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Report of the Panel

CASES CITED IN THIS REPORT

Short TitleFull Case Title and Citation
Argentina – Footwear (EC) Appellate Body Report, Argentina – Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, adopted 12 January 2000, DSR 2000:I, p. 515
Argentina – Textiles and Apparel Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted 22 April 1998, DSR 1998:III, p. 1003
Australia – Apples Panel Report, Australia – Measures Affecting the Importation of Apples from New Zealand, WT/DS367/R, adopted 17 December 2010, as modified by Appellate Body Report WT/DS367/AB/R, DSR 2010:VI, p. 2371
Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, p. 3327
Argentina – Import Measures Appellate Body Reports, Argentina – Measures Affecting the Importation of Goods, WT/DS438/AB/R / WT/DS444/AB/R / WT/DS445/AB/R, adopted 26 January 2015, DSR 2015:II, p. 579
Canada – Aircraft Panel Report, Canada – Measures Affecting the Export of Civilian Aircraft, WT/DS70/R, adopted 20 August 1999, upheld by Appellate Body Report WT/DS70/AB/R, DSR 1999:IV, p. 1443
Canada Periodicals Appellate Body Report, Canada – Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, p. 449
Canada – Renewable Energy / Canada – Feed-in Tariff Program Appellate Body Reports, Canada – Certain Measures Affecting the Renewable Energy Generation Sector / Canada – Measures Relating to the Feed-in Tariff Program, WT/DS412/AB/R / WT/DS426/AB/R, adopted 24 May 2013, DSR 2013:I, p. 7
Canada – Wheat Exports and Grain Imports Appellate Body Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/AB/R, adopted 27 September 2004, DSR 2004:VI, p. 2739
Chile – Price Band System Panel Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products, WT/DS207/R, adopted 23 October 2002, as modified by Appellate Body Report WT/DS207AB/R, DSR 2002:VIII, p. 3127
China – Auto Parts Appellate Body Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, adopted 12 January 2009, DSR 2009:I, p. 3
China – Broiler Products Panel Report, China – Anti-Dumping and Countervailing Duty Measures on Broiler Products from the United States, WT/DS427/R and Add.1, adopted 25 September 2013, DSR 2013:IV, p. 1041
China – HP-SSST (Japan) / China – HP-SSST (EU) Appellate Body Reports, China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from Japan / China – Measures Imposing Anti-Dumping Duties on High-Performance Stainless Steel Seamless Tubes ("HP-SSST") from the European Union, WT/DS454/AB/R and Add.1 / WT/DS460/AB/R and Add.1, adopted 28 October 2015, DSR 2015:IX, p. 4573
China – Publications and Audiovisual Products Appellate Body Report, China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS363/AB/R, adopted 19 January 2010, DSR 2010:I, p. 3
China – Rare Earths 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
China – Rare Earths Panel Reports, China – Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum, WT/DS431/R and Add.1 / WT/DS432/R and Add.1 / WT/DS433/R and Add.1, adopted 29 August 2014, upheld by Appellate Body Reports WT/DS431/AB/R / WT/DS432/AB/R / WT/DS433/AB/R, DSR 2014:IV, p. 1127
China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, adopted 22 February 2012, DSR 2012:VII, p. 3295
Dominican Republic – Import and Sale of Cigarettes Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May 2005, DSR 2005:XV, p. 7367
EC Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 April 2001, DSR 2001:VII, p. 3243
EC – Bananas III (Article 21.5 – Ecuador II) / EC – Bananas III (Article 21.5 – US) Appellate Body Reports, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Second Recourse to Article 21.5 of the DSU by Ecuador,WT/DS27/AB/RW2/ECU, adopted 11 December 2008, and Corr.1 / European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Article 21.5 of the DSU by the United States, WT/DS27/AB/RW/USA and Corr.1, adopted 22 December 2008, DSR 2008:XVIII, p. 7165
EC – Bananas III (Ecuador) (Article 22.6 – EC) Decision by the Arbitrator, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Recourse to Arbitration by the European Communities under Article 22.6 of the DSU, WT/DS27/ARB/ECU, 24 March 2000, DSR 2000:V, p. 2237
EC – Chicken Cuts Appellate Body Report, European Communities – Customs Classification of Frozen Boneless Chicken Cuts, WT/DS269/AB/R, WT/DS286/AB/R, adopted 27 September 2005, and Corr.1, DSR 2005:XIX, p. 9157
EC – Computer Equipment 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
EC – IT Products Panel Reports, European Communities and its member States – Tariff Treatment of Certain Information Technology Products, WT/DS375/R / WT/DS376/R / WT/DS377/R, adopted 21 September 2010, DSR 2010:III, p. 933
EC – Poultry Appellate Body Report, European Communities – Measures Affecting the Importation of Certain Poultry Products, WT/DS69/AB/R, adopted 23 July 1998, DSR 1998:V, p. 2031
EC – Selected Customs Matters Appellate Body Report, European Communities – Selected Customs Matters, WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p. 3791
EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R, adopted 20 April 2004, DSR 2004:III, p. 925
EC and certain member States – Large Civil Aircraft Appellate Body Report, European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R, adopted 1 June 2011, DSR 2011:I, p. 7
EC and certain member States – Large Civil Aircraft 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
Japan – Agricultural Products II Appellate Body Report, Japan – Measures Affecting Agricultural Products, WT/DS76/AB/R, adopted 19 March 1999, DSR 1999:I, p. 277
Japan – Alcoholic Beverages II 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
Mexico – Corn Syrup (Article 21.5 – US) Appellate Body Report, Mexico – Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU by the United States, WT/DS132/AB/RW, adopted 21 November 2001, DSR 2001:XIII, p. 6675
Mexico – Taxes on Soft Drinks Appellate Body Report, Mexico – Tax Measures on Soft Drinks and Other Beverages, WT/DS308/AB/R, adopted 24 March 2006, DSR 2006:I, p. 3
Peru – Agricultural Products Appellate Body Report, Peru – Additional Duty on Imports of Certain Agricultural Products, WT/DS457/AB/R and Add.1, adopted 31 July 2015, DSR 2015:VI, p. 3403
Peru – Agricultural Products Panel Report, Peru – Additional Duty on Imports of Certain Agricultural Products, WT/DS457/R and Add.1, adopted 31 July 2015, as modified by Appellate Body Report WT/DS457/AB/R, DSR 2015:VII, p. 3567
Russia – Railway Equipment Panel Report, Russia – Measures Affecting the Importation of Railway Equipment and Parts Thereof, WT/DS499/R and Add.1, circulated to WTO Members 30 July 2018 [appealed by Ukraine 27 August 2018]
Russia – Tariff Treatment Panel Report, Russia – Tariff Treatment of Certain Agricultural and Manufacturing Products, WT/DS485/R, Add.1, Corr.1, and Corr.2, adopted 26 September 2016, DSR 2016:IV, p. 1547
US – 1916 Act 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
US – Anti-Dumping Measures on Oil Country Tubular Goods Appellate Body Report, United States – Anti-Dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico, WT/DS282/AB/R, adopted 28 November 2005, DSR 2005:XX, p. 10127
US – Anti-Dumping Measures on Oil Country Tubular Goods Panel Report, United States – Anti-Dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico, WT/DS282/R, adopted 28 November 2005, as modified by Appellate Body Report WT/DS282/AB/R, DSR 2005:XXI, p. 10225
US – Carbon Steel Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R and Corr.1, adopted 19 December 2002, DSR 2002:IX, p. 3779
US – Continued Zeroing Appellate Body Report, United States – Continued Existence and Application of Zeroing Methodology, WT/DS350/AB/R, adopted 19 February 2009, DSR 2009:III, p. 1291
US – Continued Zeroing Panel Report, United States – Continued Existence and Application of Zeroing Methodology, WT/DS350/R, adopted 19 February 2009, as modified as Appellate Body Report WT/DS350/AB/R, DSR 2009:III, p. 1481
US – Cotton Yarn Appellate Body Report, United States – Transitional Safeguard Measure on Combed Cotton Yarn from Pakistan, WT/DS192/AB/R, adopted 5 November 2001, DSR 2001:XII, p. 6027
US – Countervailing and Anti-Dumping Measures (China) Appellate Body Report, United States – Countervailing and Anti-Dumping Measures on Certain Products from China, WT/DS449/AB/R and Corr.1, adopted 22 July 2014, DSR 2014:VIII, p. 3027
US – FSC Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations", WT/DS108/AB/R, adopted 20 March 2000, DSR 2000:III, p. 1619
US – Hot-Rolled Steel Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 23 August 2001, DSR 2001:X, p. 4697
US – Lamb Appellate Body Report, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177/AB/R, WT/DS178/AB/R, adopted 16 May 2001, DSR 2001:IX, p. 4051
US – Large Civil Aircraft (2nd complaint) (Article 21.5 – EU) Panel Report, United States – Measures Affecting Trade in Large Civil Aircraft (Second Complaint) – Recourse to Article 21.5 of the DSU by the European Union, WT/DS353/RW and Add.1, circulated to WTO Members 9 June 2017 [appealed by the European Union 29 June 2017]
US Line Pipe Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/AB/R, adopted 8 March 2002, DSR 2002:IV, p. 1403
US – Nicaraguan Trade GATT Panel Report, United States – Trade Measures Affecting Nicaragua, L/6053, 13 October 1986 (unadopted)
US – Oil Country Tubular Goods Sunset Reviews Appellate Body Report, United States – Sunset Reviews of Anti-Dumping Measures on Oil Country Tubular Goods from Argentina, WT/DS268/AB/R, adopted 17 December 2004, DSR 2004:VII, p. 3257
US – Orange Juice (Brazil) Panel Report, United States – Anti-Dumping Administrative Reviews and Other Measures Related to Imports of Certain Orange Juice from Brazil, WT/DS382/R, adopted 17 June 2011, DSR 2011:VII, p. 3753
US – Shrimp 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
US – Sugar Quota GATT Panel Report, United States – Imports of Sugar from Nicaragua, L/5607, adopted 13 March 1984, BISD 31S/67
US – Tuna II (Mexico) (Article 21.5 – Mexico) Appellate Body Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products – Recourse to Article 21.5 of the DSU by Mexico, WT/DS381/AB/RW and Add.1, adopted 3 December 2015, DSR 2015:X, p. 5133
US – Wheat Gluten Appellate Body Report, United States – Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities, WT/DS166/AB/R, adopted 19 January 2001, DSR 2001:II, p. 717
US – Wool Shirts and Blouses Appellate Body Report, United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R, adopted 23 May 1997, and Corr.1, DSR 1997:I, p. 323

JUDGMENTS OF INTERNATIONAL COURTS AND TRIBUNALS CITED IN THIS REPORT

Short TitleFull Case Title and Citation
Case Concerning the Northern Cameroons International Court of Justice, Preliminary Objections, Case Concerning the Northern Cameroons, (Cameroon v. United Kingdom) (1963) ICJ Reports, p. 15
Case Concerning Oil Platforms International Court of Justice, Merits, Case Concerning Oil Platforms, (Islamic Republic of Iran v. United States of America) (2003) ICJ Reports, p. 161
Case ofMilitary and Paramilitary Activities in and Against Nicaragua International Court of Justice, Merits, Case ofMilitary and Paramilitary Activities in and Against Nicaragua, (Nicaragua v. United States of America) (1986) ICJ Reports, p. 14
Certain Expenses of the United Nations International Court of Justice, Advisory Opinion, Certain Expenses of the United Nations, (United Nations) (1962) I.C.J. Reports, p. 151
Nuclear Tests Case International Court of Justice, Questions of Jurisdiction and/or Admissibility, Nuclear Tests Case, (Australia v. France) (1974) ICJ Reports, p. 253
Prosecutor v. Tadić International Criminal Tribunal for the Former Yugoslavia, Decision on the Defence Motion for Interlocutory Appeal on Jurisdiction, Prosecutor v. Tadić,(1995), Case No IT-94-1-A

