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Adjudication of the GATT Security Clause: To Be or Not to Be, This is the Question

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Abstract

Amidst the severe crisis the WTO’s crown jewel is facing these days, the WTO tribunals are confronted with another perplexed matter – adjudication of the security exception. In a number of the ongoing disputes the parties invoked national security to justify their trade-restrictive measures. The interpretation of the security exception raises a number of vexed questions. Before delving into the discussion of the interpretative intricacies, it is prudent to inquire whether the WTO tribunals have jurisdiction over the security clause and if it is justiciable.
Adjudication of the GATT security
clause: to be or not to be, this is the
question
Iryna Bogdanova
WTIWorkingPaperNo.01/2019
Adjudication of the GATT security clause: to be or not to be, this is the question
Iryna Bogdanova
Introduction ..........................................................................................................................................................2
Arguments of the parties in Russia - Measures Concerning Traffic in Transit dispute (DS512) ...........................5
A. Arguments of the Russian Federation ......................................................................................................5
B. Arguments of the United States ...............................................................................................................5
C. Arguments of Australia .............................................................................................................................6
D. Arguments of the European Union ..........................................................................................................7
Our analysis ..........................................................................................................................................................8
A. The WTO tribunals’ jurisdiction over the security exception ...................................................................8
I. General observations on the WTO tribunals’ jurisdiction ..................................................................... 8
II. The practice of the International Court of Justice in ascertaining jurisdiction over the security
clauses ........................................................................................................................................................ 10
B. Justiciability of the security exception .................................................................................................. 13
I. The general rule of interpretation and justiciability of the security exception .................................. 15
II. Subsequent practice and the justiciability of the security exception .................................................. 18
III. The legalization of the dispute settlement and justiciability of the security exception ..................... 21
Conclusion ......................................................................................................................................................... 21
Abstract
The interpretation of the GATT 1994 security exception raises a number of vexed questions.
Thus, the WTO Members deliberately refrained from relying upon the security exception to justify
trade-restrictive measures. Yet it seems that the utmost caution with regard to the security clause
is in the past: the Russian Federation invoked the security exception in a recent dispute with
Ukraine.
In the present article, we discuss the WTO tribunals’ jurisdiction over the security exception
as well as justiciability of the security clause. The article starts with a brief summary of the
arguments, expressed by the WTO Members in the ongoing dispute between Ukraine and the
Russian Federation. The article proceeds with the vigorous debate on the jurisdiction over the
security exception. The inquiry into the justiciability of the security clause follows. The paper
affirms jurisdiction and justiciability of the security exception, but argues in favor of the partial
deference granted to the WTO Members invoking Article XXI of the GATT 1994.
Iryna Bogdanova, a PhD candidate at the World Trade Institute, University of Bern, Switzerland.
(Iryna.Bogdanova@wti.org). I am grateful to Professor Thomas Cottier and Zaker Ahmad for their comments on the
earlier drafts. Any errors that remain are my sole responsibility.
1
Introduction
The current crisis between Ukraine and the Russian Federation brought into being numerous
economic sanctions imposed by both sides of the conflict as well as by other states. These
sanctions, which consist of various trade restrictions, gave a new impetus to the debate on their
alleged WTO-inconsistency and a possible invocation of the security exception as justification.1
Despite the official statements on the sanctions’ incompatibility with the WTO commitments2, none
of the WTO Members has challenged them.3 Yet, the military tension between the two countries
still triggered the invocation of the security exception in the dispute regarding restrictions on
transit.4
The interpretation of the security exception is not only crucial for the ongoing dispute
between Ukraine and the Russian Federation, but also for the dispute between Qatar and the
United Arab Emirates, where the United Arab Emirates will allegedly rely upon the security
exception.5 Furthermore, the additional import duties on steel and aluminum imposed by the
United States triggered a number of consultation requests from the affected WTO Members.6
These requests for consultations were followed by the requests to establish a panel. The United
States justifies these additional duties on the national security grounds.7 Therefore, it is hard to
deny that this inquiry is clearly well-timed.
1 Rostam J Neuwirth and Alexandr Svetlicinii, ‘“The Economic Sanctions over the Ukraine Conflict and the WTO: ‘Catch-
XXI’ and the Revival of the Debate on Security Exceptions”’ (2015) 49 Journal of World Trade 891.
2 Shawn Donnan and Kathrin Hille, ‘Russia Threatens US with WTO Action over Crimea Sanctions’ Financial Times (16
April 2014) <https://www.ft.com/content/5418ad46-c57c-11e3-97e4-00144feabdc0> accessed 18 November 2018;
Benjamin Fox, ‘Poland Demands WTO Challenge over Russia Food Ban’ (20 August 2014)
<https://euobserver.com/news/125295> accessed 18 November 2018.
3 The Russian Federation initiated the consultations with Ukraine regarding restrictive economic measures (economic
sanctions) unilaterally imposed by Ukraine (DS525). The parties are in consultation since 19 May 2017.
4 ‘WTO | Dispute Settlement - DS512: Russia Measures Concerning Traffic in Transit’
<https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds512_e.htm> accessed 18 November 2018.
5 The United Arab Emirates raised the security exception justification during the DSB meeting, on which Qatar
requested establishment of a panel. World Trade Organization, ‘Dispute Settlement Body, Minutes of Meeting Held on
23 October 2017, WT/DSB/M/403’.
6 The WTO members that filed the requests for consultations are: China, India, the European Union, Canada, Mexico,
Norway, the Russian Federation, and Switzerland.
7 The representatives of the United States in their responses to the consultations requests argued the following: “The
President determined that tariffs were necessary to adjust the imports of steel and aluminum articles that threaten to
impair the national security of the United States. Issues of national security are political matters not susceptible to
review or capable of resolution by WTO dispute settlement. Every Member of the WTO retains the authority to
determine for itself those matters that it considers necessary to the protection of its essential security interests, as is
2
The panels discussed the security exception on a number of occasions,8 yet the WTO
Members deliberately refrained from interpreting the ambiguous and politically-tainted security
clause9. One might say for a good reason: the metaphor of opening a Pandora’s Box illustrates the
prevailing attitude towards the adjudication of the security clause. Some scholars use the “Catch
22” analogy in this respect.10 The political nature of the clause reinforced by the future implications
of its interpretation - panel and AB reports establish a de facto precedent11, are to blame.
Unfortunately, the WTO’s crown jewel is facing a severe crisis, which is instigated by the
allegations of the tribunals’ judicial activism.12 Against this backdrop, interpretation of the security
clause might be particularly burdensome.
To proceed with the interpretative questions, the preliminary inquiry into whether the WTO
tribunals can adjudicate the security exception is needed. The recent dispute between Ukraine and
the Russian Federation, as well as the previous discussions of the issue, demonstrates the lack of
unanimity between the WTO Members in this regard. For the reason that the ongoing dispute is the
first incident where the disputing parties can submit their arguments for the panel’s consideration,
these arguments are of profound importance. Unfortunately, the written submissions of the parties
are not available for the public; however, a number of third-party submissions are available.
reflected in the text of Article XXI of the GATT 1994.” ‘United States - Certain Measures on Steel and Aluminium
Products (DS544), Communication from the United States, WT/DS544/2, 17 April 2018’.
8 The article presents a good summary of the disputes, in which the security exception was discussed. Ji Yeong Yoo and
Dukgeun Ahn, ‘Security Exceptions in the WTO System: Bridge or Bottle-Neck for Trade and Security?’ (2016) 19 Journal
of International Economic Law 417.
