This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.
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Summary of the dispute to date
The summary below was up-to-date at
Complaint by Ukraine
On 14 September 2016, Ukraine requested consultations with the Russian Federation regarding alleged multiple restrictions on traffic in transit from Ukraine through the Russian Federation to third countries.
Ukraine claimed that the measures appear to be inconsistent with:
- Articles V:2, V:3, V:4, V:5, X:1, X:2, X:3(a), XI:1, XVI:4 of the GATT 1994; and
- Paragraph 2 of Part I of the Russian Federation's Accession Protocol (to the extent that it incorporates paragraphs 1161, 1426 (first sentence), 1427 (first and third sentences) and 1428 of the Report of the Working Party on the Accession of the Russian Federation).
On 29 September 2016, the European Union requested to join the consultations.
Panel and Appellate Body proceedings
On 9 February 2017, Ukraine requested the establishment of a panel. At its meeting on 20 February 2017, the DSB deferred the establishment of a panel.
At its meeting on 21 March 2017, the DSB established a panel. Australia, Bolivia, Brazil, Canada, Chile, China, the European Union, India, Japan, Korea, Moldova, Norway, Paraguay, Saudi Arabia, Singapore, Turkey and the United States reserved their third-party rights.
On 22 May 2017, Ukraine requested the Director-General to compose the panel. On 6 June 2017, the Director-General composed the panel.
On 17 November 2017, the Chair of the panel informed the DSB that the panel expected to issue its final report to the parties by the end of 2018, in accordance with the timetable adopted after consultation with the parties. The Chair also informed the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depends on completion of translation.
On 28 September 2018, the Chair of the panel informed the DSB that, in the light of the complexity of the legal and factual issues in this dispute, the panel expected to issue its final report to the parties in the first quarter of 2019. The Chair reminded the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depends on completion of translation.
The dispute concerned Ukraine's challenges to Russian bans and restrictions on traffic in transit by road and rail, from Ukraine, across Russia and destined for Kazakhstan and the Kyrgyz Republic, as well as to the alleged de facto extension of these bans and restrictions to Ukrainian traffic in transit destined for Mongolia, Tajikistan, Turkmenistan and Uzbekistan (para 7.1).
Ukraine claimed that these transit measures are inconsistent with Russia's obligations under Article V (freedom of transit), Article X (publication and administration of trade regulations) and with related commitments in Russia's Accession Protocol (para. 7.2). Russia asserted that the measures were among those that it considered necessary for the protection of its essential security interests, which it took in response to the emergency in international relations that occurred in 2014, and which presented threats to Russia's essential security interests. Russia therefore invoked the provisions of Article XXI(b)(iii) of the GATT 1994, arguing that, as a result, the Panel lacked jurisdiction to further address the matter (paras. 7.3-7.4).
The Panel found that WTO panels have jurisdiction to review aspects of a Member's invocation of Article XXI(b)(iii), that Russia had met the requirements for invoking Article XXI(b)(iii) in relation to the measures at issue, and therefore, that the transit bans and restrictions were covered by Article XXI(b)(iii) of the GATT 1994.
Specifically, the Panel found that, while the chapeau of Article XXI(b) allows a Member to take action “which it considers necessary” for the protection of its essential security interests, this discretion is limited to circumstances that objectively fall within the scope of the three subparagraphs of Article XXI(b) (see paras. 7.101 and 7.53-7.100). Consequently, the Panel rejected Russia's jurisdictional argument that Article XXI(b)(iii) was totally “self-judging” (paras. 7.102-7.104).
Turning to subparagraph (iii) of Article XXI(b), and based on the particular circumstances affecting relations between Russia and Ukraine, the Panel determined from the evidence before it that the situation between Ukraine and Russia since 2014 was an “emergency in international relations” (paras. 7.76 and 7.114-7.123). The Panel also determined that the challenged transit bans and restrictions were taken in 2014 and 2016, and therefore were “taken in time of” this 2014 emergency (paras. 7.70 and 7.124-7.125). Accordingly, the Panel found that Russia's actions were objectively “taken in time of” an “emergency in international relations” under Article XXI(b)(iii) (see para. 7.126).
As for the discretion accorded to a Member under the chapeau of Article XXI(b), the Panel found that “essential security interests” could be generally understood as referring to those interests relating to the quintessential functions of the state. The Panel observed that the specific interests at issue will depend on the particular situation and perceptions of the state in question and can be expected to vary with changing circumstances. For these reasons, the Panel held that it is left in general to every Member to define what it considers to be its essential security interests (see paras. 7.130-7.131). Moreover, the Panel found that the specific language “which it considers” meant that it is for a Member itself to decide on the “necessity” of its actions for the protection of its essential security interests (see paras. 7.146-7.147).
That said, the Panel considered that a Member's general obligations to interpret and apply Article XXI(b)(iii) in good faith meant that WTO panels may review, (i) whether there was any evidence to suggest that the Member's designation of its essential security interests was not made in good faith, and (ii) whether the challenged measures were “not implausible” as measures to protect those essential security interests (see paras. 7.132-7.135 and 7.138-7.139). Accordingly, the Panel considered that:
- The 2014 emergency said to threaten Russia's essential security interests was very close to the “hard core” of war or armed conflict. In these circumstances, the Panel was satisfied of the veracity of Russia's designation of its essential security interests (paras. 7.136-7.137).
- The challenged transit bans and restrictions were not so remote from or unrelated to the 2014 emergency that it was implausible that Russia implemented these measures for the protection of its essential security interests arising out of the 2014 emergency (paras. 7.140-7.145).
The Panel also explained that Article XXI(b)(iii) acknowledges that a war or other emergency in international relations “involves a fundamental change of circumstances which radically alters the factual matrix in which the WTO-consistency of the measures at issue is to be evaluated.” Unlike evaluations of whether measures are covered by the exceptions in Article XX, an evaluation of measures under Article XXI(b)(iii) does not necessitate a prior determination that the measures would be WTO-inconsistent had they been taken in “normal times” (para. 7.108). The Panel therefore considered that, once it had found that the measures at issue were within its terms of reference and that Ukraine had established their existence, the “most logical next step” was to determine whether the measures were covered by Article XXI(b)(iii) of the GATT 1994 (para. 7.109).
The Panel acknowledged, however, that should its findings on Russia's invocation of Article XXI(b)(iii) be reversed in the event of an appeal, it may be necessary for the Appellate Body to complete the analysis (para. 7.154). In this connection, the Panel concluded that had the measures been taken in normal times, i.e. had they not been taken in an “emergency in international relations” (and met the other conditions of Article XXI(b)), Ukraine would have made a prima facie case that the measures at issue were inconsistent with (i) the first or second sentence of Article V:2 of the GATT 1994, or both, and (ii) related commitments in paragraph 1161 of Russia's Working Party Report (see paras. 7.166-7.184, 7.189-7.196 and 7.239-7.240). The Panel did not consider it necessary to address Ukraine's claims of violation of the other provisions of Article V and Article X of the GATT 1994 or other commitments in Russia's Accession Protocol (see paras. 7.197-7.201).
At its meeting on 26 April 2019, the DSB adopted the panel report.
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