ABBREVIATIONS

AbbreviationDescription
1982 Decision Decision Concerning Article XXI of the General Agreement
2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods, or 2014 Belarus-Russia Border Bans Prohibitions on transit from Ukraine across Russia, through checkpoints in Belarus, of goods subject to veterinary and phytosanitary surveillance and which are subject to the import bans implemented by Resolution No. 778, along with related requirements that, as of 30 November 2014, such veterinary goods destined for Kazakhstan or third countries enter Russia through designated checkpoints on the Russian side of the external customs border of the EaEU and only pursuant to permits issued by the relevant veterinary surveillance authorities of the Government of Kazakhstan and the Rosselkhoznadzor, and that, as of 24 November 2014, transit to third countries (including Kazakhstan) of such plant goods takes place exclusively through the checkpoints across the Russian state border
2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods Bans on all road and rail transit from Ukraine of: (a) goods that are subject to non-zero import duties according to the Common Customs Tariff of the EaEU, and (b) goods that fall within the scope of the import bans imposed by Resolution No. 778, which are destined for Kazakhstan or the Kyrgyz Republic. Transit of such goods may only occur pursuant to a derogation requested by the Government of Kazakhstan or the Government of the Kyrgyz Republic, which is then authorized by the Russian Government, in which case, the transit is subject to the 2016 Belarus Transit Requirements (below)
2016 Belarus Transit Requirements Requirements that all international cargo transit by road and rail from Ukraine destined for the Republic of Kazakhstan or the Kyrgyz Republic, through Russia, be carried out exclusively from the Belarus-Russia border, and comply with a number of additional conditions related to identification and registration cards at specific control points on the Belarus-Russia border and the Russia-Kazakhstan border
A350 Airbus A350 Aircraft
April 1989 Decision Improvements to the GATT Dispute Settlement System Rules and Procedures, Decision of 12 April 1989, L/6489, 13 April 1989
BCI Business Confidential Information
CIS-FTA Treaty on a Free Trade Area between the members of the Commonwealth of Independent States, done at St Petersburg, 18 October 2011, retrieved from: http://rtais.wto.org/rtadocs/762/TOA/English/FTA%20CIS_Text%20with%20protocols.docx
Covered agreements Agreements listed in Appendix 1 (of the Understanding on Rules and Procedures Governing the Settlement of Disputes)
CU Customs Union
DCFTA Deep and Comprehensive Free Trade Area Title IV (Trade and Trade-Related Matters) of the Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part, L 161/13, Vol. 57, 29 May 2014, ISSN 1977-0677
De facto measure Restrictions on the traffic in transit from the territory of Ukraine through the territory of the Russian Federation to countries in Central and Eastern Asia and Caucasus other than the Republic of Kazakhstan and the Kyrgyz Republic by de facto applying Decree No. 1 and Resolution No. 1 to transit from the territory of Ukraine to third countries other than the Republic of Kazakhstan and the Kyrgyz Republic
Decree No. 1 Decree of the President of the Russian Federation No. 1, "On measures to ensure economic security and national interests of the Russian Federation in international cargo transit from the territory of Ukraine to the territory of the Republic of Kazakhstan through the territory of the Russian Federation", dated 1 January 2016
Decree No. 319 Decree of the President of the Russian Federation No. 319, "On Amendments to the Decree of the President of the Russian Federation No. 1 of 1 January 2016", dated 1 July 2016
Decree No. 560 Decree of the President of the Russian Federation No. 560, "On the application of certain special economic measures to ensure security of the Russian Federation", dated 6 August 2014
Decree No. 643 Decree of the President of the Russian Federation No. 643, "On amendments to the Decree of the President of the Russian Federation No. 1 of 1 January 2016 'On measures to ensure economic security and national interests of the Russian Federation in international cargo transit from the territory of Ukraine to the territory of the Republic of Kazakhstan through the territory of the Russian Federation'", dated 30 December 2017
DSB Dispute Settlement Body
DSU Understanding on Rules and Procedures Governing the Settlement of Disputes
EaEU Eurasian Economic Union
EaEU Treaty Treaty on the Establishment of the Eurasian Economic Union, done at Astana, 29 May 2014, retrieved from: https://www.wto.org/english/thewto_e/acc_e/kaz_e/WTACCKAZ85_LEG_1.pdf
EU-Ukraine Association Agreement Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part, Official Journal of the European Union, L 161, Vol. 57, 29 May 2014, ISSN 1977-0677
GATS General Agreement on Trade and Services
GATT General Agreement on Tariffs and Trade
GATT 1947 General Agreement on Tariffs and Trade 1947
GATT 1994 General Agreement on Tariffs and Trade 1994
GLONASS Global Navigation Satellite System (Russian translation: Globalnaya Navigazionnaya Sputnikovaya Sistema)
Helms-Burton Act Cuban Liberty and Democratic Solidarity (LIBERTAD) Act
ICJ International Court of Justice
Import Licensing Agreement Agreement on Import Licensing Procedures
ITO International Trade Organization
LA/MSF Launch aid / member State financing
PJSC Notice Public Joint-Stock Company "Russian Railways" Notice on assessing the fee for placing/removal of GLONASS seals at Moskovskaya, Privolzhskaya, Yugo-Vostochnaya (South-Eastern) Railways, dated 17 May 2016
PJSC Order Public Joint-Stock Company "Russian Railways" Order No. 529r, "On approval of the procedure for installing (removing) of the identification means (seals) operating on the basis of the technology GLONASS", dated 28 March 2016
Plant Instruction Instruction No. FS-AS-3/22903 of the Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor), dated 21 November 2014
Ramírez – López Treaty Treaty on Maritime Delimitation in the Caribbean Sea
Resolution No. 1 Resolution No. 1 of the Government of the Russian Federation, "On measures related to the implementation of the Decree of the President of the Russian Federation No. 1 of 1 January 2016", dated 1 January 2016
Resolution No. 778 Resolution of the Government of the Russian Federation No. 778, "On measures for implementation of the Decree of the President of the Russian Federation No. 560 of 6 August 2014 'On the application of certain special economic measures to ensure security of the Russian Federation'", dated 7 August 2014
Rosselkhoznadzor Russian Federal Service for Veterinary and Phytosanitary Surveillance
Russia's Accession Protocol Protocol of the Accession of the Russian Federation, WT/MIN(11)/24; WT/L/839, 17 December 2011
Russia's Working Party Report Report of the Working Party on the Accession of the Russian Federation to the WTO, WT/ACC/RUS/70 and WT/MIN(11)/2, dated 11 November 2011
SPS Agreement Agreement on the Application of Sanitary and Phytosanitary Measures
TBT Agreement Agreement on Technical Barriers to Trade
TPRM Trade Policy Review Mechanism
TRIPS Agreement Agreement on Trade-Related Aspects of Intellectual Property Rights
Ukraine's 2016 Trade Policy Review Report Trade Policy Review Body, Trade Policy Review, Ukraine, Government Report prepared by Ukraine, WT/TPR/G/334
UN Charter Charter of the United Nations, done at San Francisco, 24 October 1945, UN Treaty Series Vol. 1, p. XVI
UN General Assembly General Assembly of the United Nations
US Draft Charter United States, Department of State, "Suggested Charter for an International Trade Organization of the United Nations", Publication 2598, Commercial Policy Series 93, September 1946
Veterinary Instruction Instruction No. FS-NV-7/22886 of the Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor), dated 21 November 2014
Vienna Convention Vienna Convention on the Law of Treaties, done at Vienna, 23 May 1969, UN Treaty Series, Vol. 115, p. 331
WTO World Trade Organization
WTO Agreement Marrakesh Agreement Establishing the World Trade Organization

1 INTRODUCTION

1.1 COMPLAINT BY UKRAINE

1.1.
On 14 September 2016, Ukraine requested consultations with the Russian Federation (Russia) pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and Article XXII of the General Agreement on Tariffs and Trade 1994 (GATT 1994) with respect to the measures and claims set out below.1
1.2.
Consultations were held on 10 November 2016 between Ukraine and Russia. These consultations failed to resolve the dispute.2

1.2 PANEL ESTABLISHMENT AND COMPOSITION

1.3.
On 9 February 2017, Ukraine requested the establishment of a panel pursuant to Article 4.7 and Article 6 of the DSU, and Article XXIII of the GATT 1994 with standard terms of reference.3 At its meeting on 21 March 2017, the Dispute Settlement Body (DSB) established a panel pursuant to Ukraine's request in document WT/DS512/3, in accordance with Article 6 of the DSU.4
1.4.
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 making the recommendations or in giving the rulings provided for in those agreements.5

1.5.
On 22 May 2017, Ukraine requested the Director-General to determine the composition of the panel, pursuant to Article 8.7 of the DSU. On 6 June 2017, the Director-General accordingly composed the Panel as follows6:

Chairperson: Professor Georges Abi-Saab

Members: Professor Ichiro Araki

Dr Mohammad Saeed

1.6.
Australia, Bolivia, Brazil, Canada, Chile, China, the European Union, India, Japan, Korea, Moldova, Norway, Paraguay, Saudi Arabia, Singapore, Turkey and the United States notified their interest in participating in the Panel proceedings as third parties.

1.3 PANEL PROCEEDINGS

1.3.1 General

1.7.
The Panel held an organizational meeting with the parties on 28 June 2017.
1.8.
After consultation with the parties, the Panel adopted its Working Procedures7 and timetable8 on 12 July 2017.
1.9.
The Panel held a first substantive meeting with the parties on 23 and 25 January 2018. A session with the third parties took place on 25 January 2018. The Panel held a second substantive meeting with the parties on 15 May 2018.
1.10.
On 31 July 2018, the Panel issued the descriptive part of its Report to the parties. The Panel issued its Interim Report to the parties on 29 January 2019. The Panel issued its Final Report to the parties on 28 March 2019.

1.3.2 Additional Working Procedures for the Protection of Business Confidential Information

1.11.
After consultation with both parties, the Panel adopted Additional Working Procedures concerning the protection of Business Confidential Information (BCI), on 25 August 2017.9

1.3.3 Request for enhanced third party rights by certain third parties

1.12.
On 10 November 2017, Australia, Canada and the European Union jointly requested the Panel to grant to all of the third parties certain additional third-party rights in these proceedings. The Panel invited the parties and other third parties, on 20 November 2017, to comment on the joint request. On 1 December 2017, Ukraine, Russia and certain of the other third parties (Brazil, China, Japan, Singapore and the United States) provided comments on the joint request. In a communication dated 9 January 2018, the Panel informed the parties and third parties that it had decided to grant the following enhanced third-party rights to all of the third parties:

a. The right to attend the portions of the party session of the first substantive meeting at which the parties deliver their opening oral statements, and closing oral statements, respectively; and

b. The right to receive the provisional written versions of the parties' opening oral statements and closing oral statements, respectively, at the portions of the party session of the first substantive meeting at which those statements are delivered, as well as the final versions of such oral statements at the end of the day on which they are delivered.

1.13.
The Panel's decision is set out in Annex B-1.

1.3.4 Russia's request for a preliminary ruling

1.14.
In its first written submission, Russia requested that the Panel issue a ruling, no later than the date for filing the parties' second written submissions, that the category of measures identified in Ukraine's first written submission as the "2014 transit bans and other transit restrictions" is outside the Panel's terms of reference.10
1.15.
On 13 March 2018, the Panel issued a communication to the parties in which it advised that it had decided to address the issue of whether the 2014 transit bans and other transit restrictions are outside the Panel's terms of reference, together with the merits, and would therefore defer its ruling on that issue until the issuance of the Report.11
1.16.
The Panel's ruling on whether the 2014 transit bans and other transit restrictions are outside the Panel's terms of reference, and other issues concerning the Panel's terms of reference, is addressed in Section 7.7 of this Report.

1.3.5 Russia's complaint of alleged breaches of confidentiality by a third party

1.17.
In a letter to the Panel dated 14 March 2018, Russia complained that the European Union, a third party in this dispute, had violated confidentiality obligations under various provisions of the DSU and of the Working Procedures by publishing the European Union's third-party submission and third-party statement on the website of the European Commission's Directorate-General for Trade.12 By communication dated 16 March 2018, the Panel invited the European Union and any other third parties, as well as Ukraine, to provide any comments on Russia's complaint by 21 March 2018. Accordingly, on 21 March 2018, the European Union, Australia, Brazil, Canada, the United States and Ukraine each provided comments on Russia's complaint. On 23 March 2018, the Panel invited Russia to respond to these comments by 4 April 2018. On that date, Russia provided its response.
1.18.
On 16 May 2018, the Panel issued a ruling in which it declined to take any action in respect of the published European Union third-party submission and third-party statement on the grounds that it did not consider that such publication violated the confidentiality obligations under Article 18.2 of the DSU, the Working Procedures or any other applicable confidentiality obligations. Particularly, the Panel did not agree with the proposition that legal arguments and opinions of parties in WTO dispute settlement proceedings were inherently confidential, or capable of designation as confidential information under the third sentence of Article 18.2 of the DSU. The Panel's ruling is set out in Annex B-2.

1.3.6 Other procedural complaints

1.19.
In an email message dated 28 March 2018, Ukraine alleged that Russia had failed to file Exhibit RUS-20 (UKR) in accordance with paragraph 25 of the Working Procedures because it filed this exhibit by means of reference to a web link. In a communication to the parties dated 6 April 2018, the Panel noted that Russia had promptly submitted a paper version of Exhibit RUS‑20 (UKR) by 5:00 p.m. on the due date for submission, and that in accordance with paragraph 25(b) of the Working Procedures, Exhibit RUS-20 (UKR) therefore formed part of the factual record in this dispute. The Panel also noted that, due to the size of the exhibit, the PDF file containing Exhibit RUS‑20 (UKR) could not be attached to an email message. The Panel therefore requested Russia to provide Exhibit RUS-20 (UKR) to Ukraine in one of the other formats set forth in paragraph 25(b) of the Working Procedures, namely, on a USB key, a CD-ROM or a DVD.
1.20.
In an email message dated 18 May 2018, Russia complained that Ukraine had failed to file Exhibits UKR-106 (BCI) through UKR-115 in accordance with subparagraph (a) of the Panel's invitation to the second substantive meeting dated 27 April 2018. Russia submitted that, owing to this failure, the Panel should not accept and consider these exhibits. In a communication to the parties dated 22 May 2018, the Panel declined Russia's request, observing that while the electronic versions of the exhibits were not provided to Russia or submitted to the Dispute Settlement Registry until 18 May 2018, Ukraine had previously served paper copies of Exhibits UKR-106 (BCI) to UKR-115 on Russia and on the Panel on 15 May 2018, at the second substantive meeting. The paper copies of those exhibits constitute the official versions of those exhibits for purposes of the record of the dispute under paragraph 25(b) of the Working Procedures.
1.21.
During the second substantive meeting on 15 May 2018, Russia alleged that Ukraine had untimely filed Exhibit UKR-106 (BCI) in a manner inconsistent with paragraph 7 of the Working Procedures. Russia rejected Ukraine's assertion that Exhibit UKR-106 (BCI) was "necessary for purposes of rebuttal" and requested, in a letter dated 13 June 2018, that the Panel strike Exhibit UKR-106 (BCI) from the record. In a communication to the parties dated 23 July 2018, the Panel granted Russia's request, observing that, in the first round of arguments, Ukraine's arguments concerning the existence of the measures in question related to the legal existence of the measures in Russia's legal system without reference to any specific instances of application, i.e., Ukraine's arguments related to the existence of the measures "as such". At the second substantive meeting, Ukraine reiterated its "as such" argument while also submitting the contested exhibit concerning the application of the measure, in one instance, as evidence in support of its main argument. In the Panel's view, this did not make such evidence "necessary for the purposes of rebuttal" within paragraph 7 of the Working Procedures. The Panel's ruling is set out in Annex B-3.

