A guest post from GDB, who is looking for input but wants to remain anonymous:
The recent economic sanctions on Iran, culminating with UN SC Resolution 1929 (2010) and the UN Members’ implementing measures, pose some problems of WTO compatibility, to the extent the measures fall under the scope of WTO Law. Let us recall that Iran is not a WTO Member and that previously some of the measures taken by the US (with extraterritorial effects) were contested by another affected WTO Member (see the EU response to Helms-Burton, DS 38 and to ILSA in 1996).
For the implementing measures of the Resolution 1929 see:
Briefly, the US and EU implementing measures of the UNSC Resolution 1929 may raise, inter alia,
the following questions:
1) Do the EU and US sanctions on Iran go beyond the UNSC Resolution 1929?
To answer this first question I will start by recalling that Resolution 1929 does not mention specific measures on energy issues, as Russia and China opposed this approach. Instead, a compromise was found by inserting in the preamble of the resolution: “noting the potential connection between Iran’s revenues derived from its energy sector and the funding of Iran’s proliferation sensitive nuclear activities”.
According to Kenneth Katzman, one of the most knowledgeable experts in US sanctions policy against Iran (rapporteur on ILSA for the Congress), “What was produced in Resolution 1929 was a formula under which very few new sanctions against Iran were made mandatory, but a great many new sanctions were authorized or called for by the Resolution. This structure enabled countries such as China and Russia to follow only the letter of the Resolution, while allowing the United States and its
allies to go far further in imposing sweeping new bilateral and multilateral sanctions against Iran.[…] Much of the U.S. intent of Resolution 1929 was to set up for further multilateral sanctions against Iran by like-minded countries, particularly in Europe. The preambular language of Resolution 1929 accomplished that objective […] Drawing that connection set the stage for a highly significant action by the European Union.” (Addendum U.S.-Iranian Relations: An Analytic Compendium of U.S. Policies, Laws, and Regulations, Atlantic Council, 2010, p. 2)
Do you agree with that? Is the resolution a “minimum standard of harmonization” for sanctions and the Members can go beyond, because of the mentioned language in the preamble?
2) If the EU and US sanctions exceed the UN mandate, can one still justify the measures in their entirety under WTO law?
As we know, under XXI(c) GATT and XIVbis:1 (c) GATS:
“Nothing in this Agreement shall be construed […] to prevent any Member from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.”
So far so good. Multilateral measures authorized by the UN are virtually immune, due to the specific place of the UN Charter and the UN SC in the international architecture.
But if we find that the measure exceeds the UN mandate, is it a violation of WTO law?
The reference I could find in the existing literature is in Cottier & Delimatsis (WTO Trade in Services, Max Plank Commentaries in world trade law, p. 345, partially relying on Schloemann & Ohlhoff): "Jurisdictions of panels and Appellate Body, however, exists to review whether measures adopted by Members exceed the severity of the measures approved by the multilateral decisions taken under Chapters VII and VIII of the Un Charter. […] Such authority exists for an examination of whether the measure is more infringing than what is required by the relevant resolution adopted. It is commensurate with the claim to be responded to that the measure is not sufficiently founded in Art. XIVbis :1 lit. c and therefore incompatible with WTO obligations."
So, if a measure is found in breach of GATT principles, it follows that the measure can be justified under XXI (c) only to the extent it does not exceed the UN mandate. Do you agree with that?
3) Is it still available to Members a unilateral defense (e.g. XXI (b) GATT) after the adoption of a multilateral defense, based on a UN SC Resolution (e.g. XXIc)?
To recall, Article XXI (b) GATT provides that:
“Nothing in this Agreement shall be construed […] (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;”.
Once the multilateral negotiations are exhausted, in good faith (see Nicaragua’s proposal on reform of the security exceptions) and a solution is adopted (in the UN SC), can one still go beyond the multilateral framework and act unilaterally? Can that measure in excess be justified by a unilateral defense? Can one say that the Members can go beyond the UN mandate, provided that, according to their own assessment, there is an “essential security interest” at stake?
Thank you very much for sharing your thoughts! GDB