discrimination (including unequal practical access to the IC exception).
- The Appellate Body recommended that the EU bring its measures into conformity with WTO obligations, signaling that a seal-products prohibition could remain if the exceptions were designed and administered without discriminatory effects.

## Legal Principles

- A measure may qualify as a TBT “technical regulation” when it lays down binding conditions for placing identifiable products on a market, even if framed as a prohibition with defined exceptions.
- Under TBT Article 2.1 and GATT Articles I:1 and III:4, formally origin-neutral rules can still breach non-discrimination obligations when their design and operation modify conditions of competition to the detriment of imported like products.
- Animal-welfare-related concerns may fall within “public morals” under GATT Article XX(a), and public-morals objectives can also be “legitimate objectives” for TBT Article 2.2.
- Under TBT Article 2.2, a complainant must show reasonably available alternatives that would achieve the respondent’s chosen level of protection with less trade restrictiveness; a finding of discrimination under TBT Article 2.1 does not by itself establish a violation of Article 2.2.
- Even when a measure is “necessary” under GATT Article XX(a), it must satisfy the Article XX chapeau by avoiding arbitrary or unjustifiable discrimination between countries where the same conditions prevail; exception design and on-the-ground administration are central to that analysis.

## Conclusion

The Appellate Body largely accepted the EU’s objective of responding to public moral concerns about seal welfare and upheld the regime against a TBT Article 2.2 necessity challenge, but it found that the IC and MRM exceptions operated in a discriminatory manner in breach of TBT Article 2.1 and GATT non-discrimination rules and that the resulting discrimination prevented justification under the GATT Article XX chapeau, requiring the EU to revise how the exceptions were structured and applied.


European Communities—Measures Prohibiting the Importation and Marketing of Seal Products, AB-2014-1, AB-2014-2 (June 18, 2014)