2 FACTUAL ASPECTS

2.1.
This dispute concerns various measures imposed by Russia on transit by road and rail through the territory of Russia, as well as the publication and administration of those measures. Additional information concerning the measures and the factual background against which they were adopted is set forth in Sections 7.3 and 7.7 of this Report.

3 PARTIES' REQUESTS FOR FINDINGS AND RECOMMENDATIONS

3.1.
Ukraine requests that the Panel find that the measures at issue are inconsistent with Russia's obligations under the first sentence of Article V:2, the second sentence of Article V:2, Article V:3, Article V:4 and Article V:5 of the GATT 1994, and with paragraph 2 of Part I of the Protocol of Accession of the Russian Federation (Russia's Accession Protocol)13, which incorporates commitments in paragraph 1161 of the Report of the Working Party on the Accession of the Russian Federation to the WTO (Russia's Working Party Report)14; as well as Article X:1 of the GATT 1994 and commitments in paragraph 1426 of Russia's Working Party Report, as incorporated into its Accession Protocol by reference; Article X:2 of the GATT 1994 and commitments in paragraph 1428 of Russia's Working Party Report, as incorporated into its Accession Protocol by reference; commitments in paragraph 1427 of Russia's Working Party Report, as incorporated into its Accession Protocol by reference; and Article X:3(a) of the GATT 1994. Ukraine further requests, pursuant to Article 19.1 of the DSU, that the Panel recommend that Russia bring its measures into conformity with its WTO obligations.
3.2.
Russia invokes Article XXI(b)(iii) of the GATT 1994 and requests the Panel, for lack of jurisdiction, to limit its findings to recognizing that Russia has invoked a provision of Article XXI of the GATT 1994, without engaging further to evaluate the merits of Ukraine's claims. Russia considers that the Panel lacks jurisdiction to evaluate measures in respect of which Article XXI of the GATT 1994 is invoked.

4 ARGUMENTS OF THE PARTIES

4.1.
The arguments of the parties are reflected in their executive summaries, provided to the Panel in accordance with paragraph 19 of the Working Procedures adopted by the Panel (see Annexes C‑1 and C-4). They are also reiterated where relevant in the Panel's analysis.

5 ARGUMENTS OF THE THIRD PARTIES

5.1.
The arguments of Australia, Brazil, Canada, China, the European Union, Japan, Moldova, Singapore, Turkey and the United States are reflected in their executive summaries, provided in accordance with paragraph 20 of the Working Procedures adopted by the Panel (see Annexes D-1 through D‑10). Turkey made oral arguments to the Panel but did not submit written arguments. Bolivia, Chile, India, Korea, Norway, Paraguay and Saudi Arabia did not submit written or oral arguments to the Panel.

6 INTERIM REVIEW

6.1.
The Panel issued its Interim Report to the parties on 29 January 2019. Both parties submitted written requests for review of precise aspects of the Interim Report on 14 February 2019. Neither party requested an interim review meeting. On 28 February 2019, both parties submitted written comments on each other's written requests for review.
6.2.
The parties' requests made at the interim stage, as well as the Panel's discussion and disposition of those requests, are set out in Annex E-1.

7 FINDINGS

7.1 OVERVIEW OF UKRAINE'S COMPLAINTS

7.1.
Ukraine's main complaints may be succinctly stated as follows:

a. Since 1 January 2016, Ukraine has not been able to use road or rail transit routes across the Ukraine-Russia border for all traffic in transit destined for Kazakhstan. Rather, under Russian law, such traffic may only transit from Ukraine across Russia from the Belarus‑Russia border, and is also subject to additional conditions related to identification seals and registration cards, both on entering and on leaving Russian territory, at specific control points on the Belarus‑Russia border and the Russia-Kazakhstan border respectively. As of 1 July 2016, all traffic in transit destined for the Kyrgyz Republic has been subject to the same restrictions.

b. Since 1 July 2016, traffic in transit by road and rail from Ukraine, which is destined for Kazakhstan and the Kyrgyz Republic, is not permitted to transit across Russia at all (i.e. not even via the Belarus-Russia border) for particular categories of goods. The categories of goods are: (i) those subject to customs duties greater than zero according to the Common Customs Tariff of the Eurasian Economic Union (EaEU), and (ii) goods listed in an annex to Resolution No. 778 of the Government of the Russian Federation (Resolution No. 778)15 and which originate in specific countries that have imposed economic sanctions on Russia.16 Although there is a procedure which exceptionally permits transit of these goods from Ukraine to Kazakhstan and to the Kyrgyz Republic (through a derogation procedure involving a request by the Governments of Kazakhstan or the Kyrgyz Republic and an authorization granted by Russian authorities), it is unclear how this derogation procedure operates and to date, no such derogations have been granted.

c. The transit restrictions referred to in paragraph 7.1(a) above, and the transit bans referred to in paragraph 7.1(b) above, are also applied by Russian authorities to traffic in transit by road or rail from Ukraine which is destined not only for Kazakhstan and the Kyrgyz Republic, but also for Mongolia, Tajikistan, Turkmenistan and Uzbekistan.

d. Finally, as of 30 November 2014, transit from Ukraine of goods subject to veterinary surveillance which are listed in Resolution No. 778 is not permitted through Belarus. Rather, such goods with a final destination of Kazakhstan and third countries may transit across Russia only from specific checkpoints on the Russian side of the external customs border of the EaEU and only pursuant to permits issued by the relevant veterinary surveillance authorities of the Government of Kazakhstan and pursuant to permits issued by the Russian Federal Service for Veterinary and Phytosanitary Surveillance (Rosselkhoznadzor). Transit to third countries (including Kazakhstan) of plant goods which are listed in Resolution No. 778 shall also, as of 24 November 2014, take place exclusively through the checkpoints on the Russian state border.17

7.2.
Ukraine claims that the above-referenced transit restrictions and bans are inconsistent with Russia's obligations under Article V of the GATT 1994 and related commitments in Russia's Accession Protocol. Ukraine also claims that Russia has failed to publish and administer various instruments through which these measures are implemented in the manner required by Article X of the GATT 1994 and by commitments in Russia's Accession Protocol.

7.2 RUSSIA'S RESPONSE

7.3.
Russia does not specifically address the factual evidence or legal arguments adduced by Ukraine in support of its substantive claims under the GATT 1994 and Russia's Accession Protocol. Rather, Russia argues that certain claims and measures are outside the Panel's terms of reference, on the bases that: (a) Ukraine's panel request does not comply with the requirements of Article 6.2 of the DSU, and (b) Ukraine has failed to establish the existence of one of the challenged measures.
7.4.
Principally, however, Russia asserts that the measures are among those that Russia considers necessary for the protection of its essential security interests, which it took, "[i]n response to the emergency in international relations that occurred in 2014 that presented threats to the Russian Federation's essential security interests".18 Russia invokes the provisions of Article XXI(b)(iii) of the GATT 1994, arguing that, as a result, the Panel lacks jurisdiction to further address the matter. Accordingly, Russia submits that the Panel should limit its findings in this dispute to a statement of the fact that Russia has invoked Article XXI(b)(iii), without further engaging on the substance of Ukraine's claims.19

7.3 FACTUAL BACKGROUND

7.5.
The issues that arise in this dispute must be understood in the context of the serious deterioration of relations between Ukraine and Russia that occurred following a change in government in Ukraine in February 2014. Both parties have avoided referring directly to this change in government and to the events that followed it. It is not this Panel's function to pass upon the parties' respective legal characterizations of those events, or to assign responsibility for them, as was done in other international fora. At the same time, the Panel considers it important to situate the dispute in the context of the existence of these events.
7.6.
Ukraine had, since 18 October 2011, been a party to the Treaty on a Free Trade Area between the members of the Commonwealth of Independent States (CIS-FTA)20, with Russia, Belarus, Kazakhstan, the Kyrgyz Republic, Tajikistan, Moldova and Armenia.21 On 29 May 2014, Russia, Belarus and Kazakhstan signed the Treaty on the Establishment of the Eurasian Economic Union (EaEU Treaty)22, with Armenia and the Kyrgyz Republic joining in January and August of 2015, respectively. The EaEU Treaty entered into force on 1 January 2015.23
7.7.
While it took part in the initial negotiations to establish the EaEU, Ukraine decided, following on the "Euromaidan events", not to join the EaEU Treaty. Instead, it elected to seek economic integration with the European Union.24 Accordingly, on 21 March 2014, the newly sworn-in Ukrainian Government signed the political part of the "Association Agreement between the European Union and its Member States, of the one part, and Ukraine, of the other part" (EU-Ukraine Association Agreement).25 The objectives of the EU-Ukraine Association Agreement are to facilitate Ukraine's closer political and economic integration with Europe.26 The economic part of the EU-Ukraine Association Agreement provides for a Deep and Comprehensive Free Trade Area (DCFTA) between the European Union and Ukraine.27 This part of the EU-Ukraine Association Agreement was signed on 27 June 2014.
7.8.
In March 2014, Ukraine, along with certain other countries, introduced a resolution in the General Assembly of the United Nations (UN General Assembly), which welcomed the continued efforts by the UN Secretary‑General and the Organization for Security and Cooperation in Europe, as well as other international and regional organizations, to support "de-escalation of the situation with respect to Ukraine".28 The UN General Assembly recalled "the obligations of all States under Article 2 of the Charter to refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any State, and to settle their international disputes by peaceful means".29 A subsequent UN General Assembly Resolution in December 2016 condemned the "temporary occupation of part of the territory of Ukraine", i.e. the "Autonomous Republic of Crimea and the city of Sevastopol" by the Russian Federation, and reaffirmed the non‑recognition of its "annexation".30 This resolution makes explicit reference to the Geneva Conventions of 1949, which apply in cases of declared war or other armed conflict between High Contracting Parties.31
7.9.
The events in Ukraine in 2014 were followed by the imposition of economic sanctions against Russian entities and persons by certain countries.
7.10.
On 7 August 2014, Russia imposed import bans on specified agricultural products, raw materials and food originating from countries that had imposed sanctions against it (initially, the United States, European Union Member States, Canada, Australia and Norway).32 Russia also imposed certain restrictions in connection with the transit of goods subject to these import bans, prohibiting their transit through Belarus, and permitting their transit across Russia only through designated checkpoints on the Russian side of the external border of the EaEU. These 2014 transit restrictions are among those challenged by Ukraine in this dispute.33
7.11.
In September 2014, following discussions with Russia, both the European Union and Ukraine agreed to postpone the application of the economic part of the EU-Ukraine Association Agreement until 31 December 2015.34 Also in September 2014, the Russian Government adopted Resolution No959, which provided that Ukrainian goods would be subject to tariffs at the EaEU rates as of 10 days from the date on which the Russian Government was notified of action by Ukraine to implement the economic part of the EU-Ukraine Association Agreement.35
7.12.
On 13 August 2015, the Russian Government adopted Resolution No. 842 which, among other things, amended Resolution No. 778 to add further countries to the list of countries whose exports are subject to the Resolution No. 778 import bans, including Ukraine. However, with respect to Ukraine, Resolution No. 842 provided that the import bans would be applied from the effective date of Resolution No. 959 (referred to above), but no later than 1 January 2016.36 Subsequent negotiations between the European Commission, Ukraine and Russia, aimed at achieving solutions to Russia's concerns about the DCFTA, had failed by December 2015.37 On 21 December 2015, the Russian Government adopted Resolution No. 1397, which provided that the import bans in respect of the goods listed in Resolution No. 778 would apply to goods of Ukrainian origin as of 1 January 2016.38 The European Union and Ukraine have provisionally applied the DCFTA as of 1 January 2016.39
7.13.
In response to the provisional application by the European Union and Ukraine of the economic part of the EU-Ukraine Association Agreement, the Russian State Duma passed a law on 22 December 2015, effective as of 1 January 2016, purporting to suspend the CIS-FTA with respect to Ukraine.40 The Russian State Legal Department stated that Russia's suspension of the CIS-FTA with respect to Ukraine was due to the entry into force of the economic part of the EU‑Ukraine Association Agreement "without reaching a legally binding agreement that would meet the interests of Russia" and the fact that "such an act constitutes a fundamental change of circumstances, which were essential for Russia at the conclusion of the [CIS-FTA]."41
7.14.
Russia is also alleged by Ukraine to have banned imports of various Ukrainian goods since 2013, according to a request for consultations filed by Ukraine in October 201742, in connection with the following alleged Russian measures:

a. a general ban on the importation of Ukrainian juice products, including baby food (since July 2014);

b. a ban on the importation of alcoholic beverages, beer and beer beverages produced by three Ukrainian producers (since August 2014);

c. a ban on the importation of confectionary products produced by a specific confectionary producer (since July 2013) as well as a more general ban on imports of all Ukrainian confectionary products (since September 2014); and

d. a ban on the importation of wallpaper and wall coverings produced by four Ukrainian producers (since April 2015).43

7.15.
In the same request for consultations, Ukraine also challenges what it refers to as transit bans on Ukrainian juice products and confectionary products, which are said to apply as a result of the import bans, "separately and in addition to" the transit bans at issue in this dispute, which also affect the same products.44
7.16.
Also, as of 1 January 2016, Russia:

a. imposed customs duties at the EaEU rates on imports of goods from Ukraine45;

b. included goods of Ukrainian origin within the import bans on agricultural products, raw materials and food that it had imposed since August 2014 under Resolution No. 778 in response to countries that had imposed sanctions against it46; and

c. imposed certain restrictions and bans on transit, namely: (i) restrictions on transit by road and rail from Ukraine, destined for Kazakhstan (and subsequently, for the Kyrgyz Republic), requiring that such transit from Ukraine across Russia may occur only from Belarus and subject to additional conditions related to identification seals and registration cards, both on entering and on leaving Russian territory, at specified control points on the Belarus-Russia border and the Russia-Kazakhstan border, respectively47; and (ii) "temporary" bans on transit by road and rail from Ukraine of:

i. goods which are subject to non-zero import duties according to the Common Customs Tariff of the EaEU; and

ii. goods which fall within the scope of the import bans on agricultural products, raw materials and food imposed pursuant to Resolution No. 778, which are destined for Kazakhstan or the Kyrgyz Republic.