9 ibid.
10 Neuwirth and Svetlicinii (n 2).
11 Appellate Body Report, United States Final Anti-Dumping Measures on Stainless Steel from Mexico,
WT/DS344/AB/R, adopted 20 May 2008, DSR 2008:II, p 513 paras. 158-161.
12 The seven-member Appellate Body of the World Trade Organization is facing a serious crisis. The crisis was provoked
by the decision of the United States government to block the reappointment of South Korean AB member Seung Wha
Chang for a second term. The decision was announced in May 2016 and the representatives of the United States
accused the AB member “of making “wrong” decisions, as well as decisions that went beyond what was needed to
settle an individual dispute based on the parties’ specific arguments.” For more details, please, see Manfred Elsig, Mark
Pollack and and Gregory Shaffer, ‘The U.S. Is Causing a Major Controversy in the World Trade Organization. Here’s
What’s Happening. Washington Post (6 June 2016) <https://www.washingtonpost.com/news/monkey-
cage/wp/2016/06/06/the-u-s-is-trying-to-block-the-reappointment-of-a-wto-judge-here-are-3-things-to-know/>
accessed 18 November 2018; The position of the United States has not changed since then and in September 2018 the
United States blocked the reappointment of the judge from Mauritius. For more details, please, see Tom Miles, ‘U.S.
Blocks WTO Judge Reappointment as Dispute Settlement Crisis Looms’ Reuters (27 August 2018)
<https://www.reuters.com/article/us-usa-trade-wto-idUSKCN1LC19O> accessed 18 November 2018.
3
Before delving into the discussion of jurisdiction over the security exception and its
justiciability, we clarify the terminology. An analysis of the parties’ submissions demonstrates that
the concepts jurisdiction and justiciability are used. Despite their supposed similarity, they are not
identical. The term jurisdiction denotes power and competence to adjudicate. In other words,
jurisdiction to adjudicate ‘addresses the question of whether the court or tribunal seized of a case
can entertain that case and render a decision that is binding on the parties.13 The justiciability can
be defined as follows: “An issue is considered to be justiciable in a particular forum if it is capable of
being decided in that legal forum and it is considered appropriate to do so.14
Yet, to draw the distinction between the two concepts, - jurisdiction and justiciability, is not
that simple.15 Any detailed discussion of the matter goes far beyond the scope of this article.
Therefore we are of the view that the clarification provided by the United States suffices for the
purposes of this article. In this regard, the United States submitted the following: ‘we might define
jurisdiction in this context as the extent of power of the Panel under the DSU to make legal
decisions in this dispute, and justiciability as whether an issue is subject to findings by the Panel
under the DSU.’16 This proposition must be qualified in several ways. In this article we do not
discuss the standard of review exercised by the WTO adjudicators when the security exception is
invoked; neither do we address the issue of the burden of proof. In the following summary, we use
the terms as the relevant party used them.
We start with a brief summary of the arguments, expressed by the WTO Members. With this
factual context sketched, we delve into the discussion if the WTO tribunals are authorized to
exercise jurisdiction over the security exception. Subsequently, the argument that the security
exception clause is non-justiciable is properly dispelled.
13 Shabtai Rosenne, ‘International Courts and Tribunals, Jurisdiction and Admissibility of Inter-State Applications’, Max
Planck Encyclopedia of Public International Law [MPEPIL] (2006)
<http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e56> accessed 21 November
2018.
14 Dominic McGoldrick, ‘The Boundaries of Justiciability’ (2010) 59 International and Comparative Law Quarterly 981,
983.
15 ibid.
16 ‘Russia Measures Concerning Traffic in Transit (DS512), Third-Party Oral Statement of the United States of America’
1–2.
4
Arguments of the parties in Russia - Measures Concerning Traffic in Transit dispute
(DS512)
A. Arguments of the Russian Federation
The WTO tribunals have no jurisdiction over the security exception
As it has been mentioned earlier, the written submissions of the Russian Federation are not publicly
available, yet some of the arguments can be derived from the European Union submissions.17
Firstly, the Russian Federation claims that the security exception is an entirely self-judging clause
and the panel lacks jurisdiction to adjudicate it. Secondly, the Russian Federation argues that it
does not bear the burden of proof under the security clause by virtue of Article XXI(a)18, which
effectively exempts a defendant from this duty.
B. Arguments of the United States
The WTO tribunals have jurisdiction, yet the security exception is non-justiciable
The United States argues that the security exception is a non-justiciable clause. According to the US
position, the text and context, as well as the negotiating history and the previous state practice,
substantiate this conclusion.19 In its submissions the United States clarifies the difference between
the terms jurisdiction and justiciability: while the former relates to the panel’s power to make legal
decisions, the latter ‘relates to the nature of the inquiry that an adjudicator could make over a
matter put before it.20 In other words, the security exception is a political escape clause, and
neither panels nor the Appellate Body (AB) can adjudicate it or make recommendations to the
dispute settlement body, as required under Article 19 of the DSU.21
17 ‘Russia - Measures Concerning Traffic in Transit (DS512), European Union, Third Party Written Submission’; ‘Russia -
Measures Concerning Traffic in Transit (DS512), Third Party Oral Statement by the European Union’.
18 Article XXI(a) 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”. ‘GATT 1994:
General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade
Organization, Annex 1A, 1867 U.N.T.S. 187, 33 I.L.M. 1153 (1994)’.
19 ‘Russia Measures Concerning Traffic in Transit (DS512), Third-Party Oral Statement of the United States of America’
(n 17); ‘Russia Measures Concerning Traffic in Transit (DS512), Third Party Executive Summary of the United States’;
‘Russia Measures Concerning Traffic in Transit (DS512), Responses of the United States of America to Questions from
the Panel and Russia to Third Parties’.
20 ‘Russia Measures Concerning Traffic in Transit (DS512), Responses of the United States of America to Questions
from the Panel and Russia to Third Parties’ (n 20).
21 Article 19 of the DSU, in the relevant part, reads as follows: “Where a panel or the Appellate Body concludes that a
measure is inconsistent with a covered agreement, it shall recommend that the Member concerned bring the measure
into conformity with that agreement. In addition to its recommendations, the panel or Appellate Body may suggest
5
Further discussion of this argument is closely intertwined with the legal claim of an entirely
self-judging nature of the security exception. In advancing this claim, the United States relies on the
text, context and supplementary means of interpretation.
At the outset, it is argued that the ordinary meaning of the text ‘it considers’ entitles a WTO
Member to make its own determinations on the necessity of any measure taken for essential
security interests.22 The United States presents a number of contextual arguments to buttress this
conclusion. The bulk of these arguments is the comparison between the language ‘which it
considersin Article XXI(b) with the other paragraphs of Article XXI23, with the general exceptions of
Article XX24, with the other provisions of the WTO agreements25.
According to the United States, the supplementary means of treaty interpretation, such as
the negotiating history, consideration of Article XXI by the GATT 1947 panels and the statements of
the contracting parties to the GATT 1947, prove an entirely self-judging nature of the clause.26
C. Arguments of Australia
The WTO tribunals have jurisdiction and the security exception is justiciable, yet the scope of a
review shall be narrowly-defined
Discussing the panel’s jurisdiction, Australia relies upon the panel’s terms of reference27 and Article
7.2 of the DSU28 to argue that the panel has jurisdiction to examine all the legal claims advanced by
ways in which the Member concerned could implement the recommendations.” ‘DSU, Dispute Settlement Rules:
Understanding on Rules and Procedures Governing the Settlement of Disputes, Marrakesh Agreement Establishing the
World Trade Organization, Annex 2, 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994)’.
