One of the main concerns is with respect to their interpretation of Article XX(a), the public morality, the bar that they set in terms of GATT article XX(a), and the invocation of a ban on the basis of preserving public morality.
Specifically, as Kevin said, there's the word “necessary” in that very short line of article XX(a). It says it's necessary to protect public morals—or whatever the words are—and so there's a necessity test. What we have argued, and what we are very concerned about, is that the EU has not passed that test and that the panel erred in concluding that they had met that necessity test.
Those exemptions are only available in situations and to members who can demonstrate the necessity of them in order to accomplish a legitimate end.