Interpretation of the Security Exception in WTO ‎in the Light of the Panel Report in Russia-‎Ukraine Dispute‎

Document Type : Research Paper

Authors

1 Associate Professor in Civil and Islamic Law Group of Faculty of Law ‎and Political Sciences of University of Tehran

2 Ph.D. in Oil and Gas from University of Faculty of Law and Political ‎Sciences of Tehran

Abstract

 
Abstract
World Trade Organization was founded with the purpose of freeing the trade between its members, in accordance with the principles of guaranteeing free trade among its members, the reduction of tariffs, the elimination of all forms of trade discrimination, and the transparency of trade laws and regulations. Nevertheless, the freedom of trade without any limits would concern the countries for their sovereignty and national security. Therefore, beside the general exceptions embodied in article 20, the article 21 of GATT was drafted under the title of security exceptions. This article reads as follows:
“Nothing in this Agreement shall be construed:
(a) to require any contracting party to furnish any information the disclosure of which it considers contrary to its essential security interests; or
(b) to prevent any contracting party from taking any action which it considers necessary for the protection of its essential security interests
  (i)   relating to fissionable materials or the materials from which they are derived;
(ii) relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on directly or indirectly for the purpose of supplying a military establishment;
 (iii)   taken in time of war or other emergency in international relations; or
 (c) to prevent any contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.”
                                                                                          
 
From the very beginning of the entry of GATT into force in 1947, until the foundation of WTO and thereafter, the interpretation of article 21 has been a subject of debate between the States and in the relevant literature. The main question in the interpretation of this article is to what extent the State-parties to GATT 1947 (and the members of WTO) have the freedom to invoke article 21, specifically, its paragraph (b). Can refraining by a State from its obligations by invoking this article be objected by other States or assessed by the Dispute Settlement Body (DSB)? We have suggested in this article that security exceptions are not specific to GATT and that several investment treaties, such as the Treaty of Amity, Economic Relations and Consular Rights between Iran and USA, also include similar exceptions. Nevertheless, in a general categorization, the security exceptions are drafted in two different methods. In the first, the language used for the security exception implies a degree of autonomy for States in recognizing security emergency and invoking it. The article 21 of GATT, as can be easily attested, falls in this category. Without using ancillary principles of interpretation, a reader could not reasonably assume any limit for the State’s discretion in invoking the security exception. The first method has thus been called the “self-judging” wording. In the second method, the language used in a treaty does not imply any self-judging property for the security exception. Article 20-1 of the Treaty of Amity between Iran and the USA has been drafted in this latter method. Through the negotiations of GATT in 1947, the security exception was inserted following a proposal from the USA. The history of drafting and resolution of this article shows that it has been found ambiguous from the outset of its drafting. At the 1947 and 1994 rounds, a number of different interpretations for article 21 have been presented. According to one interpretation, any State has full autonomy to recognize national emergency and to legitimately invoke article 21, and such autonomy cannot be objected by other States or assessed by the DSB. According to a second interpretation, although States have full autonomy to recognize national emergency, they shall observe good faith while invoking article 21. In accordance to a third interpretation, although States can themselves determine their security interests, the legitimacy of their invoking of article 21 can, without any boundaries, be retrospectively assessed by the DSB. The thesis proposed in this article is that the first interpretation is not acceptable as the State-parties cannot have limitless freedom to invoke article 21 and that the legitimacy of invoking this article can be assessed by the DSB by considering objective standards, such as good faith. The DSB itself acknowledged the same approach in Russia- Measures Concerning Traffic in Transit. In this case, the panel primarily considered whether it has the jurisdiction to qualify the legitimacy of invoking article 21by Russia. The panel reasoned that since the article 21(b) enumerates a limited number of scenarios, the members can only invoke that paragraph in the event one of those scenarios occur. In addition, the panel found that the emergency circumstances are objective in nature. This objectivity confers the panel to assess the legitimacy of invoking paragraph (b). Since the resources for this study include essays, books and the awards rendered by the DSB, this article first briefly reviews the sources using library research and,
then, using descriptive analytic method, attempts to examine the core of the controversy, explore the history of its emergence and evolution, and evaluate the contending readings involved, analyzing both the views submitted in the literature  and the positions adopted practically by the States and the DSB.

