Russia – Measures Concerning Traffic in Transit (World Trade Organization) Report

On 5 April 2019, the World Trade Organization published its Panel report on “Russia – Measures Concerning Traffic in Transit,”  which reviewed for the first time the national security exception contained in Article XXI of the General Agreement on Tariffs and Trade 1994 (GATT).

In this case, Ukraine challenged the legality of Russian measures restricting the transit of the Ukrainian goods meant for Central Asia through the Russian territory.  Russia justified the transit restrictions on the basis of the national security exception as “necessary for the protection of its essential security interests” and argued that the WTO Panel had no jurisdiction to address the issues.

Russia’s claim on jurisdiction was rejected by the WTO Panel, which determined that it had jurisdiction to interpret the clause and review the matter. The Panel then defined an emergency in international relations as “a situation of armed conflict, or of latent armed conflict, or of heightened tension or crisis, or of general instability engulfing or surrounding a state.”

The Panel concluded that, had the measures been taken in normal times, i.e. had they not been taken in time of an “emergency in international relations” (and met the other conditions of Article XXI(b)), Ukraine would have made a prima facie case that the following measures were inconsistent with the second sentence of Article V:2 of the GATT 1994.

The Panel decided that Russia had established that “the situation between Ukraine and Russia had constituted an emergency in international relations since 2014 and its measures were taken during an “emergency in international relations” and were therefore covered by Article XXI of the GATT.

These findings may have important implications for other pending disputes involving the national security exception.  The United States and Egypt argued in various disputes that issues of national security issues are political and therefore “self-judging” and inappropriate for WTO adjudication.

The findings are of relevance for the disputes that have been recently initiated against the United States’ measures on steel and aluminum, automobiles parts and other goods in which the United States rely on this exception.

The findings may also have an effect on several pending WTO disputes, the United Arab Emirates, the Kingdom of Bahrain and the Kingdom of Saudi Arabia justified by security exceptions their restrictive measures against Qatar.

Read full text: Russia – Measures Concerning Traffic in Transit

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About the Author:

Prof Yarik Kryvoi, MCIArb is the founder and co-editor of the CIS Arbitration Forum. He is the Senior Research Fellow in International Economic Law and Director of the Investment Treaty Forum at the British Institute of International and Comparative Law (BIICL). He holds law degrees from Harvard, Moscow and St Petersburg. He has been teaching and practicing international arbitration in Russia, the United States and England for over ten years and is listed as arbitrator by several arbitration institutions. Prof Kryvoi also served as a Co-Chair of the International Courts Committee of the American Bar Association's Section of International Law. He also serves a tutor at the Chartered Institute of Arbitrators in London. See full profile at kryvoi.net.

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