7.17.
The 2016 transit restrictions and bans in item (c) above are among the measures that are challenged by Ukraine in this dispute.48
7.18.
Russia, for its part, has separately alleged that Ukraine has imposed economic sanctions against Russia since 2015, as is evident from the following:

a. A request for consultations filed by Russia in May 201749, which alleges that Ukraine has imposed import bans on Russian food products, spirits and beer, cigarettes, railway and tram track equipment, diesel-electric locomotives, chemicals and certain plant products, which were allegedly adopted by Ukraine on 30 December 2015.50 The consultations request also covers a number of other measures allegedly adopted by Ukraine in 2016, including: (i) restrictions on the importation or distribution of printed materials, motion pictures, TV programs and other video products originating from Russia51; (ii) the exclusion of Russian-used vehicles from an excise duty reduction on used vehicles52; (iii) a number of personal, economic, and other sanctions in respect of Russian persons (e.g. preventing movement of capital from Ukraine in respect of legal entities with Russian shareholding, blocking of assets, bans on doing business)53; and (iv) the suspension of accreditation of journalists and representatives of certain Russian mass media.54

b. Russia's contentions that Ukraine has restricted transit of banned Russian goods through designated checkpoints at the Russia-Belarus border.55

c. Russia's contentions that sanctions imposed by Ukraine in respect of Russia have expanded in 2018, with Ukraine allegedly banning the exportation of certain Ukrainian civil aviation products, among other things.56

7.19.
Russia also asserts that Ukraine suspended traffic through certain railway corridors on the Ukraine-Russia border in June 2014, and suspended traffic through certain checkpoints on the Ukraine-Russia border in May and July of 2014 and then in February 2015.57

7.4 ORDER OF ANALYSIS

7.20.
This is the first dispute in which a WTO dispute settlement panel is asked to interpret Article XXI of the GATT 1994 (or the equivalent provisions in the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement)).58
7.21.
Ukraine presents its case as an ordinary trade dispute in which Russia has imposed measures that are inconsistent with certain of its obligations under the GATT 1994 and commitments in Russia's Accession Protocol.
7.22.
Russia, on the other hand, considers that the dispute involves obvious and serious national security matters that Members have acknowledged should be kept out of the WTO, an organization which is not designed or equipped to handle such matters. Russia cautions that involving the WTO in political and security matters will upset the very delicate balance of rights and obligations under the WTO Agreements and endanger the multilateral trading system.
7.23.
Consistent with this position, Russia does not present arguments or evidence to rebut Ukraine's specific claims of inconsistency with Articles V and X of the GATT 1994, or commitments in Russia's Accession Protocol. Russia's case is confined to arguments that certain measures and claims are outside the Panel's terms of reference, and its overarching argument that the Panel lacks jurisdiction to address any of the issues in this dispute owing to Russia's invocation of Article XXI(b)(iii) of the GATT 1994.
7.24.
The novel and exceptional features of this dispute, including Russia's argument that the Panel lacks jurisdiction to evaluate the WTO-consistency of the measures, owing to Russia's invocation of Article XXI(b)(iii) of the GATT 1994, require that the Panel first determine the order of analysis that it deems most appropriate for the present dispute.59 Accordingly, the Panel considers that it must address the jurisdictional issues first before going into the merits.
7.25.
The Panel must therefore determine, first, whether it has jurisdiction to review Russia's invocation of Article XXI(b)(iii) of the GATT 1994.60 If the Panel finds that it does not, then it will be unable to make findings on Ukraine's claims of inconsistency with Articles V and X of the GATT 1994 and with commitments in Russia's Accession Protocol.
7.26.
As the Panel explains in greater detail in Section 7.5.3 below, Russia's argument that the Panel lacks jurisdiction to address the matter is based on its interpretation of Article XXI(b)(iii) of the GATT 1994, i.e. as being totally "self-judging". Consequently, in order to address Russia's jurisdictional objection, the Panel must first interpret Article XXI(b)(iii) of the GATT 1994.

7.5 RUSSIA'S INVOCATION OF ARTICLE XXI(B)(III) OF THE GATT 1994

7.5.1 Main arguments of the parties

7.27.
Russia asserts that there was an emergency in international relations that arose in 2014, evolved between 2014 and 2018, and continues to exist.61 Russia asserts that this emergency presented threats to Russia's essential security interests.62 Russia argues that, under Article XXI(b)(iii), both the determination of a Member's essential security interests and the determination of whether any action is necessary for the protection of a Member's essential security interests are at the sole discretion of the Member invoking the provision.63
7.28.
While Russia acknowledges that the Panel was established with standard terms of reference under Article 7.1 of the DSU64, it argues that the Panel nevertheless lacks jurisdiction to evaluate measures taken pursuant to Article XXI of the GATT 1994.65 In Russia's view, the explicit wording of Article XXI confers sole discretion on the Member invoking this Article to determine the necessity, form, design and structure of the measures taken pursuant to Article XXI.66 Russia considers that the issues that arise from its invocation of Article XXI(b)(iii) go beyond the scope of trade and economic relations among Members and are outside the scope of the WTO:

[T]he WTO is not in a position to determine what essential security interests of a Member are, what actions are necessary for protection of such essential security interests, disclosure of what information may be contrary to the essential security interests of a Member, what constitutes an emergency in international relations, and whether such emergency exists in a particular case.67

7.29.
Russia regards Article XXI(b) of the GATT 1994 as preserving the "right" of each Member to react to wars and other emergencies in international relations in the way that the Member itself considers necessary. Any other interpretation of Article XXI(b) would "result in interference in [the] internal and external affairs of a sovereign state".68 Accordingly, it is sufficient for a Member to state that the measures taken are actions that it considers necessary for the protection of its essential security interests, taken in time of war or other emergency in international relations. A Member's subjective assessment cannot be "doubted or re-evaluated by any other party" or judicial bodies as the measures in question are not ordinary trade measures regularly assessed by WTO panels.69
7.30.
Russia therefore submits that the Panel should limit its findings to recognizing that Russia has invoked Article XXI of the GATT 1994, "without engaging in any further exercise, given that this panel lacks jurisdiction to evaluate measures taken with a reference to Article XXI of the GATT".70
7.31.
Ukraine interprets Article XXI of the GATT 1994 as laying down an affirmative defence for measures that would otherwise be inconsistent with GATT obligations.71 Ukraine rejects the notion that Article XXI provides for an exception to the rules on jurisdiction laid down in the GATT 1994 or the DSU.72 Ukraine considers that the Panel has jurisdiction to examine and make findings and recommendations with respect to each of the provisions of the covered agreements cited by either Ukraine or Russia, in keeping with the Panel's terms of reference under Article 7 of the DSU and the general standard of review under Article 11 of the DSU.73 Ukraine also considers that, if Article XXI of the GATT 1994 were non-justiciable, it would imply that in a dispute involving a measure that is WTO-inconsistent, the invoking Member, rather than a panel, would decide the outcome of the dispute by determining that the WTO-inconsistent measure is nonetheless justified. In Ukraine's view, such unilateral determination by an invoking Member would be contrary to Article 23.1 of the DSU.74
7.32.
Ukraine argues that Russia, by merely referring to an emergency in international relations that occurred in 2014, fails to discharge its burden to show the legal and factual elements of a defence under Article XXI(b)(iii) of the GATT 1994, namely, that there was a serious disruption in international relations constituting an emergency that is alike a war that is sufficiently connected to Russia so as to result in a genuine and sufficiently serious threat to its essential security interests and therefore to justify each and every measure at issue as being necessary to protect those interests.75 Ukraine also argues that Russia's allegation that the basis for the measures and the original circumstances leading to their imposition were publicly available and known to Ukraine is of no consequence in determining whether Russia has satisfied its burden of proof.76 Ukraine submits that the facts before the Panel show that Decree No. 1 was adopted due to the entry into force of the economic part of the EU-Ukraine Association Agreement, and that the text of the instruments implementing the 2014 measures shows that these were taken "[i]n view of detection of gross violations during the transit of such goods through the territory of the Republic of Belarus".77 Finally, Ukraine argues that the determination of whether the action was taken in time of war or other emergency in international relations under subparagraph (iii) of Article XXI(b) is to be objectively made by the Panel.78
7.33.
Ukraine argues that, although the text of Article XXI(b) expressly states that it is for the invoking Member to decide what action it considers necessary for the protection of its essential security interests, this does not mean that the Member enjoys "total discretion".79 Had the standard been "total discretion", there would have been no reason to include separate paragraphs in Article XXI and to distinguish between different types of security interests that may be invoked in order to justify a measure that is otherwise inconsistent with the GATT 1994.80 Furthermore, a panel's objective assessment must include an examination of whether a Member invoking Article XXI has done so in good faith, notwithstanding the absence of an introductory paragraph similar to the chapeau to Article XX.81
7.34.
As to the standard of review under Article XXI(b)(iii), Ukraine argues that a panel's objective assessment must include an examination of whether the invoking Member has applied Article XXI in good faith and therefore has not abused the invocation "to pursue protectionist objectives or to apply a disguised restriction on trade".82 Ukraine argues that, based on the ordinary meaning of the text of Article XXI(b) and similar to the analysis under the subparagraphs of Article XX, justification under Article XXI also requires that there be a rational relationship between the action and the protection of the essential security interest at issue.83 This analysis involves a consideration of the structure, content and design of the challenged measures. The phrase "for the protection of its essential security interests" should be interpreted in the light of the case law on Article XX of the GATT 1994 (in particular, regarding Article XX(a) on the protection of public morals) to mean that "all WTO Members have the right to determine their own level of protection of essential security interests", from which it would follow that a panel must not second-guess that level of protection.84 However, it is for panels rather than for Members to interpret the phrases "for the protection of its essential security interests" and "which it considers necessary" in accordance with customary rules of interpretation of public international law.85 In light of those interpretations, a panel must then establish: (i) whether the interests or reasons advanced by a defendant in connection with the measures at issue can reasonably be considered as falling within the meaning of the phrase "its essential security interests" and (ii) whether the measures at issue are directed at safeguarding the defendant's security interests, meaning that there is a rational relationship between the action taken and the protection of the essential security interest at issue.86 If a panel finds that the Member's measure is taken "for the protection of its essential security interests", a panel would then review whether, based on the facts available, the defendant "could reasonably arrive at the conclusion that the measures taken are necessary for protecting its essential security interests".87