22 ‘Russia Measures Concerning Traffic in Transit (DS512), Third-Party Oral Statement of the United States of America’
(n 17) 4.
23 Contrary to Article XXI(c), Articles XXI(a) and XXI(b) stipulate the language “which it considers”; therefore these
exceptions are self-judging. ibid 58.
24 Article XX stipulates the following exceptions: “(a) necessary to protect public morals; (b) necessary to protect
human, animal or plant life or health; (d) necessary to secure compliance with laws or regulations.” Contrary to the
exceptions in Article XX , Article XXI uses the language “which it considers necessary” and does not prescribe the
chapeau test; therefore, members have the discretion to determine measures’ necessity and apply them in the way
they consider appropriate. ibid.
25 The United States presented examples of the instances when the wording “it considers” is used in other provisions of
the WTO agreements. In the US view, such wording authorizes the subjects to whom it is addressed to undertake any
measures which they consider necessary. Furthermore, contrary to the other provisions, where the language “it
considers” is followed by the text that expressly allows a review of the member’s determination, the security exception
lacks similar language. This circumstance certifies that the security exception is non-justiciable. ibid.
26 ibid 813.
27 The panel was established with the standard terms of reference: “The Panel’s terms of reference are the following:
To examine, in the light of the relevant provisions of the covered agreements cited by the parties to the dispute, the
matter referred to the DSB by Ukraine in document WT/DS512/3 and to make such findings as will assist the DSB in
6
the parties and make necessary findings.29 Australia considers that if the panel declines its
jurisdiction, it will violate Ukraine's rights guaranteed under Articles 3.2 and 3.3 of the DSU30 as well
as it will violate its obligations under Articles 7.231, 1132 and 19.233 of the DSU.34
In the meantime, Australia emphasizes the significance of national security.35
Notwithstanding the panels’ right to adjudicate the security exception, panels are restricted in their
review.36 In Australia’s view, the ambit of the review granted under the security exception is limited
to a factual review: (i) whether the Member considers the action necessary for the protection of its
essential security interests; and (ii) whether that action is taken for the protection of its essential
security interests.37
D. Arguments of the European Union
The WTO tribunals have jurisdiction and the security exception is fully justiciable
The European Union argues that the WTO tribunals have jurisdiction to rule over the security
matters and denies any restrictions on the exception’s justiciability.38
making the recommendations or in giving the rulings provided for in those agreements.” World Trade Organization,
‘Russia - Measures Concerning Traffic in Transit (DS512), Constitution of the Panel Established at the Request of
Ukraine, Note by the Secretariat’.
28 Article 7.2 of the DSU reads as follows: “Panels shall address the relevant provisions in any covered agreement or
agreements cited by the parties to the dispute.”
29 ‘Russia - Measures Concerning Traffic in Transit (DS512), Third Party Written Submission of Australia’ 45.
30 Articles 3.2 and 3.3 of the DSU reads as follows: “2. The dispute settlement system of the WTO is a central element in
providing security and predictability to the multilateral trading system. The Members recognize that it serves to
preserve the rights and obligations of Members under the covered agreements and to clarify the existing provisions of
those agreements in accordance with customary rules of interpretation of public international law. Recommendations
and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.3. The
prompt settlement of situations in which a Member considers that any benefits accruing to it directly or indirectly
under the covered agreements are being impaired by measures taken by another Member is essential to the effective
functioning of the WTO and the maintenance of a proper balance between the rights and obligations of Members.
31 see footnote 27
32 Article 11 reads as follows: “The function of panels is to assist the DSB in discharging its responsibilities under this
Understanding and the covered agreements. Accordingly, a panel should make an objective assessment of the matter
before it, including an objective assessment of the facts of the case and the applicability of and conformity with the
relevant covered agreements, and make such other findings as will assist the DSB in making the recommendations or in
giving the rulings provided for in the covered agreements. Panels should consult regularly with the parties to the
dispute and give them adequate opportunity to develop a mutually satisfactory solution.
33 Article 19.2 reads as follows: “In accordance with paragraph 2 of Article 3, in their findings and recommendations, the
panel and Appellate Body cannot add to or diminish the rights and obligations provided in the covered agreements.
34 ‘Russia - Measures Concerning Traffic in Transit (DS512), Third Party Written Submission of Australia’ (n 30) 56.
35 ibid 7.
36 ‘Russia - Measures Concerning Traffic in Transit (DS512), Third Party Oral Statement of Australia’ 4.
37 ibid 3.
38 ‘Russia - Measures Concerning Traffic in Transit (DS512), European Union, Third Party Written Submission’ (n 18).
7
The essence of the European Union’s arguments is that a non-justiciable security exception
runs counter to the legal rules of the DSU. More precisely, dispute settlement rules of the GATT
1994 and the DSU do not prescribe any exceptions for the disputes, in which the security exception
is invoked.39 Furthermore, the non-justiciable security exception disregards the panel’s terms of
reference and the requirement of Article 7.2 of the DSU.40
The non-justiciable security exception deprives panels of their duty to make an objective
assessment of the matter before it’ as required under Article 11 of the DSU41 and undermines the
fundamental objectives of the dispute settlement system enshrined in Article 3.2 of the DSU42. The
European Union concludes that the non-justiciable security exception has far-reaching implications:
a WTO Member, rather than the WTO dispute settlement bodies, would be deciding unilaterally
the outcome of a dispute.’43
Our analysis
A. The WTO tribunals’ jurisdiction over the security exception
I. General observations on the WTO tribunals’ jurisdiction
The DSU does not stipulate rules on when panels or the AB shall exercise or decline jurisdiction.
Despite this silence, the WTO jurisprudence provides a number of rules on ascertaining the
tribunal’s jurisdiction over legal claims.
The rule of thumb is that a panel’s terms of reference establish jurisdiction for a panel44 and
therefore panels are deprived of the right to adjudicate claims that had not been included in a
request to establish a panel45. Moreover, panels do not have jurisdiction to determine the rights
39 ibid 3–4.
40 ibid 4.
41 ibid.
42 ibid 5.
43 ibid.
44 Appellate Body Report, Brazil Measures Affecting Desiccated Coconut, WT/DS22/AB/R, adopted 20 March 1997, DSR
1997:I, p 167 p. 21.
45 Appellate Body Report, India Patent Protection for Pharmaceutical and Agricultural Chemical Products,
WT/DS50/AB/R, adopted 16 January 1998, DSR 1998:I, p 9 para. 92.
8
and obligations of the partiesunder the agreement that is not included in the list of the covered
agreements.46
The AB pronounced in US - 1916 Act that the WTO tribunals are entitled to determine their
own jurisdiction.47 In Mexico - Corn Syrup (Article 21.5 - US) the AB endorsed the view that the
panel must address the issue of its jurisdiction. It was noted:
We believe that a panel comes under a duty to address issues in at least two instances.
First, as a matter of due process, and the proper exercise of the judicial function, panels
are required to address issues that are put before them by the parties to a dispute.
