On June 13, EU notified the WTO Secretariat of its request for consultations with Indonesia regarding compliance and arbitration issues regarding the case of United States – Measures Affecting the Production and Sale of Clove Cigarettes (DS406), in which the EU is a third party.

Earlier in August 2013, Indonesia has informed the DSB and all other WTO Members that, in its opinion, the US have failed to comply with rulings and recommendations of the DSB since it has not brought the inconsistent measure into compliance with the TBT Agreement.

The EU have adamantly challenged the fact that Indonesia has unilaterally requested sanctions against the US, for failing to comply with the recommendations and rulings of the DSB without requesting a compliance panel to consider the legitimacy of such request. Whereas Article 21.4 of the DSU provides that such a compliance dispute shall only be decided through having recourse to the procedures that are provided in the DSU and wherever possible, having resort to the original panel.

Thus, the EU claims that Indonesia’s recourse to Article 22.2. of the DSU within the context of compliance and arbitration in the case and the exclusion of third parties from the proceedings is inconsistent with Article 21.5, 22.2, 23.1 and 23.2(a) of the DSU as well as with Articles 10.1, 10.2 and 10.3 of the DSU.

The EU hopes that Indonesia will comply with the procedures of the DSU and also, because it has participated as a third party in the proceedings, the EU insists on its right to participate as a third party in any other subsequent proceeding including issues relating to compliance and arbitration.