Australia – Certain Measures Concerning Trademarks and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging

Request for consultations by Ukraine

World Trade Organization

WT/DS441/1

G/L/992

IP/D/32

G/TBT/D/41

23 July 2012

(12-4027)

Original: English

The following communication, dated 13 March 2012, from the delegation of Ukraine to the delegation of Australia and to the Chairperson of the Dispute Settlement Body, is circulated in accordance with Article 4.4 of the DSU.

My authorities have instructed me to request consultations with the Government of Australia pursuant to Article 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, Article 64.1 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the "TRIPS Agreement"), Article 14.1 of the Agreement on Technical Barriers to Trade (the "TBT Agreement"), and Article XXII of the General Agreement on Tariffs and Trade 1994 (the "GATT 1994") concerning certain Australian laws and regulations that impose trademark restrictions and other plain packaging requirements on tobacco products and packaging (the "measures").

Australia's measures impose significant trademark restrictions and other so-called "plain packaging" requirements regarding the appearance and packaging of tobacco products. The challenged measures are contained in:

The measures are applicable to all tobacco products grown or manufactured for human consumption.1 They impose criminal penalties for virtually any action, including manufacture, supply, or packaging of tobacco products, that is not in compliance with the "tobacco product requirements" of the Plain Packaging Act and its implementing Regulations.2 The Plain Packaging Act provides that "[n]o trade mark may appear anywhere on a tobacco product" other than as permitted by the Regulations.3 The Plain Packaging Act further provides, inter alia, that "[n]o trade mark may appear anywhere on the retail packaging of tobacco products,"4 other than the brand name, variant, business or company name and other relevant legislative requirements.5 The appearance of the brand name is regulated by the Plain Packaging Act and the implementing Regulations.6

The Plain Packaging Act further requires that tobacco product packages be "drab dark brown" (specified as Pantone 448C in the Regulations) in a matte finish, with no other colors, logos, or brand features visible on the package, other than the brand and variant name in a standard form and font below the graphic health warning.7 Tobacco product packaging will continue to contain graphic health warnings,8 which are increasing from 30 percent to 75 percent of the front surface of each package and continue to cover 90 percent of the back surface of the package.9 The Plain Packaging Act and its implementing Regulations also regulate the physical features of retail tobacco packaging, imposing a standard form on the type and size of the package to be used.10 The Plain Packaging Act provides that cigarette packs and cartons must have a standardized shape with no decorative elements, and that cigarette packs must have flip-top openings.11 The lining of cigarette packs must only be foil backed with paper, or a material allowed by the Regulations.12

Australia's measures, especially viewed in the context of Australia's comprehensive tobacco regulatory regime,13 appear to be inconsistent with a number of Australia's obligations under the TRIPS Agreement, the TBT Agreement, and GATT 1994, including but not limited to the following provisions of these agreements:

These violations nullify or impair the benefits accruing to Ukraine under the aforementioned Agreements.

The Government of Ukraine reserves the right to raise additional claims regarding the measures at issue as a result of the consultations.

The Government of Ukraine looks forward to constructive consultations with Australia in response to this request and welcomes any suggestions that Australia might wish to make concerning the date and location for these consultations.

1 Plain Packaging Act, Section 4.

2 Plain Packaging Act, Chapter 3.

3 Plain Packaging Act, Section 26. Section 26 (2) further states that "No mark may appear anywhere on a tobacco product, other than as permitted by the regulations."

4 Plain Packaging Act, Section 20(1).

5 Plain Packaging Act, Section 20(3). The relevant legislation requirements mean a health warning, a fire risk statement, a trade description and a measurement mark.

6 Plain Packaging Act, Section 21; Regulations, clause 2.4.1.

7 Plain Packaging Act, Section 19; Regulations, clause 2.2.1.

8 Graphic health warnings are regulated under the Australian Consumer Law, contained in Schedule 2 of the Competition and Consumer Act of 2010.

9 Competition and Consumer (Tobacco) Information Standard 2011 which amends the system of health warnings mandated through the Trade Practices (Consumer Product Information Standards) (Tobacco) Regulations 2004 (the 2004 Regulations). Graphic health warnings taking up 75 percent of the front surface of each package are mandatory from 1 December 2012.

10 Plain Packaging Act, Section 18; Regulations, clause 2.1.1.

11 Plain Packaging Act, Section 18(3)(b).

12 Plain Packaging Act, Section 18(3)(d).

13 Australia has in place a generalized advertisement ban for tobacco products, set out in the Tobacco Advertising Prohibition Act 1992 (the "advertisement ban"). In addition, in the eight Australian States and Territories, retail display bans prohibit the public display of tobacco products in specified categories of retail stores (the "retail display bans"). See, e.g., Australian Capital Territory's "Tobacco Act 1927", section 20; New South Wales' "Public Health (Tobacco) Act 2008", section 9; Western Australia's "Tobacco Products Control Act 2006", section 22; Northern Territory's "Tobacco Control Act 2011", section 20; Victoria's "Tobacco Act 1987", section 6(2AA); Tasmania's "Public Health Act 1997", section 72A; Queensland's "Tobacco and Other Smoking Products Act 1998", section 26A; South Australia's "Tobacco Products Regulation Act 1997", section 40. At the state and local level, Australia has also implemented bans on the consumption of tobacco products in certain areas and under certain circumstances ("smoking bans").