From the EU response to the Seal Products panel's second set of questions:
Question 108 (European Union) Canada argues that, in examining the existence of specific public morals, "it is relevant whether the conduct arises outside or within the jurisdiction or territory of the Member whose measure is at issue, and whether it can be shown that such conduct would result in harm arising within that Member's jurisdiction or territory." (Canada's response to Panel question No. 48) Please explain whether it is relevant to the Panel's examination of the European Union's stated public morals in this case that seal hunting takes place mostly outside the European Union.
38. The statement by Canada quoted in the Panel question responds to another Panel question on "what evidence is necessary in order to establish the existence of public morals under Article XX(a) of the GATT". Canada's quoted assertion, however, does not explain how or why the circumstances cited by Canada would be 'relevant' for that purpose. Canada's response appears to suggest, nevertheless, that the exception provided in Article XX(a) of the GATT cannot be invoked in respect of conduct which takes place outside the territory of the invoking Member, unless it causes harm within its territory.
39. At the outset, it should be recalled that the EU Seal Regime does not seek to regulate seal hunting, but instead trade in seal products, including imports into its territory. Moreover, the public moral concerns invoked by the European Union in this dispute are not confined to the act of killing of seals as such, but extend also to other acts that take place within the territory of the European Union, such as selling and purchasing seal products, which are deemed morally reprehensible in themselves.30 Therefore, contrary to Canada's assumption, the EU Seal Regime responds to harm that arises within the European Union's jurisdiction.
40. Moreover, Canada's restrictive interpretation has no basis on the text of Article XX of the GATT. Nor is it supported by any relevant authority. In US – Shrimp the Appellate Body left open the question of whether there was an "implied jurisdictional limitation" in Article XX(g) by noting that, in any event, there was a "sufficient nexus" with the United States. Similarly, even assuming that there was such an "implicit jurisdictional limitation" in Article XX(a), there is a "sufficient nexus" with the European Union to the extent that the EU Seal Regime seeks to address the moral concerns of the EU population with regard to conducts that take in place, at least in part, within the EU territory.
41. Moreover, in US – Shrimp the Appellate Body mentioned explicitly Article XX(a) as among the provisions of Article XX that would allow Members to condition imports upon the exporting country adopting certain policies:
It appears to us, however, that conditioning access to a Member's domestic market on whether exporting Members comply with, or adopt, a policy or policies unilaterally prescribed by the importing Member may, to some degree, be a common aspect of measures falling within the scope of one or another of the exceptions (a) to (j) of Article XX. Paragraphs (a) to (j) comprise measures that are recognized as exceptions to substantive obligations established in the GATT 1994, because the domestic policies embodied in such measures have been recognized as important and legitimate in character. It is not necessary to assume that requiring from exporting countries compliance with, or adoption of, certain policies (although covered in principle by one or another of the exceptions) prescribed by the importing country, renders a measure a priori incapable of justification under Article XX. Such an interpretation renders most, if not all, of the specific exceptions of Article XX inutile, a result abhorrent to the principles of interpretation we are bound to apply. 31
42. The European Union also notes that Canada does not appear to contest that the European Union can invoke Article XX(b) of the GATT with regard to conduct occurring in Canada's territory, irrespective of whether such conduct results in harm arising within the EU territory. Thus, it seems that the restrictive interpretation invoked by Canada would limit exclusively the scope of Article XX(a). Again, however, there is no basis for making such distinction between those two provisions of Article XX, either in the wording of Article XX or in the case law of the Appellate Body.
43. In addition, Canada's interpretation would have manifestly anomalous and unreasonable results. For example, according to Canada's interpretation, a WTO Member could not ban imports of pornographic materials produced in a third country unless the acts shown in such materials threatened the health or life of the performers. Similarly, a WTO Member could not ban imports of human organs, unless it could be established that the extraction of the traded organs threatened the life or health of humans (which would not be the case whenever the organs are obtained from a deceased person).
44. Furthermore, as suggested by the Panel question, Canada's argument could be read as implying that, for example, Russia's ban on seal products could be justified under Article XX(a) because Russia has been traditionally engaged in commercial seal hunting. On the other hand, Members without a significant population of seals, or without a tradition of commercial seal hunting, would not be entitled to invoke Article XX(a) and could be forced to accept the marketing of seal products in their territory even if they are regarded as morally repugnant by a large majority of their population.
Will we ever get answers to all the questions related to extraterritoriality? Or will panels and the AB find ways to avoid them forever?