7.5.2 Main arguments of the third parties

7.35.
Australia argues that Article 7 of the DSU vests the Panel with jurisdiction to examine and make findings with respect to each of the relevant provisions in the covered agreements that Ukraine and Russia have cited.88 Russia's invocation of Article XXI(b)(iii) of the GATT 1994, which Australia considers to be an exception to Members' obligations under the GATT 1994, places the provision squarely within the Panel's jurisdiction.89
7.36.
Australia regards the language "which it considers necessary" in the first part of Article XXI(b) to indicate that it is for a Member to determine both its essential security interests and the actions it considers necessary for their protection. However, this deference to the determinations of a Member does not preclude a panel from undertaking any review of a Member's invocation of Article XXI(b).90 Rather, in reviewing the "necessity" of an action under Article XXI(b), a panel is limited to determining whether the Member in fact considers the action necessary, for example, by reference to the Member's statements and conduct. Australia considers that although the nature and scope of review of the "necessity" aspect is limited, a panel does have a broader role in determining whether that (necessary) action was taken "for the protection of"a Member's essential security interests. In Australia's view, to arrive at such a determination, a panel should examine if there is a "sufficient nexus" between the action taken and the Member's essential security interests.91
7.37.
Brazil argues that, by invoking Article XXI, Russia did the opposite of excluding the Panel's jurisdiction: it obliged the Panel to examine the provision by bringing it into the "matter" at hand.92 Moreover, an exclusion of jurisdiction would deprive the complainant of its right to a decision and would be contrary to Article 3.3 of the DSU.93 Brazil considers Article XXI to be an affirmative defence. Brazil interprets Article XXI(b) as containing both a "subjective" component, i.ea judgment regarding the necessity of a measure, and an "objective component", which relates to the presence of at least one of the circumstances listed in subparagraphs (i) through (iii).94 Although the language "which it considers" in the first part of Article XXI(b) confers a great deal of discretion on the Member regarding the necessity of the measure, a panel must nevertheless review the Member's motivation for invoking Article XXI(b)(iii) to ensure that there is some connection between the measure and the state of war or other emergency in international relations, and whether there is a "plausible link" between the measure and the purpose stated in the Member's motivation for imposing the measure.95
7.38.
Brazil considers that, unlike the determination of whether an action relates to fissionable materials, traffic in arms, or war, in subparagraphs (i), (ii) and (iii) of Article XXI(b), the question of what constitutes an emergency in international relations is "quite subjective and quite difficult to discern without entering into a discussion on what constitutes a Member's national security interest".96 Nevertheless, Brazil considers that the invoking Member bears the burden of adducing evidence that the challenged measures constitute action taken in time of war or other emergency in international relations.97 An invoking Member must also demonstrate some degree of connection between the measure and the state of war or other emergency in international relations, and whether there is a plausible link between the measure that the Member wishes to justify and the purpose stated in its motivation.98
7.39.
Canada argues that if Article XXI of the GATT 1994 is invoked by a Member in a dispute, then its applicability is justiciable unless consideration of the Article has been excluded from a panel's terms of reference.99 Canada further observes that the DSU provides that panels do not have the discretion to decline to exercise the jurisdiction conferred on them by their terms of reference, nor do they have the discretion not to discharge the obligations imposed on them by Article 11 of the DSU.100 While Canada considers that Article XXI is an exception which can be invoked by a Member to justify measures that would otherwise not be consistent with its WTO obligations, it also regards Article XXI as "structurally and textually different from Article XX".101 It therefore cautions against importing tests developed in the jurisprudence to interpret provisions such as Article XX.102
7.40.
Canada interprets Article XXI(b)(iii) as providing for a "subjective" standard, according to which the invoking Member determines the interests, actions and necessity of actions, as well as the satisfaction of the conditions in subparagraph (iii).103 While Canada considers the subjective standard and the particularly sensitive nature of the subject matter of Article XXI to mean that an invoking Member must be accorded a "high level of deference" by a panel, it also considers that an invoking Member must substantiate (albeit at a low standard) its good faith belief that the elements for its invocation of Article XXI(b)(iii) exist.104
7.41.
China argues that the Panel has jurisdiction to review Russia's invocation of Article XXI of the GATT 1994 on the basis of the Panel's standard terms of reference and Articles 7.1 and 7.2 of the DSU.105 China considers that Russia has invoked Article XXI as a defence to Ukraine's claims of inconsistency.106 China urges the Panel to exercise extreme caution in its assessment of Russia's invocation of Article XXI(b)(iii), in order to maintain the delicate balance between preventing abuse of Article XXI and evasion of WTO obligations, on the one hand, and not prejudicing a Member's right to protect its essential security interests, including a Member's "sole discretion" regarding its own security interests, on the other hand.107 China refers to the principle of good faith embodied in Article 26 of the Vienna Convention on the Law of Treaties and argues that Members invoking Article XXI(b) should adhere to the principle of good faith.108
7.42.
The European Union argues that Article XXI of the GATT 1994 does not provide for an exception to the rules on jurisdiction laid down in the DSU or to the special rules on consultations and dispute settlement contained in Articles XXII and XXIII of the GATT 1994.109
7.43.
Given the absence in Article XXI of an equivalent to the chapeau in Article XX, the analysis of Article XXI should consider whether a measure addresses the particular interest specified, and that there is a sufficient nexus between the measure and the interest protected.110 The European Union argues that the terms "which it considers" in the first part of Article XXI(b) qualify only the term "necessary". Therefore, the existence of a war or other emergency in international relations in subparagraph (iii) should be interpreted to refer to objective factual circumstances which can be fully reviewed by panels.111 While "essential security interests" should be interpreted so as to allow Members to identify their own security interests and their desired level of protection, a panel should, on the basis of the reasons provided by the invoking Member, review whether the interests at stake can "reasonably" or "plausibly" be considered essential security interests.112 A panel must also review whether the action is "capable" of protecting a security interest from a threat. The European Union considers that the terms "which it considers" imply that "in principle" each Member may determine for itself whether a measure is "necessary" for the protection of its essential security interests.113 A panel should nevertheless review this determination, albeit with due deference, to assess whether the invoking Member can plausibly consider the measure necessary and whether the measure is "applied" in good faith. This requires the invoking Member to provide the panel with an explanation as to why it considered the measure necessary.114 Finally, the European Union argues that, when assessing the necessity of the measure and the existence of reasonably available alternatives, a panel should ascertain whether the interests of third parties which may be affected were properly taken into account.115
7.44.
Japan argues that consideration of Russia's invocation of Article XXI of the GATT 1994 is within the Panel's terms of reference.116 However, Japan also considers that Article XXI of the GATT 1994 is an "extraordinary provision" in that it recognizes the vital importance of Members' essential security interests, and the fundamental nature of their sovereign right to pursue such vital interests. This is reflected in the "deferential language" used in the provision. This being so, it may impose an "undue burden" on the WTO dispute settlement system to require panels to review a Member's invocation of Article XXI. Japan therefore urges the parties to make every effort to seek a mutually acceptable solution "in order to maintain the effective functioning of the WTO".117
7.45.
Japan also notes the critical importance of national security interests to Members' fundamental sovereignty and the risk of the Panel adopting any interpretation that could impair a Member's ability to decide on the need to adopt measures necessary to protect its national security.118 Japan therefore urges the Panel to "grant appropriate deference to the Members' judgement as to the necessity of taking actions to protect their essential security interests".119 At the same time, Japan acknowledges that subparagraph (b)(iii) carefully circumscribes the situations that would allow Members to invoke a defence based on each Member's essential security interests. In addition, in Japan's view, considering the object and purpose of the GATT 1994 and the preparatory work for the ITO Charter, the discretion accorded to Members in deciding upon the actions that are necessary to protect their essential security interests is "not unbounded and must be exercised with extreme caution".120
7.46.
Moldova disagrees with Russia's argument that the mere invocation of Article XXI(b)(iii) prevents WTO panels from reviewing trade issues that would otherwise be WTO-inconsistent.121 Moldova therefore considers that, while Members have the right to define for themselves their essential security interests, and declare the necessity of protecting those interests, WTO panels have the right to review whether such Members apply WTO-inconsistent measures in good faith and in accordance with the requirements of Article XXI.122
7.47.
Moldova considers that the Panel needs to assess whether the invoking Member "genuinely believes" that the measure taken is necessary to protect such Member's essential security interests. Moldova argues that the jurisprudence concerning the "necessity" of a measure sought to be justified under Articles XX(a), (b) or (d) of the GATT 1994 could be relevant to a panel's assessment of the necessity of action under Article XXI(b). Accordingly, Moldova argues that a panel assessing whether an action is "necessary" for purposes of Article XXI(b) should undertake a "weighing and balancing exercise", which considers the importance of the essential security interests or values at stake, the extent of the contribution to the achievement of the measure's objective, and its trade restrictiveness, complemented by an analysis of whether the measure is "apt to make a material contribution to the achievement of its objective".123 Such an exercise should also include a determination of whether a WTO-consistent alternative measure is reasonably available to the invoking Member.124 A panel should also determine if the measures at issue protect "essential security interests", which must meet a higher standard than, and can be distinguished from, "non‑essential security interests".125 Moldova considers that the invoking Member should demonstrate to a panel that "in addition to establishing the objective prerequisites in Article XXI(b)[] regarding the existence of an essential security interest", the measure does not "intentionally serve protectionist purposes".126
7.48.
Singapore argues that the Panel has jurisdiction to consider Russia's invocation of Article XXI, on the basis of the Panel's standard terms of reference and Articles 7.1 and 7.2 of the DSU.127 Singapore considers that the language "it considers necessary" in the first part of Article XXI(b) indicates that the invoking Member is allowed to determine "with a significant degree of subjectivity" what action it considers necessary to protect its essential security interests.128 Singapore contrasts this "self-judging" aspect of Article XXI(b) with the text of Article XX.129 Singapore argues that the "key" phrase "it considers necessary" in the first part of Article XXI(b) has been deliberately drafted to give a Member wide latitude to determine both the action necessary for the protection of its essential security interests (including the nature, scope and duration of the measure) and the necessity of the measure.130 Singapore argues that a "significant margin of appreciation" should be accorded to a Member's assessments of its chosen level of protection and risk, as well as the necessity of a measure taken for the protection of its essential security interests.131
7.49.
On the other hand, Singapore considers that Members should exercise their discretion under Article XXI(b) in accordance with the principle of good faith and the doctrine of abuse of rights. Thus, a Member must, in good faith—albeit subjectively—consider that there is a threat to its essential security interest and that its chosen action is necessary for the protection of that essential security interest.132 Singapore also argues that the determination of the existence of an "emergency in international relations" under subparagraph (iii) of Article XXI(b) is "inherently subjective", with the sensitivities implicated in a Member's assessment of its security threats being equally applicable to a determination of whether an "emergency in international relations" exists.133 Singapore submits that, even if the Panel were to conduct a "more intrusive" review of a Member's invocation of Article XXI(b), it should be limited to an examination of whether the disputed measure was implemented in a "non-capricious manner", rather than conducting an examination that "approximates an objective substantive review".134
7.50.
Turkey argues that the text of Article XXI(b), especially the clause "which it considers necessary" means that "to a very large extent", it is left to the judgment of the invoking Member to determine which measures it considers necessary for the protection of its essential security interests. However, while the language of Article XXI leaves the determination of whether action is necessary for the protection of essential security interests to the Member taking the action, this discretion is not unqualified. Turkey regards the term "essential", which qualifies "security interests", to indicate an intention to draw a boundary to prevent abuses of power such as sheltering commercial measures behind the security exception.135 Suggesting that the Panel should be guided by the general exception rules of the GATT 1994, Turkey considers that a complaining Member should make its prima facie case of inconsistency, and then the responding Member should put forward, inter alia, its argument that the measure can be justified under Article XXI. A panel, when reviewing the responding Member's invocation of Article XXI, should consider the "large margin of discretion" accorded to the invoking Member.136
7.51.
The United States, in a letter to the Chair of the Panel submitted on the due date for third‑party submissions, argues that the Panel "lacks the authority to review the invocation of Article XXI and to make findings on the claims raised in this dispute".137 The reason advanced is that every WTO Member retains the authority to determine for itself those matters that it considers necessary for the protection of its essential security interests, as "reflected" in the text of Article XXI of the GATT 1994.138 The United States describes this as an "inherent right" that has been repeatedly recognized by GATT contracting parties and WTO Members.139
7.52.
In its subsequent submissions, the United States clarifies that it considers the Panel to have jurisdiction in the context of this dispute "in the sense that the DSB established it, and placed the matter raised in Ukraine's complaint within the Panel's terms of reference under Article 7.1 of the DSU".140 However, it considers that the dispute is "non-justiciable" because there are no legal criteria by which the issue of a Member's consideration of its essential security interests can be judged.141 The United States bases its position on its interpretation of the text of Article XXI, specifically, the "self-judging" language of the chapeau in Article XXI(b) "which it considers necessary for the protection of its essential security interests".142 For the United States, the "self-judging" nature of Article XXI(b)(iii) establishes that its invocation by a Member is "non-justiciable", and "is therefore not capable of findings by a panel", obviating the possibility of making recommendations under Article 19.1 of the DSU in this dispute.143

7.5.3 Whether the Panel has jurisdiction to review Russia's invocation of Article XXI(b)(iii) of the GATT 1994

7.53.
The Panel recalls that international adjudicative tribunals, including WTO dispute settlement panels, possess inherent jurisdiction which derives from the exercise of their adjudicative function.144 One aspect of this inherent jurisdiction is the power to determine all matters arising in relation to the exercise of their own substantive jurisdiction.145
7.54.
Article 1.1 of the DSU provides that the rules and procedures of the DSU shall apply to disputes brought pursuant to the consultation and dispute settlement provisions of the agreements listed in Appendix 1 (the covered agreements). The covered agreements include, inter alia, the Multilateral Agreements on Trade in Goods, including the GATT 1994, more particularly Articles XXII and XXIII, as elaborated and applied by the DSU. Article 1.2 of the DSU provides that the rules and procedures of the DSU shall apply subject to such special or additional rules on dispute settlement contained in the covered agreements as are identified in Appendix 2 to the DSU. Appendix 2 of the DSU does not refer to any special or additional rules of procedure applying to disputes in which Article XXI of the GATT 1994 is invoked.
7.55.
The Panel recalls that Ukraine requested the DSB to establish a panel pursuant to the provisions of the DSU and Article XXIII of the GATT 1994. On 21 March 2017, the DSB established the Panel in accordance with Article 6 of the DSU, with standard terms of reference as provided in Article 7.1 of the DSU. Article 7.2 of the DSU requires that the Panel address the relevant provisions in any covered agreements cited by the parties to the dispute.146
7.56.
Given the absence in the DSU of any special or additional rules of procedure applying to disputes involving Article XXI of the GATT 1994, Russia's invocation of Article XXI(b)(iii) is within the Panel's terms of reference for the purposes of the DSU.
7.57.
Russia argues, however, that the Panel lacks jurisdiction to review Russia's invocation of Article XXI(b)(iii). For Russia, the invocation of Article XXI(b)(iii) by a Member renders its actions immune from scrutiny by a WTO dispute settlement panel. Russia's argument is based on its interpretation of Article XXI(b)(iii) as "self-judging".147 According to this argument, Article XXI(b)(iii) carves out from a panel's jurisdiction ratione materiae actions that a Member considers necessary for the protection of its essential security interests taken in time of war or other emergency in international relations. Russia's jurisdictional plea is that, based on its interpretation of Article XXI(b)(iii), it has met the conditions for invoking the provision.
7.58.
As previously noted, the Panel's evaluation of Russia's jurisdictional plea requires it, in the first place, to interpret Article XXI(b)(iii) of the GATT 1994 in order to determine whether, by virtue of the language of this provision, the power to decide whether the requirements for the application of the provision are met is vested exclusively in the Member invoking the provision, or whether the Panel retains the power to review such a decision concerning any of these requirements.

