It’s taken the European Commission a few days to gather its thoughts and feedback from the wine industry following Russia’s recent decision to authorise the label ‘Champagne’ only for Russian-produced sparkling wines. But a response will soon be in the offing – and a dispute invoking EU rights under [the WTO’s trade related intellectual property rights agreement or] TRIPS article 23 might well be around the corner.

The EU is planning a set of “forceful” responses, announced John Clarke who oversees trade at the directorate-general for agriculture in the European Commission on Twitter earlier this week. Geographical indications protection – especially of prestigious wines such as French Champagne – are a core interest in its trade policy.

The new Russian law “conspicuously ignores protected Geographical Indications and appellations of origin of the EU”, the Commission stated.

“The European Commission is evaluating whether this law infringes the commitments of the Russian Federation to the WTO and reserves its right to take the necessary steps to remedy this,” the Commission added.

In response to consultations with representatives of the French wine industry, the Commission said that it “also takes note of the call of the industry to halt exports to Russia.”

The Commission declined to offer any timeframe to announce its next steps.

Article 23 TRIPS agreement vs big geopolitics

Russia committed to protecting Geographical Indications as part of its WTO membership. GIs are protected in the TRIPS agreement for intellectual property.

Article 23 of the TRIPS agreement further offers “Additional Protection for Geographical Indications for Wines and Spirits” – a category where sparkling wine fits squarely.

Article 23 aims to “prevent” the “use of a geographical indication identifying wines for wines not originating in the place indicated by the geographical indication in question or identifying spirits for spirits not originating in the place indicated by the geographical indication”.

Article 23.4 also foresees the establishment of a WTO registry for wines – but negotiations to that end have not been fruitful.

Whether litigation leads anywhere remains to be seen. If the case is won at panel stage, absent the re-establishment of the WTO’s Appellate Body, it is most likely to end in legal limbo as Moscow can be expected to appeal ‘into the void’.

The Russian decision is also perceived as political in nature, as the decision would favour Crimean sparkling wine producers. Russia annexed Crimea in 2014 – the EU and the broader international community have not recognised this step.

This article first appeared in Borderlex here, a bne IntelliNews partner publication.