In the way of sanctions, what should the world take care of

Can the developed world respond to Russia’s invasion of Ukraine – a major violation of international law – by adopting measures enshrined in international law? The United States, Canada and the European Union (EU) are using all the levers available to impose punitive economic sanctions on Russia. An important arrow in the ban quiver is the trade ban. For example, Canada suspended Most Favored Nation (MFN) behavior to Russia, which is owed to Russia under World Trade Organization (WTO) rules, i.e. the global body that enforces international law on multilateral trade. does. Canada believes that “those who do not support a rules-based international order cannot take advantage of it”. Similarly, the European Union and the US are considering similar steps.

In a parallel development, the US and EU have formally informed the WTO General Council that Russia’s participation in the “Coordinating Group of Developed Countries” (i.e., an informal grouping in the WTO) has been suspended due to “serious violations of international law”. Is. [the] United Nations Charter and Fundamental Principles of International Peace and Security”.

Article XXI Trade, Security

Based on the public justification offered by these countries, the question is: does the WTO allow its members to take action against another member for breaches of international law obligations on peace and security?

Under WTO rule, countries’ rights to impose trade sanctions, such as suspending MFNs on security grounds, are regulated by Article XXI of the General Agreement on Tariffs and Trade (GATT). Article XXI, the sole provision governing trade and security relations in the WTO, allows a member country to adopt measures necessary to protect its essential security interests (ESIs) taken in times of “war” or other “emergency”. gives the right. in international relations”. Article XXI is not entirely self-determination, although the term “what it believes” gives a country significant discretion in determining the need for a measure to be adopted to protect its ESI.

Article XXI is a defense that countries can employ on charges of violating their WTO obligations. Thus, Canada can justify a deviation from the MFN rule by demonstrating that it is protecting its ESI in the event of an ongoing war or emergency in international relations. However, Article XXI cannot be employed to determine whether Russia has violated international law on peace and security.

As argued by international trade lawyer Mona Pinchis-Poulson, this interpretation of Article XXI was confirmed by the 2019 WTO panel in the ‘Russia – Measures of Traffic in Transit’ case which coincidentally included Russia and Ukraine. The dispute arose after Russia’s annexation of Crimea (2014), which, in turn, triggered economic sanctions against Russia. Russia retaliated by imposing transit restrictions and sanctions on the movement of Ukrainian goods into Kyrgyzstan. Hearing Ukraine’s challenge to Russian transit sanctions, the WTO panel refused to characterize the Russian invasion of Ukraine as a violation of international law in general.

international law justification

If Russia challenges the Canadian suspension of MFN before the WTO’s dispute settlement body (DSB), Canada must demonstrate that its action is supported by Article XXI. Canada’s argument that it is doing so because Russia does not respect a rules-based order would have no basis in WTO law. Even if it is judicially established that the Russian invasion of Ukraine is a violation of international law, only in accordance with WTO law would not suffice to impose trade sanctions against Russia unless countries make a clear case under Article XXI.

The Russo-Ukraine War undoubtedly constitutes an international armed conflict, as evidenced by a recent United Nations General Assembly resolution. In addition, the violation of the territorial integrity of Ukraine threatens the ESI of many countries. Thus, countries can use the legal cover of Article XXI for trade sanctions.

Many argue that neither of these is the case because the dispute will not go to the DSB, which remains severely crippled because of the US; The US has been barring the appointment of members of the appellate body for the past several years. But this argument is unable to see the wood for the trees. Countries that want Russia to respect the rules-based order must abide by it themselves, even if their actions have been judicially scrutinized. Countering Russian illegality with measures not covered by international law amounts to retaliation. If each country begins to take law into its own hands, the legitimacy of the rules-based international order, which is already at a low level, will crash.

Prabhas Ranjan, Professor and Vice Dean, Jindal Global Law School, OP Jindal Global University. Views expressed are personal