7.5.3.1 Meaning of Article XXI(b)(iii) of the GATT 1994

7.59.
The Panel begins by recalling that Article 3.2 of the DSU recognizes that interpretive issues arising in WTO dispute settlement are to be resolved through the application of customary rules of interpretation of public international law. It is well established—including in previous WTO disputes —that these rules cover those codified in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (Vienna Convention). Article 31(1) provides:

A treaty shall be interpreted in good faith in accordance 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.

7.60.
Article XXI(b)(iii) of the GATT 1994 is part of the "Security Exceptions" set forth in Article XXI, which provides:

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; or

(b) to prevent any contracting party from taking any actionwhich it considersnecessary 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.

7.61.
The introduction to Article XXI states that "[n]othing in this Agreement shall be construed" followed by three paragraphs that are separated by the conjunction "or". Paragraph (a) of Article XXI describes action that may not be required of a Member, and paragraphs (b) and (c) describe action which a Member may not be prevented from taking, notwithstanding that Member's obligations under the GATT 1994.

7.5.3.1.1 Whether the clause in the chapeau of Article XXI(b) qualifies the determination of the matters in the enumerated subparagraphs of that provision

7.62.
Paragraph (b) of Article XXI includes an introductory part (chapeau), which qualifies action that a Member may not be prevented from taking as that "which [the Member] considers necessary for the protection of its essential security interests".
7.63.
The text of the chapeau of Article XXI(b) can be read in different ways and can thus accommodate more than one interpretation of the adjectival clause "which it considers". The adjectival clause can be read to qualify only the word "necessary", i.e. the necessity of the measures for the protection of "its essential security interests"; or to qualify also the determination of these "essential security interests"; or finally and maximally, to qualify the determination of the matters described in the three subparagraphs of Article XXI(b) as well.
7.64.
The Panel starts by testing this last, most extensive hypothesis, i.e. whether the adjectival clause "which it considers" in the chapeau of Article XXI(b) qualifies the determination of the sets of circumstances described in the enumerated subparagraphs of Article XXI(b). The Panel will leave for the moment the examination of the two other interpretive hypotheses, which bear exclusively on the chapeau.148
7.65.
As mentioned above, the mere meaning of the words and the grammatical construction of the provision can accommodate an interpretation in which the adjectival clause "which it considers" qualifies the determinations in the three enumerated subparagraphs. But if one considers the logical structure of the provision, it is apparent that the three sets of circumstances under subparagraphs (i) to (iii) of Article XXI(b) operate as limitative qualifying clauses; in other words, they qualify and limit the exercise of the discretion accorded to Members under the chapeau to these circumstances. Does it stand to reason, given their limitative function, to leave their determination exclusively to the discretion of the invoking Member? And what would be the use, or effetutile, and added value of these limitative qualifying clauses in the enumerated subparagraphs of Article XXI(b), under such an interpretation?
7.66.
A similar logical query is whether the subject-matter of each of the enumerated subparagraphs of Article XXI(b) lends itself to purely subjective discretionary determination. In answering this last question, the Panel will focus on the last set of circumstances, envisaged in subparagraph (iii), to determine whether, given their nature, the evaluation of these circumstances can be left wholly to the discretion of the Member invoking the provision, or is designed to be conducted objectively, by a dispute settlement panel.
7.67.
As previously noted, the words of the chapeau of Article XXI(b) are followed by the three enumerated subparagraphs, which are relative clauses qualifying the sentence in the chapeau, separated from each other by semicolons. They provide that the action referred to in the chapeau must be:

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".

7.68.
Given that these subject matters—i.e. the "fissionable materials …", "traffic in arms …", and situations of "war or other emergency in international relations" described in the enumerated subparagraphs—are substantially different, it is obvious that these subparagraphs establish alternative (rather than cumulative) requirements that the action in question must meet in order to fall within the ambit of Article XXI(b).
7.69.
The connection between the action and the materials or the traffic described in subparagraphs (i) and (ii) is specified by the phrase "relating to". The phrase "relating to", as used in Article XX(g) of the GATT 1994, has been interpreted by the Appellate Body to require a "close and genuine relationship of ends and means" between the measure and the objective of the Member adopting the measure.149 This is an objective relationship between the ends and the means, subject to objective determination.
7.70.
The phrase "taken in time of" in subparagraph (iii) describes the connection between the action and the events of war or other emergency in international relations in that subparagraph. The Panel understands this phrase to require that the action be taken during the war or other emergency in international relations. This chronological concurrence is also an objective fact, amenable to objective determination.
7.71.
Moreover, as for the circumstances referred to in subparagraph (iii), the existence of a war, as one characteristic example of a larger category of "emergency in international relations", is clearly capable of objective determination. Although the confines of an "emergency in international relations" are less clear than those of the matters addressed in subparagraphs (i) and (ii), and of "war" under subparagraph (iii), it is clear that an "emergency in international relations" can only be understood, in the context of the other matters addressed in the subparagraphs, as belonging to the same category of objective facts that are amenable to objective determination.
7.72.
The use of the conjunction "or" with the adjective "other" in "war or other emergency in international relations" in subparagraph (iii) indicates that war is one example of the larger category of "emergency in international relations". War refers to armed conflict. Armed conflict may occur between states (international armed conflict), or between governmental forces and private armed groups, or between such groups within the same state (non-international armed conflict). The dictionary definition of "emergency" includes a "situation, esp. of danger or conflict, that arises unexpectedly and requires urgent action", and a "pressing need … a condition or danger or disaster throughout a region".150
7.73.
"International relations" is defined generally to mean "world politics", or "global political interaction, primarily among sovereign states".151
7.74.
The Panel also takes into account, as context for the interpretation of an "emergency in international relations" in subparagraph (iii), the matters addressed by subparagraphs (i) and (ii) of Article XXI(b), which cover fissionable materials, and traffic in arms, ammunition and implements of war, as well as traffic in goods and materials for the purpose of supplying a military establishment. While the enumerated subparagraphs of Article XXI(b) establish alternative requirements, the matters addressed by those subparagraphs give rise to similar or convergent concerns, which can be formulated in terms of the specific security interests that arise from the matters addressed in each of them. Those interests, like the interests that arise from a situation of war in subparagraph (iii) itself, are all defence and military interests, as well as maintenance of law and public order interests. An "emergency in international relations" must be understood as eliciting the same type of interests as those arising from the other matters addressed in the enumerated subparagraphs of Article XXI(b).
7.75.
Moreover, the reference to "war" in conjunction with "or other emergency in international relations" in subparagraph (iii), and the interests that generally arise during war, and from the matters addressed in subparagraphs (i) and (ii), suggest that political or economic differences between Members are not sufficient, of themselves, to constitute an emergency in international relations for purposes of subparagraph (iii). Indeed, it is normal to expect that Members will, from time to time, encounter political or economic conflicts with other Members or states. While such conflicts could sometimes be considered urgent or serious in a political sense, they will not be "emergencies in international relations" within the meaning of subparagraph (iii) unless they give rise to defence and military interests, or maintenance of law and public order interests.
7.76.
An emergency in international relations would, therefore, appear to refer generally to 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.152 Such situations give rise to particular types of interests for the Member in question, i.e. defence or military interests, or maintenance of law and public order interests.153
7.77.
Therefore, as the existence of an emergency in international relations is an objective state of affairs, the determination of whether the action was "taken in time of" an "emergency in international relations" under subparagraph (iii) of Article XXI(b) is that of an objective fact, subject to objective determination.
7.78.
As a next step, the Panel considers whether the object and purpose of the GATT 1994 and the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) also supports an interpretation of Article XXI(b)(iii) which mandates an objective review of the requirements of subparagraph (iii).
7.79.
Previous panels and the Appellate Body have stated that a general object and purpose of the WTO Agreement, as well as of the GATT 1994, is to promote the security and predictability of the reciprocal and mutually advantageous arrangements and the substantial reduction of tariffs and other barriers to trade.154 At the same time, the GATT 1994 and the WTO Agreements provide that, in specific circumstances, Members may depart from their GATT and WTO obligations in order to protect other non-trade interests. For example, the general exceptions under Article XX of the GATT 1994 accord to Members a degree of autonomy to adopt measures that are otherwise incompatible with their WTO obligations, in order to achieve particular non-trade legitimate objectives, provided such measures are not used merely as an excuse to circumvent their GATT and WTO obligations. These concessions, like other exceptions and escape clauses built into the GATT 1994 and the WTO Agreements, permit Members a degree of flexibility that was considered necessary to ensure the widest possible acceptance of the GATT 1994 and the WTO Agreements. It would be entirely contrary to the security and predictability of the multilateral trading system established by the GATT 1994 and the WTO Agreements, including the concessions that allow for departures from obligations in specific circumstances, to interpret Article XXI as an outright potestative condition, subjecting the existence of a Member's GATT and WTO obligations to a mere expression of the unilateral will of that Member.
7.80.
In the Appendix to this Report, the Panel surveys the pronouncements of the GATT contracting parties and WTO Members to determine whether the conduct of the GATT contracting parties and the WTO Members regarding the application of Article XXI reveals a common understanding of the parties as to the meaning of this provision. The Panel's survey reveals differences in positions and the absence of a common understanding regarding the meaning of Article XXI. In the Panel's view, this record does not reveal any subsequent practice establishing an agreement between the Members regarding the interpretation of Article XXI in the sense of Article 31(3)(b) of the Vienna Convention.155
7.81.
It is notable, however, that a significant majority of occasions on which Article XXI(b)(iii) was invoked concerned situations of armed conflict and acute international crisis, where heightened tensions could lead to armed conflict, rather than protectionism under the guise of a security issue. It therefore appears that Members have generally exercised restraint in their invocations of Article XXI(b)(iii), and have endeavoured to separate military and serious security-related conflicts from economic and trade disputes. The Panel does not assign any legal significance to this observation, but merely notes that the conduct of Members attests to the type of circumstance which has historically warranted the invocation of Article XXI(b)(iii).
7.82.
In sum, the Panel considers that the ordinary meaning of Article XXI(b)(iii), in its context and in light of the object and purpose of the GATT 1994 and the WTO Agreement more generally, is that the adjectival clause "which it considers" in the chapeau of Article XXI(b) does not qualify the determination of the circumstances in subparagraph (iii). Rather, for action to fall within the scope of Article XXI(b), it must objectively be found to meet the requirements in one of the enumerated subparagraphs of that provision.156

7.5.3.1.2 Negotiating history of Article XXI of the GATT 1947

7.83.
This conclusion that the Panel has reached based on its textual and contextual interpretation of Article XXI(b)(iii), in the light of the object and purpose of the GATT 1994 and WTO Agreement, is confirmed by the negotiating history of Article XXI of the GATT 1947.157
7.84.
The Panel recalls that the GATT 1947 arose out of a proposal by the United States to establish an International Trade Organization (ITO), an organization through which the United States and other countries would harmonize policies in respect of international trade and employment.158 The text of the ITO Charter was negotiated over four sessions between October 1946 and March 1948. Towards the end of the first negotiating session (held in London between October and November 1946), the Preparatory Committee decided to give prior effect to the tariff provisions of the ITO Charter by means of a general tariff agreement which would provisionally apply among a subset of ITO members until the ITO Charter entered into force.159 The provisions of the general tariff agreement were to be taken from the provisions of the ITO Charter then being negotiated.160 The texts of the ITO Charter and of the general tariff agreement were negotiated in parallel through the second negotiating session (held in New York between January and February 1947) and the third negotiating session (held in Geneva between April and October 1947).
7.85.
The United States originally proposed, in a draft submitted to the Preparatory Committee in September 1946, the inclusion of a single general exceptions clause that would apply to the General Commercial Policy chapter of the ITO Charter.161 The clause began with "[n]othing in Chapter IV of this Charter shall be construed to prevent the adoption or enforcement by any Member of measures" followed by paragraphs that included a number of the general exceptions later appearing in Article XX of the GATT 1947, as well as others later reflected in Article XXI of the GATT 1947 (specifically paragraphs (c), (d), (e), and (k)).162
7.86.
The draft of the ITO Charter prepared at the New York negotiating session in February 1947 (the New York Draft) similarly contained a single general exceptions clause in the chapter on General Commercial Policy.163 Article 37 of the New York Draft provided that:

Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in Chapter V shall be construed to prevent the adoption or enforcement by any Member of measures:

(a) Necessary to protect public morals;

(b) For the purpose of protecting human, animal or plant life or health, if corresponding domestic safeguards under similar conditions exist in the importing country;

(c) Relating to fissionable materials;

(d) Relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on for the purpose of supplying a military establishment;

(e) In time of war or other emergency in international relations, relating to the protection of the essential security interests of a Member;

(k) Undertaken in pursuance of obligations under the United Nations Charter for the maintenance or restoration of international peace and security.164