Second, panels have to address and dispose of certain issues of a fundamental nature,
even if the parties to the dispute remain silent on those issues. In this regard, we have
previously observed that '[t]he vesting of jurisdiction in a panel is a fundamental
prerequisite for lawful panel proceedings.' For this reason, panels cannot simply ignore
issues which go to the root of their jurisdiction that is, to their authority to deal with
and dispose of matters. Rather, panels must deal with such issues if necessary, on their
own motion in order to satisfy themselves that they have authority to proceed.48
The jurisdiction of the WTO dispute settlement system is compulsory, and neither a panel nor the
AB has ever declined to exercise jurisdiction.49 In this regard, Isabelle Van Damme accurately
concluded:If they [WTO Members] want a third party to settle their dispute, recourse to dispute
settlement under the DSU is the only option.’50
We argue that the panel has jurisdiction over the security exception. A number of arguments
support this conclusion. Firstly, the text of the security exception does not explicitly deny the
jurisdiction of the panels or the AB. Secondly, the title of the provision ‘Security Exceptions’ implies
that it applies as an affirmative defense. The exception is placed between the general exceptions
and the dispute settlement rules, and such placement confirms that the security clause is an
exemption from the substantive obligations, not from the dispute settlement rules. Furthermore,
46 Panel Report, European Communities and Certain Member States Measures Affecting Trade in Large Civil Aircraft,
WT/DS316/R, adopted 1 June 2011, as modified by Appellate Body Report WT/DS316/AB/R, DSR 2011:II, p 685 para.
7.89.
47 "We note that it is a widely accepted rule that an international tribunal is entitled to consider the issue of its own
jurisdiction on its own initiative, and to satisfy itself that it has jurisdiction in any case that comes before it.” Appellate
Body Report, United States Anti-Dumping Act of 1916, WT/DS136/AB/R, WT/DS162/AB/R, adopted 26 September
2000, DSR 2000:X, p 4793 para. 54.
48 Appellate Body Report, Mexico Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United
States Recourse to Article 215 of the DSU by the United States, WT/DS132/AB/RW, adopted 21 November 2001, DSR
2001:XIII, p 6675 para. 36 (citing Appellate Body Report, United States – Anti-Dumping Act of 1916, para. 54).
49 Isabelle Van Damme, Treaty Interpretation by the WTO Appellate Body (Oxford University Press 2009) 175.
50 ibid 9.
9
the DSU does not stipulate any exceptions; it only refers to the special or additional rules that might
apply and the security exception is not mentioned there.51 Additionally, Article 6 of the DSU
guarantees to every WTO Member a right to the establishment of a panel, which might be
overruled only by the consensus and a WTO Member cannot be deprived of this right on any other
ground.52 Finally, the interpretation that disregards the Members entitlement to preserving its
rights and obligations under the WTO agreements, which is the ultimate goal of the dispute
settlement mechanism, runs counter to Article 3.2 of the DSU.53
II. The practice of the International Court of Justice in ascertaining jurisdiction over the security
clauses
The WTO law does not function in a clinical isolation from public international law54 and therefore
adjudicators, when faced with intricate interpretative questions, frequently seek guidance from
other international courts and tribunals55. Thus it is worthwhile to analyze the jurisprudence of the
International Court of Justice (ICJ) regarding the court’s jurisdiction over the security exemptions.
In a number of disputes, the ICJ had to decide whether it had jurisdiction to adjudicate the
security exceptions, the wordings of which are similar to the one prescribed by the GATT 1994. The
dispute between Nicaragua and the United States was the first dispute in which the court’s
jurisdiction over the security clause was questioned.56 The United States challenged the court’s
51 ‘DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes,
Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994)’ (n
22) Appendix 2.
52 Article 6 of the DSU reads as follows: “If the complaining party so requests, a panel shall be established at the latest
at the DSB meeting following that at which the request first appears as an item on the DSB's agenda, unless at that
meeting the DSB decides by consensus not to establish a panel.”
53 Article 3.2, in the relevant part, reads as follows: “The dispute settlement system of the WTO is a central element in
providing security and predictability to the multilateral trading system. The Members recognise that it serves to
preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of
those agreements in accordance with customary rules of interpretation of public international law.”
54 Appellate Body Report, United States Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R,
adopted 20 May 1996, DSR 1996:I, p 3 p. 17.
55 ‘We would agree with the European Communities that it may be appropriate for panels to look to the practice of
international tribunals for inspiration, particularly in situations where the WTO agreements, GATT/WTO jurisprudence
or practice provide no useful guidance.’ Panel Reports, European Communities Measures Affecting the Approval and
Marketing of Biotech Products, WT/DS291/R, Add1 to Add9 and Corr1 / WT/DS292/R, Add1 to Add9 and Corr1 /
WT/DS293/R, Add1 to Add9 and Corr1, adopted 21 November 2006, DSR 2006:III, p 847 para. 7.1663.
56 In 1984 Nicaragua filed an application instituting proceedings against the United States on the ground that the United
States was responsible for illegal military and paramilitary activities in and against Nicaragua. The United States
10
jurisdiction by relying upon the following treaty text: ‘the present Treaty shall not preclude the
application of measures: (d) … necessary to protect its [Member’s] essential security interests’.57
The court pronounced that this exception is an affirmative defense, which does not deprive the
court of its jurisdiction.58 In the same paragraph, the ICJ reinforced its conclusion by comparing the
provision in question with the GATT 1947 security exception.59 Although the court pointed out the
self-judging language "it considers" in the GATT 1947 security exception, such manoeuvre might be
interpreted as a mere reflection of the ambit of the court’s power to interpret such clause and not
as a restriction on the court’s ability to entertain the dispute.
In Oil Platforms the ICJ was confronted with the preliminary objections to entertain the
dispute between the Islamic Republic of Iran and the United States.60 The court had to interpret
whether the treaty text, which reads: ‘The present Treaty shall not preclude the application of
measures: … necessary to protect its [a High Contracting Party’s] essential security interestsshall
be interpreted as excluding certain measures from the scope of the treaty and as a result,as
excluding the jurisdiction of the Court to test the lawfulness of such measures’61. After citing its
previous jurisprudence, the court concluded that the provision does not restrict its jurisdiction in
challenged the jurisdiction of the court as well as the admissibility of the claims. Military and Paramilitary Activities in
and against Nicaragua (Nicaragua v United States of America) Merits, Judgment ICJ Reports 1986, p 14.
57 ibid.
58 ‘Article XXI defines the instances in which the Treaty itself provides for exceptions to the generality of its other
provisions, but it by no means removes the interpretation and application of that article from the jurisdiction of the
Court as contemplated in Article XXIV.’ ibid 116.
59 ‘That the Court has jurisdiction to determine whether measures taken by one of the Parties fall within such an
exception, is also clear a contrario from the fact that the text of Article XXI of the Treaty does not employ the wording
which was already to be found in Article XXI of the General Agreement on Tariffs and Trade. This provision of GATT,
contemplating exceptions to the normal implementation of the General Agreement, stipulates that the Agreement is
not to be construed to prevent any contracting party from taking any action which it “considers necessary for the
protection of its essential security interests”, in such fields as nuclear fission, arms, etc. The 1956 Treaty, on the
contrary, speaks simply of “necessary” measures, not of those considered by a party to be such.’ ibid.