Keywords


  1. John O’Connor (1991). Good Faith in International Law, Dartmouth Publications Company.
  2. Peter van den Bossche & Werner Zdouc (2013). The Law and Policy of the World Trade Organization: Text, Cases, and Materials, Cambridge University Press, 3rd edition.
  3. Steven G Medema (2003). The History of Economic Thought: A Reader , Routledge Publications.
  4. Andrew Emmerson (2008). “Conceptualizing Security Exceptions: Legal Doctrine or Political Excuse?”, Journal of International Economic Law, Vol. 11, Iss. 1, pp. 135–154, DOI: https://doi.org/10.1093/jiel/jgm046.
  5. Dapo Akande and Sope Williams (2003). “International Adjudication on National Security Issues: What Role for the WTO”, Virginia Journal of International Law, Vol. 43, No. 2, pp.386-392, available at: < https://www.google.com/url?

sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjQtMvthKX1AhWehP0HHbizAVYQFnoECAIQAQ&url=https%3A%2F%2Fwww.ilsa.org%2FJessup%2FJessup2020%2FBasic%2520Materials%2FBogdanova%252C%2520WTI%25201-2019.pdf&usg=AOvVaw0RzEvqVbngS57AqLE9ZvKs> accessed on 8.11.2020.

  1. Daria Boklan & Amrita Bahri (2020). “The First WTO's Ruling on National Security Exception: Balancing Interests or Opening Pandora's Box?,” World Trade Review, Vol. 19(1), pp. 123-136, DOI: https://doi.org/10.1017/S1474745619000430.
  2. Hannes L. Scholemann & Stefan Ohlhoff (1999). “Constitutionalizing and Dispute Settlement in the WTO: National Security as an Issue of Competence”, American Journal of International Law, Vol. 93, pp. 424-451, DOI: https://doi.org/10.2307/2997999.
  3. Ji Yeong Yoo & Dukgeun Ahn (2016). “Security Exceptions in the WTO System: Bridge or Bottle-Neck for Trade and Security?”, Journal of International Economic Law, Vol. 19, Issue 2, pp. 417-444, DOI: /10.1093/jiel/jgw049.
  4. Raj Bhala (1998) “National Security and International Trade Law: What the GATT Says, and what the United States Does Symposium on Linkage as Phenomenon: An Interdisciplinary Approach”, University of Pennsylvania Journal of International Law, Vol. 19, Iss. 2, pp. 263-317, available at: https://scholarship.law.upenn.edu/jil/vol19/iss2/4

 >, accessed on 5.10.2020.

  1. Roger P. Alford (2011). “The Self-Judging WTO Security Exception”, Utah Law Review, No. 3, pp. 697-759, available at: <

   https://scholarship.law.nd.edu/law_faculty_scholarship/330>, accessed on 8.9.   2020.

  1. Tania Voon (2019). “Can International Trade Law Recover? The Security Exception in WTO Law: Entering a New Era”, American journal of International Law, Vol. 113, pp. 45-50, DOI:./10.1017/aju.2019.3.
  2. Dimink Eisenhut (2010). “Sovereignty, National Security and International Treay Law, the Standard of Review of International Courts and Tribunals with Regard to Security Exceptions”, Archiv des Volkerrechts, Vol. 48, No. 4, pp. 431-466, DOI: 10.1628/000389210794439362.
  3. Susan Rose Ackermann and Benjamin S. Billa (2008). “Treaties and National Security” International Law and Politics, Vol. 40, pp. 1-36, available at: < https://www.researchgate.net/publication/228218149_Treaties_and_National_Security> accessed on: 3.10.2020.
  4. Robin Briese & Stephan Schill (2009). “Self-Judging Clauses before the International Court of Justice”, Melbourne Journal of International Law, Vol. 10, iss. 1, pp. 308-328, available at: < https://search.informit.org/doi/10.3316/INFORMIT.981988571807026 >, accessed on 30.10.2020.
  5. Appellate Body Report, EC-Chicken Cuts (12, Sep, 2005). at WT/DS269/AB/R, retrieved from <https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=Q:/WT/DS/286ABR.pdf> (visited on 23 March, 2020).
  6. Appellate Body Report, Japan-Alcoholic Beverages 2, (4, October, 1996) at WT/DS8/AB/R, retrieved from <https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009-DP.aspx?language=E&CatalogueIdList=32900&CurrentCatalogueIdIndex=0&FullTextSearch> (visited on 23 March, 2020).
  7. Appellate Body Report, United States– Standards for Reformulated and Conventional Gasoline, (20 May 1996) at WT/DS2/AB/R, retrieved from < https://docs.wto.org/dol2fe/Pages/FE_Search/FE_S_S009.aspx?language=E&CatalogueIdList=14573&CurrentCatalogueIdIndex=0&FullTextHash= > (visited on 23 March, 2020).
  8. Appellate Body Report, US-Antidumping and Countervailing Duties, (11, March, 2011), at WT/DS379/AB/R, retrieved from <https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?