7.87.
The separation of these exceptions into two distinct clauses was first suggested during the third negotiating session in Geneva. In May 1947, the United States proposed that the security exceptions that appeared in the clause be moved to the end of the ITO Charter so that they would be general exceptions to the whole Charter and not just the chapter on General Commercial Policy.165 The United States also proposed that this new provision contain the introductory language "[n]othing in this Charter shall be construed to prevent the adoption or enforcement by any Member of measures", which would then be followed by the list of paragraphs transferred from Article 37.166
7.88.
The specific language for the new security exceptions that would apply throughout the whole of the Charter was developed from a proposal submitted by the United States delegation at the Geneva negotiating session in July 1947.167
7.89.
According to Vandevelde's study of the internal documents of the United States delegation negotiating the ITO Charter, the US delegation arrived at the language of this proposal after deliberating as to whether an ITO member should effectively be able to avoid any Charter obligation by the unilateral invocation of its essential security interests, or whether any element of the security exceptions should be subject to review by the Organization.168 The members of the delegation were divided between those who wanted to preserve the United States' freedom of action in relation to its security interests by providing that each ITO member would have independent power to interpret the language of the exception169, and those who believed that such a means for unilateral action would be abused by some countries and destroy the efficacy of the entire Charter.170 At issue was whether the proposed draft should provide that nothing in the Charter would preclude any action "which [a member] may consider to be necessary and to relate to" the various enumerated topics, such as fissionable materials, traffic in arms or an emergency in international relations, or whether the original language from Article 37 of the New York Draft, which used the phrase "relating to" should be retained.171
7.90.
Those favouring the position that some elements of the security exceptions should be subject to review by the Organization considered that the risk of abuse by some countries outweighed concerns regarding the scope of action left to the United States by the Charter.172 One delegate advocating this position stated that "it would be far better to abandon all work on the Charter" than to place a provision in it that would, "under the simple pretext that the action was taken to protect the national security of the particular country, provide a legal escape from compliance with the provisions of the Charter".173
7.91.
After a vote, those favouring the above position prevailed.174 Their position, that the scope of unilateral action accorded to a Member invoking the security exceptions would be limited to the necessity of the measure and would not extend to the determination of the other elements of the provision, was reflected in the United States' proposal of 4 July 1947. The proposed Article 94 of the ITO Charter provided that:

Nothing in this Charter shall be construed to require any Member to furnish any information the disclosure of which it considers contrary to its essential security interests, or to prevent any Member from taking any action which it may consider to be necessary to such interests:

a) Relating to fissionable materials or their source materials;

b) Relating to the traffic in arms, ammunition and implements of war and to such traffic in other goods and materials as is carried on for the purpose of supplying a military establishment;

c) In time of war or other emergency in international relations, relating to the protection of its essential security interests;

d) Undertaken in pursuance of obligations under the United Nations Charter for the maintenance of international peace and security.175

7.92.
The United States delegation's interpretation of its proposal for the security exception is reflected in discussions of the provision during the Geneva negotiating session on 24 July 1947. In response to a question from the delegate for the Netherlands as to the meaning of the term "essential security interests" and "emergency in international relations"176, the delegate for the United States replied:

I suppose I ought to try and answer that, because I think the provision [subparagraph (e) of Article 37 of the New York Draft] goes back to the original draft put forward by us and has not been changed since.

We gave a good deal of thought to the question of the security exception which we thought should be included in the Charter. We recognized that there was a great danger of having too wide an exception and we could not put it into the Charter, simply by saying: "by any Member of measures relating to a Member's security interests" because, that would permit anything under the sun. Therefore we thought it well to draft provisions which would take care of real essential security interests and, at the same time, so far as we could, to limit the exception so as to prevent the adoption of protection for maintaining industries under every conceivable circumstance.

With regard to subparagraph (e), the limitation, I think, is primarily in the time. First, "in time of war". I think no one would question the need of a Member, or the right of a Member, to take action relating to its security interests in time of war and to determine for itself—which I think we cannot deny—what its security interests are.

As to the second provision, "or other emergency in international relations," we had in mind particularly the situation which existed before the last war, before our own participation in the last war, which was not until the end of 1941. War had been going on for two years in Europe and, as the time of our own participation approached, we were required, for our own protection, to take many measures which would have been prohibited by the Charter. Our exports and imports were under rigid control. They were under rigid control because of the war then going on.177

7.93.
Ultimately, the delegate for the United States emphasized the importance of the draft security exceptions, which would allow ITO members to take measures for security reasons, but not as disguised restrictions on international trade:

I think there must be some latitude here for security measures. It is really a question of a balance. We have got to have some exceptions. We cannot make it too tight, because we cannot prohibit measures which are needed purely for security reasons. On the other hand, we cannot make it so broad that, under the guise of security, countries will put on measures which really have a commercial purpose.

We have given considerable thought to it and this is the best we could produce to preserve that proper balance.178

7.94.
During that same discussion, the delegate for Australia questioned the possible effect of moving the security exceptions to the end of the Charter, away from the provisions providing for consultations and dispute settlement. In particular, the delegate questioned whether this would mean that the security exceptions would not be subject to consultations and dispute settlement. The delegate for the United States responded as follows:

… I think that the place of an Article in the Charter has nothing to do with whether or not it comes under Article 35 [predecessor to Articles XXII and XXIII of the GATT 1947]. Article 35 is very broad in its terms, and I think probably covers any action by any Member under any provision of the Charter. It is true that an action taken by a Member under Article 94 could not be challenged in the sense that it could not be claimed that the Member was violating the Charter; but if that action, even though not in conflict with the terms of Article 94, should affect another Member, I should think that that Member would have the right to seek redress of some kind under Article 35 as it now stands. In other words, there is no exception from the application of Article 35 to this or any other Article.179

7.95.
The delegate for Australia stated that it should be clear that the terms of the proposed Article 94 would be subject to the provisions of paragraph 2 of Article 35 (predecessor to Article XXIII:1 of the GATT 1947) and on the basis of the assurance from the delegate for the United States that this was so, stated that Australia did not wish to make any reservation to Article 94.180
7.96.
The version of Article 94 of the Geneva Draft of the ITO Charter, adopted on 22 August 1947, was entitled "General Exceptions" and contained wording nearly identical to that appearing in Article XXI of the GATT 1947:

Nothing in this Charter shall be construed

(a) to require any Member to furnish any information the disclosure of which it considers contrary to its essential security interests, or

(b) to prevent any Member 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 Member from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.181

7.97.
By September 1947, these developments were also reflected in the draft text of the general tariff agreement in a separate provision entitled "Security Exceptions", which mirrored the language of Article 94 of the Geneva Draft of the ITO Charter.182
7.98.
The Panel considers that the foregoing negotiating history demonstrates that the drafters considered that:

a. the matters later reflected in Article XX and Article XXI of the GATT 1947 were considered to have a different character, as evident from their separation into two articles;

b. the "balance" that was struck by the security exceptions was that Members would have "some latitude" to determine what their essential security interests are, and the necessity of action to protect those interests, while potential abuse of the exceptions would be curtailed by limiting the circumstances in which the exceptions could be invoked to those specified in the subparagraphs of Article XXI(b); and

c. in the light of this balance, the security exceptions would remain subject to the consultations and dispute settlement provisions set forth elsewhere in the Charter.

7.99.
The Panel is also mindful that the negotiations on the ITO Charter and the GATT 1947 occurred very shortly after the end of the Second World War. The discussions of "security" issues throughout the negotiating history should therefore be understood in that context.
7.100.
The negotiating history therefore confirms the Panel's interpretation of Article XXI(b) of the GATT 1994 as requiring that the evaluation of whether the invoking Member has satisfied the requirements of the enumerated subparagraphs of Article XXI(b) be made objectively rather than by the invoking Member itself. In other words, there is no basis for treating the invocation of Article XXI(b)(iii) of the GATT 1994 as an incantation that shields a challenged measure from all scrutiny.

7.5.3.1.3 Conclusion on whether the clause "which it considers" in the chapeau of Article XXI(b) qualifies the determination of the matters in the enumerated subparagraphs of that provision

7.101.
The Panel concludes that the adjectival clause "which it considers" in the chapeau of Article XXI(b) does not extend to the determination of the circumstances in each subparagraph. Rather, for action to fall within the scope of Article XXI(b), it must objectively be found to meet the requirements in one of the enumerated subparagraphs of that provision.

7.5.3.2 Conclusion on whether the Panel has jurisdiction to review Russia's invocation of Article XXI(b)(iii) of the GATT 1994

7.102.
It follows from the Panel's interpretation of Article XXI(b), as vesting in panels the power to review whether the requirements of the enumerated subparagraphs are met, rather than leaving it to the unfettered discretion of the invoking Member, that Article XXI(b)(iii) of the GATT 1994 is not totally "self-judging" in the manner asserted by Russia.
7.103.
Consequently, Russia's argument that the Panel lacks jurisdiction to review Russia's invocation of Article XXI(b)(iii) must fail. The Panel's interpretation of Article XXI(b)(iii) also means that it rejects the United States' argument that Russia's invocation of Article XXI(b)(iii) is "non-justiciable", to the extent that this argument also relies on the alleged totally "self-judging" nature of the provision.183
7.104.
Russia's invocation of Article XXI(b)(iii) being within the Panel's terms of reference under Article XXIII of the GATT 1994, as further elaborated and modified by the DSU, the Panel finds that it has jurisdiction to determine whether the requirements of Article XXI(b)(iii) of the GATT 1994 are satisfied.

7.5.4 The measures at issue and their existence

7.105.
In the preceding Section, the Panel found that it has jurisdiction to review Russia's invocation of Article XXI(b)(iii). The Panel recalls that Russia also argues that certain measures and claims are outside the Panel's terms of reference because Ukraine's panel request does not comply with the requirements of Article 6.2 of the DSU.
7.106.
For presentational purposes, and in order not to interrupt the analysis of Article XXI, the Panel defers the exposition of its examination of the terms of reference to Section 7.7 of the Report. For the reasons provided in that Section, the Panel finds that the following measures are within its terms of reference (the measures at issue):

a. 2016 Belarus Transit Requirements: Requirements that all international cargo transit by road and rail from Ukraine destined for the Republic of Kazakhstan or the Kyrgyz Republic, through Russia, be carried out exclusively from Belarus, and comply with a number of additional conditions related to identification seals and registration cards at specific control points on the Belarus-Russia border and the Russia-Kazakhstan border.184

b. 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods: Bans on all road and rail transit from Ukraine of: (i) goods that are subject to non-zero import duties according to the Common Customs Tariff of the EaEU; and (ii) goods that fall within the scope of the import bans imposed by Resolution No. 778, which are destined for Kazakhstan or the Kyrgyz Republic.185 Transit of such goods may only occur pursuant to a derogation requested by the Governments of Kazakhstan or the Kyrgyz Republic which is authorized by the Russian Government, in which case, the transit is subject to the 2016 Belarus Transit Requirements (above).

c. 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods: Prohibitions on transit from Ukraine across Russia, through checkpoints in Belarus, of goods subject to veterinary and phytosanitary surveillance and which are subject to the import bans implemented by Resolution No. 778, along with related requirements that, as of 30 November 2014, such veterinary goods destined for Kazakhstan or third countries enter Russia through designated checkpoints on the Russian side of the external customs border of the EaEU and only pursuant to permits issued by the relevant veterinary surveillance authorities of the Government of Kazakhstan and the Rosselkhoznadzor, and that, as of 24 November 2014, transit to third countries (including Kazakhstan) of such plant goods take place exclusively through the checkpoints across the Russian state border.186

7.107.
Ukraine has presented evidence of the existence of the above-referenced measures, and the Panel is satisfied that these measures exist.187 This being so, the next question is whether these measures are inconsistent with Russia's obligations under Articles V and X of the GATT 1994 and commitments in Russia's Accession Protocol, or whether there can be no such inconsistency in the circumstances, because the measures were "taken in time of war or other emergency in international relations", and meet the other possible conditions of the chapeau of Article XXI(b).
7.108.
The Panel notes in this regard the particularity of the exception specified in Article XXI(b)(iii). This provision 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. The Panel considers that an evaluation of whether measures are covered by Article XXI(b)(iii), as measures "taken in time of war or other emergency in international relations" (unlike measures covered by the exceptions under Article XX) does not necessitate a prior determination that they would be WTO-inconsistent if they had been taken in normal times, i.e. if they were not taken in time of war or other emergency in international relations. This is because, for the reasons explained in Section 7.5.6, there is no need to determine the extent of the deviation of the challenged measure from the prescribed norm in order to evaluate the necessity of the measure, i.e. that there is no reasonably available alternative measure to achieve the protection of the legitimate interests covered by the exception which is not violative, or is less violative, of the prescribed norm.
7.109.
The Panel thus considers that, once it has found that the measures at issue are within its terms of reference and that Ukraine has demonstrated their existence, the most logical next step in its analysis is to determine whether the measures are covered by subparagraph (iii) of Article XXI(b), i.ewhether the measures were in fact taken during time of war or other emergency in international relations. Only if the Panel finds that the measures were not taken in time of war or other emergency in international relations would it become necessary to determine the consistency of the measures with the provisions of Articles V and X of the GATT 1994, which are the subject of Ukraine's claims.
7.110.
Accordingly, the Panel next determines whether the measures at issue fall within the scope of subparagraph (iii) of Article XXI(b), as measures taken in time of war or other emergency in international relations.