60 On 2 November 1992, the Islamic Republic of Iran filed an application instituting proceedings against the United
States of America with respect to the destruction of Iranian oil platforms. The Islamic Republic founded the jurisdiction
of the Court upon a provision of the Treaty of Amity, Economic Relations and Consular Rights between Iran and the
United States, signed at Tehran on 15 August 1955. In its Application, Iran alleged that the destruction caused by
several warships of the United States Navy, in October 1987 and April 1988, to three offshore oil production complexes,
owned and operated for commercial purposes by the National Iranian Oil Company, constituted a fundamental breach
of various provisions of the Treaty of Amity and of international law. Oil Platforms (Islamic Republic of Iran v United
States of America), Preliminary Objection, Judgment, I C J Reports 1996, p 803.
61 ibid 811.
11
the present case, but is confined to affording the Parties a possible defense on the merits to be
used should the occasion arise.62
In the recent dispute between the Islamic Republic of Iran and the United States over the
unilateral economic sanctions imposed by the US, the parties could not agree if the security clause
excludes the jurisdiction of the ICJ.63 The provision in question, in the relevant part, reads as
follows: ‘The present Treaty shall not preclude the application of measures: … necessary to protect
its [a High Contracting Party’s] essential security interests.64 In essence, Iranian arguments were
comprised of the two main points: the court’s pronouncements in Oil Platforms, where the same
provision was interpreted as not depriving the court of its jurisdiction, and the argument that the
security exception does not relieve the state from the obligation of good faith.65 The United States
submitted that if the disputed measures fall under the security exception clause, such measures
automatically fall outside the material scope of the treaty, and thus the court’s jurisdiction is
excluded.66 The ICJ referred to its previous jurisprudence, where the court found that the security
exception ‘did not restrict its jurisdiction’ and granted prima facie jurisdiction.67
The practice of the other international tribunals in considering national security measures
suggests that the matter can be adjudicated. As Dapo Akande and Sope Williams pointed out: ‘The
practice of the European Court of Justice (ECJ), the European Court of Human Rights (ECHR), and
the International Court of Justice in regard to cases raising national security claims shows that
whilst in practice those tribunals afford a wide margin of discretion to States in determining
whether or not particular interests are national security interests, in principle those courts have
held themselves competent to determine those interests.’68
62 ibid.
63 Alleged violations of the 1955 Treaty of Amity, Economic Relations, and Consular Rights (Islamic Republic of Iran v
United States of America), Request for the indication of provisional measures, Order of 3 October 2018 7–14.
64 Alleged violations of the 1955 Treaty of Amity, Economic Relations, and Consular Rights (Islamic Republic of Iran v.
United States of America), Request for the indication of provisional measures, Order of 3 October 2018 (n 64).
65 ibid 910.
66 ibid 1011.
67 ibid 1112.
68 Dapo Akande and Sope Williams, ‘International Adjudication on National Security Issues: What Role for the WTO’
(2002) 43 Virginia Journal of International Law 365, 382.
12
B. Justiciability of the security exception
The security exception’s justiciability, - the question if it is subject to findings by the panel, is a self-
standing issue. Although justiciability of the clause is closely related to the discussion of its self-
judging nature, we examine these legal claims independently. For the subsequent analysis, the term
justiciability is used in the meaning of a tribunal’s competence to make determinations regarding
the security exception.
The DSU does not define the term justiciability, and the AB referenced it only once by
pronouncing: ‘the justiciability of the commitments set forth in China's Accession Protocol has been
well accepted without recourse to China's interpretation.’69
The United States defines justiciability as the concept that relates to the nature of the inquiry
that an adjudicator could make over a matter put before it’ and argues that panels are deprived of
the right to conduct an inquiry into the security exception.70 The distinction between justiciable and
non-justiciable legal claims is rooted in the US constitutional law and is more known as the ‘political
question’ doctrine that dates back to 1803.71 The essence of thepolitical question’ doctrine is that
courts cannot adjudicate some claims due to their political nature and therefore courts must
dismiss such claims for lack of jurisdiction without reaching the merits. The arguments advanced by
the United States reflect the desire to transpose the ‘political question’ doctrine, as well as its
implications, into the reality of international trade law.
These statements echo the opinion the United States held in a number of disputes over the
national security measures. The United States took a similar position in the case initiated by
69 Appellate Body Reports, China Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum,
WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R, adopted 29 August 2014, DSR 2014:III, p 805 para. 2.90.
70 ‘Russia Measures Concerning Traffic in Transit (DS512), Third-Party Oral Statement of the United States of America’
(n 17); ‘Russia Measures Concerning Traffic in Transit (DS512), Third Party Executive Summary of the United States’ (n
20); ‘Russia Measures Concerning Traffic in Transit (DS512), Responses of the United States of America to Questions
from the Panel and Russia to Third Parties’ (n 20).
71 Marbury v. Madison, a U.S. Supreme Court case, was the first case where the doctrine was acknowledged. The six
essential characteristics of the issue that falls under the “political question” were outlined in another U.S. Supreme
Court case, - Baker v. Carr (1962). Despite the recognition in the U.S. Supreme Court jurisprudence, the political
question doctrine has been criticised by some legal scholars. For example, Louis Henkin in his article ‘Is There a
“Political Question” Doctrine?’ reached the following conclusion: ‘The “political question” doctrine, I conclude, is an
unnecessary, deceptive packaging of several established doctrines that has misled lawyers and courts to find in it things
that were never put there and make it far more than the sum of its parts.’ Louis Henkin, ‘Is There a “Political Question”
Doctrine?’ (1976) 85 The Yale Law Journal 597, 622.
13
Nicaragua before the ICJ.72 Professor Abram Chayes, who acted as a counsel for the government of
Nicaragua, demonstrated how the political question’ doctrine lay at the core of the US argument in
the jurisdictional phase.73 In the WTO context, the United States threatened to boycott the
proceedings in the dispute over the Cuban sanctions on the same grounds.74
The possibility for international tribunals to rely upon the ‘political question’ doctrine was
amply discussed in relation to the notorious Lockerbie case, in which the ICJ had to decide whether
it had jurisdiction over the political body of the United Nations, - the Security Council.75 In the
context of that dispute, many scholars suggested that there is a variety of reasons to argue in favor
of ‘political question’ doctrine adopted by the international tribunals.76 Conceivably, the adoption
of such doctrine might entail somewhat paradoxical outcome as it was accurately pointed out by
Marcella David: such adoptionsimultaneously encourages the Court to extend its authority and to
adopt a rule setting future limits on its power.’77
We argue that any attempt to apply the political question doctrine in international law
contradicts the fundamental principles of international law. The emergence of the political
questiondoctrine was possible only in a national legal system, as one of the means to restrain
72 Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America). Merits,
Judgment. I.C.J. Reports 1986, p. 14. (n 57).
73 Abram Chayes, ‘Nicaragua, the United States, and the World Court’ (1985) 85 Columbia Law Review 1445.
74 C Todd Piczak, ‘The Helms-Burton Act: U.S. Foreign Policy toward Cuba, the National Security Exception to the GATT
and the Political Question Doctrine’ (1999) 61 University of Pittsburgh Law Review 287.