  filename=Q:/WT/DS/379ABR.pdf> (visited on 23 March, 2020).

  1. Department of State, The United States of America, Proposals for Expansion of World Trade and Employment, (dated Nov. 1945), retrieved from https://fraser.stlouisfed.org/files/docs/historical/eccles/036_04_0003.pdf> (visited on 23March, 2020).
  2. GATT Council, Decision Concerning Article XXI of the General Agreement, (1982) L/5426, retrieved from < https://www.wto.org/gatt_docs/english/SULPDF/91000212.pdf> (visited on 23 March, 2020.
  3. GATT Council, Minutes of Meeting Held in the Centre William Rappard on May 29, 1985, (June 28, 1985), C/M/188, retrieved from <http://www.wto.org/gatt_ docs/English/SULPDF/91150029.pdf> (visited on 23 March, 2020).
  4. GATT Council, Summary Record of the Twenty-Second Meeting, (June 8, 1949) at 9, CP.3/SR.22, retrieved from <http://www.wto.org/gatt_docs/English/SULPDF    < /90060100.pdf.> (visited on 23 March, 2020).
  1. GATT Summary Records of the Twelfth Meeting, (28. Sep. 1951) at GATT/CP.6/SR.12, retrieved from < https://docs.wto.org/gattdocs/q/GG/GATTCP6/SR12.PDF> (visited on 23 March, 2020)
  2. GATT, Minutes of Meeting held in the Palais des Nations, Geneva, on 31 October 1975, (dated on 10 Nov. 1975) C/M/109.
  3. International Court of Justice (1997), Case Concerning Gabčíkovo-Nagymaros Project.
  4. Panel Report, United States—Trade Measures Affecting Nicaragua, L/6053 (Oct. 13, 1986), retrieved from < https://www.wto.org/english/tratop_e/dispu_e/gatt_e/dispu_e/    gatt_e/85embarg.pdf> (visited on 23 March, 2020).
  1. United Nations Economic and Social Council, second session of the preparatory committee of the united nations conference on trade and employment, 1947, retrieved from <https://docs.wto.org/gattdocs/q/UN/EPCT/APV-33.PDF> (visited on 23March, 2020)
  2. United Nations Economic and Social Council, Sixth Committee: Organization, Sub-Committee I (Article 94), Notes of the First Meeting, E/CONF.2/C.6/W.26 (dated on 9 Jan. 1948), retrieved from < https://docs.wto.org/gattdocs/q/UN/ECONF2/C6-W26.PDF> (visited on 23 March, 2020).
  3. GATT Council, Minutes of Meeting Held in the Centre William Rappard on May 7, 1982, C/M/157, at 12 (June 22, 1982) retrieved from   <http://www.wto.org/gatt_docs/english/sulpdf/90440042.pdf> (visited on 23 March, 2020).
  1. International Center for Settlement of Investment Disputes, CMS Gas Transmission Company v. The Argentine Republic (12 May 2005) ARB/01/8.
  2. International Court of Justice, Case Concerning Military and Paramilitary Activities in and Against Nicaragua (27 June 1986).