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Appellate Body issues reports regarding tobacco plain packaging requirements

By Bufete Mejía & Asociados - 20/07/2020

On 4 April 2012, Honduras requested consultations with Australia concerning certain Australian laws and regulations that impose trademark restrictions and other plain packaging requirements on tobacco products and packaging.

Honduras challenged the following measures:

-An Act to discourage the use of tobacco products, and for related purposes, Australia's Tobacco Plain Packaging Act 2011, and its implementing regulations;

-The Trade Marks Amendment (Tobacco Plain Packaging) Act 2011; and

-Any amendments, extensions, related instruments or practices.

Honduras claimed that Australia's measures appear to be inconsistent with Australia's obligations under:

-Articles 2.1, 3.1, 15.4, 16.1, 20, 22.2(b) and 24.3 of the TRIPS Agreement;

-Article 2.1 and 2.2 of the TBT Agreement; and

-Article III:4 of the GATT 1994.

On 15 October 2012, Honduras requested the establishment of a panel. On 28 June 2018, the panel report was circulated to Members. In respect of the claims developed by the complainants, the panel found that the complainants had not demonstrated that Australia's tobacco plain packaging measures (the TPP measures) are inconsistent with Article 2.2 of the TBT Agreement on the basis that they are more trade-restrictive than necessary to achieve a legitimate objective;

On 19 July 2018, Honduras notified the Dispute Settlement Body of its decision to appeal to the Appellate Body certain issues of law and legal interpretations in the panel report. Honduras and the Dominican Republic requested the Appellate Body to reverse the panel's conclusions under Article 2.2 of the TBT Agreement, and Articles 16.1 and 20 of the TRIPS Agreement.

On 9 June 2020, the Appellate Body found that Honduras had not substantiated its claim that the panel erred in its application of Article 2.2 to the facts of the case. 

The Appellate Body recalled that, having rejected all of the complainants' claims, the panel had declined Honduras' and the Dominican Republic's requests that the panel recommend, in accordance with Article 19.1 of the DSU, that the DSB request Australia to bring the measures at issue into conformity with the TRIPS Agreement and the TBT Agreement.

Having upheld the panel's findings under Article 2.2 of the TBT Agreement and Articles 16.1 and 20 of the TRIPS Agreement, it followed that the Appellate Body also agreed with the panel that Honduras and the Dominican Republic had not succeeded in establishing that Australia's TPP measures are inconsistent with the provisions of the covered agreements at issue. Accordingly, the Appellate Body made no recommendation to the DSB, pursuant to Article 19.1 of the DSU.

By Bufete Mejía & Asociados - 20/07/2020
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