75 On 3 March 1992 the Libyan Arab Jamahiriya filed in the Registry of the Court two separate Applications instituting
proceedings against the Government of the United States of America and the Government of the United Kingdom, in
respect of a dispute over the interpretation and application of the Convention for the Suppression of Unlawful Acts
against the Safety of Civil Aviation signed in Montreal on 23 September 1971, a dispute arising from acts resulting in the
aerial incident that occurred over Lockerbie, Scotland, on 21 December 1988. Each of the respondent States filed
preliminary objections. On 27 February 1998, the Court delivered two Judgments on the preliminary objections raised
by the United Kingdom and the United States of America. In these judgements, the Court dismissed the objection to
admissibility based on Security Council resolutions 748 (1992) and 883 (1993). By two letters of 9 September 2003, the
Governments of Libya and the United Kingdom on the one hand, and of Libya and the United States on the other,
jointly notified the Court that they had “agreed to discontinue with prejudice the proceedings”. Questions of
Interpretation and Application of the 1971 Montreal Convention arising from the Aerial Incident at Lockerbie (Libyan
Arab Jamahiriya v United Kingdom), Preliminary Objections, Judgment, I CJ Reports 1998, p 9.
76 Dapo Akande, ‘The International Court of Justice and the Security Council: Is There Room for Judicial Control of
Decisions of the Political Organs of the United Nations?’ (1997) 46 International and Comparative Law Quarterly 309;
Marcella David, ‘Passport to Justice: Internationalizing the Political Question Doctrine for Application in the World
Court’ (1999) 40 Harvard International Law Journal 81.
77 David (n 77) 148.
14
courts from intervening in the domains of the other branches of government.78 Contrary to national
legal systems, separation of powers is not ingrained in international law, and international law is
based predominantly on the contractual relations between states. Therefore, it remains unclear
whether it is practical and prudent to transpose this doctrine into the reality of international law.
It can be argued that from an institutional perspective the justiciability might be reflected in
the separation of powers between different bodies of an international organization. Seen this way,
the matter might appear non-justiciable only if it falls squarely within the competence of another
body. To put it differently, if the General Council of the WTO would have been entitled to decide on
the invocation of the security exception, the WTO adjudicators ought to acknowledge the matter as
non-justiciable. It suffices to say that it is not the case.
In our view, the security exception clause is an affirmative defense, and it is justiciable due to
the following: interpretation of the security exception according to the general rule of
interpretation confirms that some elements of the clause can be adjudicated. This conclusion draws
support from the supplementary means of interpretation as well. Furthermore, the legalization of
the WTO dispute settlement and the impact of such institutional change on the security exception's
interpretation ought to be accounted for.
I. The general rule of interpretation and justiciability of the security exception
The panels are entitled to clarify the existing provisions of the covered agreements in accordance
with customary rules of interpretation of public international law.79 Customary rules of
interpretation are codified in Articles 31-32 of the Vienna Convention on the Law of Treaties
(VCLT).80 The general rule of interpretation, which is of paramount importance for any
interpretative exercise, reads as follows: ‘A treaty shall be interpreted in good faith in accordance
78 “Doctrines of justiciability commonly appear as attempts to determine the limits of judicial or quasi-judicial functions
and to distinguish them from ‘political’ functions and processes. As such resort to justiciability can expressly or
implicitly reveal the decision-makers’ perception of the nature and limits of their role and function.” McGoldrick (n 15)
985.
79 ‘DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes,
Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994)’ (n
22) Article 3.2 .
80 ‘Vienna Convention on the Law of Treaties, 1155 U.N.T.S. 331, 8 I.L.M. 679, Entered into Force Jan. 27, 1980.’
15
with the ordinary meaning to be given to the terms of the treaty in their context and in the light of
its object and purpose’81.
Panels and the AB elaborated further on the application of the general rule of interpretation.
The panel in US - Section 301 Trade Act affirmed that ‘text, context and object and purpose as well
as good faith - are to be viewed as one holistic rule of interpretation rather than a sequence of
separate tests to be applied in a hierarchical order’82. Besides this, the AB followed the ICJ83 and
declared its preference for the textual interpretation by stating: ‘interpretation must be based
above all upon the text of the treaty’84.
Despite the apparent preference for the textual interpretation, the WTO adjudicators rely on
the various manifestations of the contextual reasoning as well. The list of contextual elements
includes ‘immediately surrounding words, other sentences of the same paragraph of a provision,
other paragraphs in a provision, the title of a provision, immediately adjacent articles, other articles
in the same part of the treaty, or other articles in other parts of the treaty’.85
Additionally, the object and purpose of a provision, as well as the object and purpose of a
treaty itself, can be taken into consideration.86 The AB does not disentangle the text and context
from the object and purpose. The AB put it as follows: ‘It is in the words constituting that provision,
read in their context, that the object and purpose of the states parties to the treaty must first be
sought. Where the meaning imparted by the text itself is equivocal or inconclusive, or where
confirmation of the correctness of the reading of the text itself is desired, light from the object and
purpose of the treaty as a whole may usefully be sought.’87
The text of the security exception reads as follows:
Nothing in this Agreement shall be construed
81 ibid Article 31(1).
82 Panel Report, United States Sections 301-310 of the Trade Act of 1974, WT/DS152/R, adopted 27 January 2000, DSR
2000:II, p 815 301 para 7.22.
83 Territorial Dispute (Libyan Arab Jamahiriya/Chad), Judgment, ICJ Reports 1994, p 6; Maritime Delimitation and
Territorial Questions between Qatar and Bahrain, Jurisdiction and Admissibility, Judgment, IC J Reports 1995, p 6.
84 Appellate Body Report, Japan Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R,
adopted 1 November 1996, DSR 1996:I, p 97 page 11.
85 Graham Cook, A Digest of WTO Jurisprudence on Public International Law Concepts and Principles (First published,
University Press 2015) 15.4 Context Article 31(1).
86 ibid 15.6 Object and Purpose.
87 Appellate Body Report, United States Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R,
adopted 6 November 1998, DSR 1998:VII, p 2755 para. 114.
16
(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.
On its face, the text of the security exception does not deny tribunal’s competence to
adjudicate it. The security clause is comprised of a number of exceptions: paragraphs (a), (b), and
(c) enumerate them. If the common intention of the parties was to agree to a non-justiciable
security exception, there would be no need to draft such an elaborate text.
The context does not support the argument that panels are deprived of their competence to
review an invocation of the security clause. For example, the title of the provision and its placement
between the general exceptions and the dispute settlement rules imply that the exception applies
as an affirmative defense.
The drafters of the initial text intended not to allow the security exception to justify ‘anything
under the sun’.88 Therefore, the object and purpose of the security exception can be significantly
undermined if its invocation is not reviewed.
Additionally, the object and purpose of the dispute settlement system, which is ‘a central
element in providing security and predictability to the multilateral trading system89, can be
threatened by an entirely non-justiciable security clause. The risk inherent in a non-justiciable
88 World Trade Organization, ‘WTO Analytical Index: Guide to WTO Law and Practice, Article XXI - Security Exceptions’
<https://www.wto.org/english/res_e/booksp_e/gatt_ai_e/art21_e.pdf> accessed 28 November 2018 p. 600.
89 ‘DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes,
Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994)’ (n
22) Article 3.2.
17
security exception can be illustrated as ‘the risk of creating, at least in theory, the power of the
losing party to block adverse Panel ruling’.90
II. Subsequent practice and the justiciability of the security exception
Article 31 (3) of the VCLT reads as follows: ‘There shall be taken into account, together with the
context: (a) Any subsequent agreement between the parties regarding the interpretation of the
treaty or the application of its provisions; (b) Any subsequent practice in the application of the
treaty which establishes the agreement of the parties regarding its interpretation; (c) Any relevant
rules of international law applicable in the relations between the parties.’ In the next few
paragraphs, we discuss the GATT 1947 and the WTO disputes involving the security exception and
the Decision Concerning Article XXI of the General Agreement adopted on 30 November 1982 and if
they support our argument on the justiciability.
The security exception of the GATT 1947 was relied upon in several pre-WTO disputes. The
dispute between Czechoslovakia and the United States was the first occasion when it was
invoked.91 The contracting parties did not reject jurisdiction to rule over the disputed issue,
although the original claim by Czechoslovakia was dismissed.92 After justifying its measures under
the security clause, the United States provided a comprehensive explanation of the measures at
issue, their operation and the security risks addressed by them.93 The deliberations demonstrate
that the security clause was considered as an affirmative defense to justify violations of the GATT
1947 provisions.
Legal scholars come to similar conclusions. Raj Bhala points out that the dispute was decided
under Article XXIII(2) of the GATT 1947 and concludes as follows: ‘the Contracting Parties appear to
have thought that mere invocation of Article XXI did not immunize a sanctioning member from an
90 Antonio F Perez, ‘WTO and U.N. Law: Institutional Comity in National Security’ (1998) 23 The Yale Journal of
International Law 301, 312.
91 Contracting Parties to the GATT 1947, ‘Twenty-Second Meeting, GATT/CP.3/SR.22, p. 9; II/28, 8 June 1949 (Request
of Czechoslovakia for Decision under Article XXIII)’.
92 At that time the WTO judicial process was at its rudimentary form, and therefore after a brief exchange of views, the
contracting parties agreed to reject the claim. ibid.
93 ibid.
18
Article XXIII action.’94 Schloemann and Ohlhoff infer that: ‘the Contracting Parties did not
altogether decline their (formal) Article XXIII jurisdiction over matters involving Article XXI.’95
Twelve years later Ghana imposed restrictive measures against Portugal and justified them
under the security exception.96 Ghana explicitly built its defense on the particular facts of the
case.97 On this occasion, justiciability of the security clause was not discussed.
In 1975 Sweden defended its import quota system on footwear as necessary for its national
security.98 Faced with strong disapproval and diplomatic pressure, the Swedish government
withdrew the quota system, and the measure was not adjudicated.99
The Falkland crisis in 1982 fueled the debate on the security interests and the international
trading system. It was in the context of this crisis that the European Community made its notorious
statement that ‘they had taken these measures [unilateral trade sanctions against Argentina] on
the basis of their inherent rights of which Article XXI of the General Agreement was a reflection.’100
The matter was not adjudicated, yet led to an adoption of the Decision Concerning Article XXI of the
General Agreement, which is discussed below.
The dispute between Nicaragua and the United States (1986) sheds some light on the
justiciability of the clause.101 The established panel acknowledged that it did not examine the
security exception because of its terms of reference, which explicitly prohibited such assessment,
and not due to the general non-justiciability.102 In this regard, Schloemann and Ohlhoff point out
that the explicit prohibition to adjudicate the security clause confirms the weakness of the
argument on non-justiciability of the clause.103
94 Raj Bhala, ‘National Security and International Trade Law: What the GATT Says, and What the United States Does’
(1998) 19 University of Pennsylvania Journal of International Economic Law 263, 278.
95 Hannes L Schloemann and Stefan Ohlhoff, ‘“Constitutionalization” and Dispute Settlement in the WTO: National
Security as an Issue of Competence’ (1999) 93 The American Journal of International Law 424, 432.
96 World Trade Organization, ‘WTO Analytical Index: Guide to WTO Law and Practice, Article XXI - Security Exceptions’ (n
89) p. 600.
97 Schloemann and Ohlhoff (n 96) 436.
98 World Trade Organization, ‘WTO Analytical Index: Guide to WTO Law and Practice, Article XXI - Security Exceptions’ (n
89) p. 603.
99 ibid p. 603.
100 ‘GATT Council, Minutes of Meeting Held on May 7, 1982, GATT Doc. C/M/157, June 22, 1982.’
101 United States - Trade measures affecting Nicaragua, Report by the Panel (unadopted), Doc L/6053, 13 October 1986.
102 ibid.
103 Schloemann and Ohlhoff (n 96) 435.
19
In the dispute between the European Communities and Yugoslavia in 1992 the panel’s terms
of reference did not exclude security justification from the panel’s consideration104, yet the dispute
was resolved on the other grounds105.
The three WTO disputes, in which the invocation of the security exception was discussed, are
the European Communitiesattempt to question the US sanctions against Cuba106 and Colombia's
and Honduras claims against Nicaragua for imposing sanctions after these countries concluded a
bilateral treaty on delimiting the maritime boundary107. In the first dispute, the panel was
established with the standard terms of reference prescribed by the DSU without any exceptions.108
In respect of Colombia's claims, it was agreed that the Chair of the Dispute Settlement Body would
consult with the parties in order to determine the panel’s terms of reference.109 All disputes were
resolved by the political means, without any recourse to the formal adjudication.
As illustrated above, the practice of the pre-WTO and the WTO panels ascertains that the
security clause was considered to be justiciable. Justiciability of the security exception is also
confirmed by the Decision Concerning Article XXI of the General Agreement adopted in 1982.110
The text of the decision, in the relevant part, states: ‘when action is taken under Article XXI, all
contracting parties affected by such action retain their full rights under the General Agreement. It
preserves the rights of the affected parties and allows them to request a review of the security
clause’s invocation. Despite the ambiguity of the text that leaves doubts as to its relevance111, the
text still may serve as an additional argument to support the justiciability of the security clause.
104 World Trade Organization, ‘WTO Analytical Index: Guide to WTO Law and Practice, Article XXI - Security Exceptions’
(n 89) p. 604.
105 The proceedings were suspended because of the uncertain legal status of the Federal Republic of Yugoslavia. ibid.
106 DS38: United States - The Cuban Liberty and Democratic Solidarity Act.
107 DS188: Nicaragua - Measures Affecting Imports from Honduras and Colombia; DS201: Nicaragua - Measures
Affecting Imports from Honduras and Colombia.
108 ‘United States - The Cuban Liberty and Democratic Solidarity Act, Constitution of the Panel Established at the
Request of the European Communities, Communication by the DSB Chairman, Doc. WT/DS38/3, 20 February 1997.’
109 ‘Dispute Settlement Body, Minutes of Meeting, Held on 18 May 2000, Doc. WT/DSB/M/80 of 26 June 2000.’ paras.
41-42.
110 ‘Decision Concerning Article XXI of the General Agreement, Nov. 30, 1982, GATT B.I.S.D. (29th Supp.) at 23 (1983).’
111 ‘It could be argued that this paragraph was intended to establish that the dispute settlement provisions of the GATT
were still applicable even when a matter of national security was involved. However, given that at the time, a
respondent party also had the “right” to block the establishment of a panel, this decision did not advance matters
much.’ Akande and Williams (n 69) 374375; Michael Hahn expressed similar views. Michael J Hahn, ‘Vital Interests and
the Law of GATT: An Analysis of GATT’s Security Exception’ (1991) 12 Michigan Journal of International Law 558.
20
III. The legalization of the dispute settlement and justiciability of the security exception
The WTO tribunals generally ascertain the common intention of the parties. In EC Computer
Equipment the AB disagreed with the panel’s interpretation of good faith as a requirement to
consider the contracting party’s ‘legitimate expectations’. Moreover, the AB stated: ‘The purpose of
treaty interpretation under Article 31 of the VCLT is to ascertain the common intentions of the
parties. These common intentions cannot be ascertained on the basis of the subjective and
unilaterally determined 'expectations' of one of the parties to a treaty.’112
During the Uruguay Round of negotiations, the dispute settlement rules were significantly
changed, and the dispute settlement process became more legalized and formalized.
Notwithstanding these drastic changes, the parties did not re-negotiate the security clause. Thus, a
treaty interpreter can presume that the common intention of the WTO Members was to
incorporate Article XXI in the GATT 1994 without any amendments, even though the dispute
settlement rules fundamentally changed.
The DSU does not prescribe any security exception, and the security clause of the GATT 1994
cannot amend the DSU rules. Schloemann and Ohlhoff warned against the opposite conclusion:
Such a direct jurisdictional defense would transform a primarily substantive security exception into
a procedural national security exception, and thus would empower Members to block dispute
settlement proceedings within the WTO. This result would directly contradict the purpose of
“strengthening the multilateral system” and the carefully established negative-consensus rule.’113
Conclusion
Considering current political discourse, which does not favor multilateralism,
pronouncements that restrict the Member’s right to define its national security priorities might be
considered immensely intrusive. Against this backdrop, the WTO tribunals might exercise
considerable caution when interpreting the security exception clause. Despite this, we argue that
the WTO adjudicators have jurisdiction over the security exception and the security exception
clause is justiciable.
112 Appellate Body Report, European Communities Customs Classification of Certain Computer Equipment,
WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R, adopted 22 June 1998, DSR 1998:V, p 1851 para. 84.
113 Schloemann and Ohlhoff (n 96) 439440.
21
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Article
Purpose This paper aims to further study the panel report in Russia – Traffic in Transit regarding the interpretation and application of 1994 general agreements on tariffs and trade (GATT) Article XXI(b). It analyses the threshold applied by the panel in applying Article XXI(b)(iii) and further discusses the potential problem that may arise in the future dispute. This study also investigates the notion of emergency and security interest and its development in international law. Design/methodology/approach This normative research uses a qualitative legal methodology. This study conducts desk analysis of primary legal materials and existing literature to assess the concept of security interest within the World Trade Organization (WTO) framework. Findings This paper finds that the panel in Russia – Traffic in Transit applied subjective and objective test in reviewing Russia’s invocation of GATT Article XXI(b)(iii). Despite the adjectival self-judging clause and the political tension of the dispute, the panel is capable to review its application. This study further finds that the term security interest and emergency in international relations still leaves the possibility of open interpretation. Research limitations/implications Because of the normative research approach, the research results lack empirical data and implications. Therefore, future research is encouraged to inquire on the empirical research. Originality/value This paper fulfils the need to study and explore security exception clause within the WTO framework as a normative rule of law and in the wider conceptual notion of security and emergency in international law.
Article
The General Agreement on Tariffs and Trade (GATT) Article XXI remains intact, without any modification, since the inception of the GATT in 1947. Recent economic and political developments, however, are not well addressed in the Security Exceptions enshrined in Article XXI. Moreover, the security exceptions that have been incorporated into the General Agreement on Trade in Services and the Trade-Related Aspects of Intellectual Property Rights Agreement feature some discrepancies as compared to the text in the GATT, which causes confusion. Some free trade agreements have occasionally introduced security exception provisions as well, with notable distinctions compared to those of the World Trade Organization (WTO). The current world trading system has to deal with wholly different dimensions of national security such as cyber-security, terrorism, and energy security. This situation raises an imminent question on how to make those arcane security exception provisions effectively workable legal disciplines. This article examines legal developments in WTO and Free Trade Agreement security exceptions and diagnoses the systematic challenges to effectively apply the Security Exceptions. The WTO Members need to address this issue as early as possible to avoid an unnecessary and inappropriate burden for the dispute settlement system. ***Full text can be found on ssrn page: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2809074
Book
In its first twenty years, the WTO dispute settlement system generated over 350 decisions totalling more than 60,000 pages. These decisions contain many statements by WTO adjudicators regarding the law of treaties, state responsibility, international dispute settlement, and other topics of general public international law. This book is a collection of nearly one thousand statements by WTO adjudicators relating to admissibility and jurisdiction; attribution of conduct to a State; breach of an obligation; conflicts between treaties; countermeasures; due process; evidence before international tribunals; good faith; judicial economy; municipal law; non-retroactivity; reasonableness; sources of international law; sovereignty; treaty interpretation; and words and phrases commonly used in treaties and other international legal instruments. This comprehensive digest presents summaries and extracts organized systematically under issue-specific sub-headings, making this jurisprudence easily accessible to students and practitioners working in any field of international law.
Article
The international conflict over the events in Ukraine led to the application of unilateral restrictive measures by the parties involved – the European Union, the United States and the Russian Federation – all of which are World Trade Organization (WTO) members and permanent members of the UN Security Council. It has been alleged by all sides that specified restrictions on trade in goods and services may constitute a violation of WTO obligations.The possibility of a challenge of the restrictive measures using the WTO dispute settlement mechanism revived the debate on the invocation of security exceptions allowingWTO members to apply otherwise inconsistent measures justified by their ‘essential security interests’. The present article aims at providing a critical analysis of the restrictive measures adopted by the parties and the perspectives for invoking the security exception in case of eventualWTO dispute settlement. The article highlights the ambiguity in the interpretation of the security exceptions and questions the suitability of theWTO dispute settlement mechanism for the resolution of the current Ukraine crisis.
Article
The constitutionalization of the WTO is forcing a reappraisal of certain states' claims based on national security. The authors examine the claim raised in the U.S.-EC Helms-Burton dispute that the very invocation of the GATT's security exception bars WTO review. They conclude that the sovereign prerogative of the state to define its essential security interests does not exclude the WTO's interpretive and adjudicatory competence. A clear separation of spheres allows for a constitutional solution within the system.
Article
The end of the Cold War and the emergence of a one-superpower world have brought about what one may call the resurrection of the Security Council and a reactivation of Chapter VII of the Charter of the United Nations. Powers of a coercive nature vested by the Charter in the Security Council which for decades seemed like a dead letter have been rediscovered since the Iraqi invasion of Kuwait. The Security Council, which until then had been deadlocked through the threat or use of the veto, has now come alive. Up to the Iraqi invasion of Kuwait in August 1990 the Security Council had passed 659 resolutions in its 45 years of existence. In the six years since then it has passed over 400 resolutions. What is more important, however, is that mandatory sanctions, which until 1990 had been ordered only twice—the comprehensive sanctions on Rhodesia and arms embargo on South Africa—have since been used by the Security Council in relation to at least eleven countries. This new and increased activity of the Security Council has provoked debate in recent years as to whether the Council is subject to any limitations when it is acting to maintain or restore international peace and security. The problem has shifted from one of trying to get the Council to work as it was intended, to one of trying to control the work of the Council. In particular there has been renewed interest in the question whether there is any room for judicial control, by the International Court of Justice, of decisions made by the political organs of the United Nations.
Vital Interests and the Law of GATT: An Analysis of GATT's Security Exception' (1991) 12 Michigan Journal of International Law 558
  • M J Hahn
Hahn MJ, 'Vital Interests and the Law of GATT: An Analysis of GATT's Security Exception' (1991) 12 Michigan Journal of International Law 558