7.5.5 Whether the measures were "taken in time of war or other emergency in international relations" within the meaning of subparagraph (iii) of Article XXI(b)

7.111.
The Panel recalls its interpretation of "emergency in international relations" within the meaning of subparagraph (iii) of Article XXI(b) 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.188
7.112.
Russia, in its first written submission, refers to an emergency in international relations that occurred in 2014, which led Russia to take various actions, including imposing the measures at issue.189 Russia affirms that the events constituting the emergency in international relations are well known to Ukraine and that this dispute raises issues concerning politics, national security and international peace and security.190 It also explains that one reason for formulating its invocation of Article XXI(b)(iii) in such general terms is that it is trying to "keep the issues such as wars, insurrections, unrests, international conflicts outside the scope of the WTO which is not designed for resolution of such crises and related matters".191
7.113.
Ukraine argues that Russia has not adequately identified or described the 2014 emergency, and has therefore not discharged its burden of proof.192
7.114.
In its opening statement at the second meeting of the Panel, Russia posed a "hypothetical question" as to whether circumstances similar to those listed would amount to an emergency in international relations under subparagraph (iii) of Article XXI(b).193 These hypothetical circumstances, as formulated by Russia, are:

a. Unrest within the territory of a country neighbouring a Member, occurring in the immediate vicinity of the Member's border;

b. The loss of control by that neighbouring country over its border;

c. Movement of refugees from that neighbouring country to the Member's territory; and

d. Unilateral measures and sanctions imposed by that neighbouring country or by other countries, which are not authorized by the United Nations, similar to those imposed against Russia by Ukraine.194

7.115.
When asked by the Panel how closely the hypothetical situation described above reflected the actual situation on the ground, the Russian representative explained that Russia had referred to the hypothetical "in order not to introduce again some information that Russia cannot disclose".195 The Russian representative then referred to a paragraph from Ukraine's 2016 Trade Policy Review Report196 which, according to the Russian representative, explains, in Ukraine's words, "what is going on and how real these whole hypothetical questions are".197 The paragraph refers to "the annexation of the Autonomous Republic of Crimea and the military conflict in the east" as factors that had adversely affected Ukraine's economic performance in 2014 and 2015.198
7.116.
Ukraine objects to Russia's use of Ukraine's 2016 Trade Policy Review Report, noting that prior panels have refused to attach importance to the Trade Policy Review Mechanism (TPRM) of Members in considering the arguments of a party in dispute settlement proceedings.199
7.117.
Paragraph A(i) of the TPRM states that the TPRM is "not … intended to serve as a basis for the enforcement of specific obligations under the covered Agreements or for dispute settlement procedures". In two prior disputes, panels have rejected a complainant's reference to the report drawn up by the WTO Secretariat as part of the respondent's Trade Policy Review. In both instances, the reference was used as the basis for an argument that a measure was WTO-inconsistent.200
7.118.
The Panel notes that the Russian representative referred to the relevant paragraph from Ukraine's 2016 Trade Policy Review Report in order to show that the hypothetical situation put forward in Russia's opening statement at the second meeting of the Panel has been referred to by Ukraine—in another context, it is true—as being "the annexation of the Autonomous Republic of Crimea and the military conflict in the east". Russia therefore used the reference to paragraph 1.13 of Ukraine's 2016 Trade Policy Review Report solely to further identify the situation that it had presented in its first written submission in the following general terms: "the emergency in international relations that occurred in 2014 that presented threats to the Russian Federation's essential security interests".201 Russia had also previously asserted that the circumstances that led to the imposition of the measures at issue were publicly available and known to Ukraine.202 Russia did not refer to the relevant paragraph of Ukraine's 2016 Trade Policy Review Report as evidence that Ukraine (or Russia, for that matter) characterizes that situation as an emergency in international relations for the purposes of the present proceedings. The Panel therefore does not consider that paragraph A(i) of the TPRM applies to this situation, or that the Panel is thereby precluded from taking into account Russia's reference to paragraph 1.13 of Ukraine's 2016 Trade Policy Review Report.
7.119.
Accordingly, Russia has identified the situation that it considers to be an emergency in international relations by reference to the following factors: (a) the time-period in which it arose and continues to exist, (b) that the situation involves Ukraine, (c) that it affects the security of Russia's border with Ukraine in various ways, (d) that it has resulted in other countries imposing sanctions against Russia, and (e) that the situation in question is publicly known. The Panel regards this as sufficient, in the particular circumstances of this dispute, to clearly identify the situation to which Russia is referring, and which it argues is an emergency in international relations.
7.120.
Therefore, the Panel must determine whether this situation between Ukraine and Russia that has existed since 2014 constitutes an emergency in international relations within the meaning of subparagraph (iii) of Article XXI(b).
7.121.
The Panel notes that it is not relevant to this determination which actor or actors bear international responsibility for the existence of this situation to which Russia refers. Nor is it necessary for the Panel to characterize the situation between Russia and Ukraine under international law in general.
7.122.
There is evidence before the Panel that, at least as of March 2014, and continuing at least until the end of 2016, relations between Ukraine and Russia had deteriorated to such a degree that they were a matter of concern to the international community.203 By December 2016, the situation between Ukraine and Russia was recognized by the UN General Assembly as involving armed conflict.204 Further evidence of the gravity of the situation is the fact that, since 2014, a number of countries have imposed sanctions against Russia in connection with this situation.205
7.123.
Consequently, the Panel is satisfied that the situation between Ukraine and Russia since 2014 constitutes an emergency in international relations, within the meaning of subparagraph (iii) of Article XXI(b) of the GATT 1994.
7.124.
It thus remains for the Panel to determine whether the measures taken by Russia with respect to Ukraine were "taken in time of" the emergency in international relations. In this regard, the Panel notes that the 2016 Belarus Transit Requirements were introduced by Russia on 1 January 2016, the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods were introduced on 1 July 2016, and the 2014Belarus-Russia Border Bans on Transit of Resolution No778 Goods were introduced by Russia in November 2014. All of the measures were therefore introduced during the emergency in international relations and thus were "taken in time of" such emergency for purposes of subparagraph (iii).
7.125.
On the basis of the foregoing considerations, the Panel concludes that each of the measures at issue was "taken in time of" an emergency in international relations, within the meaning of subparagraph (iii) of Article XXI(b) of the GATT 1994.

7.5.5.1 Conclusion

7.126.
The Panel finds as follows:

a. As of 2014, there has existed a situation in Russia's relations with Ukraine that constitutes an emergency in international relations within the meaning of subparagraph (iii) of Article XXI(b) of the GATT 1994; and

b. each of the measures at issue was taken in time of this emergency in international relations within the meaning of subparagraph (iii) of Article XXI(b) of the GATT 1994.

7.5.6 Whether the conditions of the chapeau of Article XXI(b) of the GATT 1994 are satisfied

7.127.
The Panel recalls that, in paragraph 7.63 above, it posited that the adjectival clause "which it considers" in the chapeau of Article XXI(b) can be read to qualify only the "necessity" of the measures for the protection of the invoking Member's essential security interests, or also the determination of these "essential security interests", or finally and maximally, to qualify as well the determination of the sets of circumstances described in each of the subparagraphs of Article XXI(b). In paragraph 7,101 above, the Panel rejected the last of these possible interpretations.
7.128.
The Panel has yet to address the remaining two possible interpretations of Article XXI(b). In other words, the question remains whether the adjectival clause "which it considers" in the chapeau of Article XXI(b) qualifies both the determination of the invoking Member's essential security interests and the necessity of the measures for the protection of those interests, or simply the determination of their necessity.
7.129.
Russia argues that the adjectival clause means that both the determination of a Member's essential security interests, and the determination of the necessity of the action taken for the protection of those interests, is left entirely to the discretion of the invoking Member. Several of the third parties also consider that Members have wide discretion to identify for themselves their essential security interests.206 Ukraine argues that, while all Members have the right to determine their own level of protection of essential security interests, that does not mean that a Member may unilaterally define what are essential security interests.207 According to Ukraine, it is for panels, rather than for Members, to interpret the term "essential security interests", which forms part of the WTO covered agreements, in accordance with customary rules of interpretation of public international law.208 Consistent with its interpretation of Article XXI(b)(iii), Ukraine argues that Russia has failed to identify the essential security interests that are threatened by the 2014 emergency, and has not explained or demonstrated the connection between the measures and its essential security interests.209 While Russia also argued that, pursuant to Article XXI(a) of the GATT 1994, it cannot be required to further explain its actions, beyond what it has declared in its first written submission and opening statement at the first meeting of the Panel, Ukraine considers that Russia cannot invoke Article XXI(a) of the GATT 1994 to evade its burden of proof under Article XXI(b)(iii).210
7.130.
"Essential security interests"211, which is evidently a narrower concept than "security interests", may generally be understood to refer to those interests relating to the quintessential functions of the state, namely, the protection of its territory and its population from external threats, and the maintenance of law and public order internally.
7.131.
The specific interests that are considered directly relevant to the protection of a state from such external or internal threats 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, it is left, in general, to every Member to define what it considers to be its essential security interests.
7.132.
However, this does not mean that a Member is free to elevate any concern to that of an "essential security interest". Rather, the discretion of a Member to designate particular concerns as "essential security interests" is limited by its obligation to interpret and apply Article XXI(b)(iii) of the GATT 1994 in good faith. The Panel recalls that the obligation of good faith is a general principle of law and a principle of general international law which underlies all treaties, as codified in Article 31(1) ("[a] treaty shall be interpreted in good faith …") and Article 26 ("[e]very treaty … must be performed [by the parties] in good faith") of the Vienna Convention.212
7.133.
The obligation of good faith requires that Members not use the exceptions in Article XXI as a means to circumvent their obligations under the GATT 1994. A glaring example of this would be where a Member sought to release itself from the structure of "reciprocal and mutually advantageous arrangements" that constitutes the multilateral trading system213 simply by re-labelling trade interests that it had agreed to protect and promote within the system, as "essential security interests", falling outside the reach of that system.
7.134.
It is therefore incumbent on the invoking Member to articulate the essential security interests said to arise from the emergency in international relations sufficiently enough to demonstrate their veracity.
7.135.
What qualifies as a sufficient level of articulation will depend on the emergency in international relations at issue. In particular, the Panel considers that the less characteristic is the "emergency in international relations" invoked by the Member, i.e. the further it is removed from armed conflict, or a situation of breakdown of law and public order (whether in the invoking Member or in its immediate surroundings), the less obvious are the defence or military interests, or maintenance of law and public order interests, that can be generally expected to arise. In such cases, a Member would need to articulate its essential security interests with greater specificity than would be required when the emergency in international relations involved, for example, armed conflict.
7.136.
In the case at hand, the emergency in international relations is very close to the "hard core" of war or armed conflict. While Russia has not explicitly articulated the essential security interests that it considers the measures at issue are necessary to protect, it did refer to certain characteristics of the 2014 emergency that concern the security of the Ukraine‑Russia border.214
7.137.
Given the character of the 2014 emergency, as one that has been recognized by the UN General Assembly as involving armed conflict, and which affects the security of the border with an adjacent country and exhibits the other features identified by Russia, the essential security interests that thereby arise for Russia cannot be considered obscure or indeterminate.215 Despite its allusiveness, Russia's articulation of its essential security interests is minimally satisfactory in these circumstances. Moreover, there is nothing in Russia's expression of those interests to suggest that Russia invokes Article XXI(b)(iii) simply as a means to circumvent its obligations under the GATT 1994.
7.138.
The obligation of good faith, referred to in paragraphs 7,132 and 7,133 above, applies not only to the Member's definition of the essential security interests said to arise from the particular emergency in international relations, but also, and most importantly, to their connection with the measures at issue. Thus, as concerns the application of Article XXI(b)(iii), this obligation is crystallized in demanding that the measures at issue meet a minimum requirement of plausibility in relation to the proffered essential security interests, i.e. that they are not implausible as measures protective of these interests.
7.139.
The Panel must therefore review whether the measures are so remote from, or unrelated to, the 2014 emergency that it is implausible that Russia implemented the measures for the protection of its essential security interests arising out of the emergency.
7.140.
The Panel recalls that the 2016 measures (i.e. the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods): (a) restrict transit by road and rail from Ukraine which is destined for Kazakhstan or the Kyrgyz Republic from transiting directly across the Ukraine‑Russia border, requiring instead that such traffic detour through Belarus, and meet additional conditions relating to identification seals and registration cards at specific control points; and (b) prohibit altogether such transit for certain classes of goods unless such transit is exceptionally authorized.216
7.141.
Ukraine characterizes the 2016 measures as retaliation by Russia for Ukraine's decision to pursue economic integration with the European Union (through the EU-Ukraine Association Agreement which includes a DCFTA) rather than with Russia through the EaEU. Ukraine does not indicate whether it considers that decision, and consequently the 2016 measures, to be related also to the emergency in international relations that had arisen in early 2014.217 While the evidence presented by Ukraine establishes that the 2016 measures were direct or immediate responses to the entry into force of the DCFTA between the European Union and Ukraine, this is only a partial explanation of the background to Russia's adoption of the 2016 measures.
7.142.
The Panel considers that there is a clear correlation between the change in government in Ukraine in early 2014, the newly sworn-in government's decision to sign the EU‑Ukraine Association Agreement in March 2014, the deterioration in Ukraine's relations with Russia (as evidenced by the March 2014 UN General Assembly resolution concerning the territorial integrity of Ukraine), and the sanctions that have been imposed against Russia by several countries.218 In other words, Ukraine's decision to pursue economic integration with the European Union rather than with the EaEU cannot reasonably be seen as unrelated to the events that followed, and led to the emergency in international relations, during which Russia took a number of actions in respect of Ukraine, including the adoption of the 2016 measures.
7.143.
The 2014 measures (i.e. the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods) operate to ban transit of goods subject to Russian sanctions from transiting across Russia from its border with Belarus.219 These bans were imposed specifically to prevent circumvention of the import bans that Russia had imposed under Resolution No. 778.220 The Resolution No. 778 import bans were responses taken by Russia in August 2014 to the sanctions that other countries had imposed against it earlier in 2014 in response to the emergency in international relations.
7.144.
Moreover, all of the measures at issue restrict the transit from Ukraine of goods across Russia, particularly across the Ukraine-Russia border, in circumstances in which there is an emergency in Russia's relations with Ukraine that affects the security of the Ukraine-Russia border and is recognized by the UN General Assembly as involving armed conflict.
7.145.
In these circumstances, the measures at issue cannot be regarded as being so remote from, or unrelated to, the 2014 emergency, that it is implausible that Russia implemented the measures for the protection of its essential security interests arising out of that emergency. This conclusion is not undermined by evidence on the record that the general instability of the Ukraine-Russia border did not prevent some bilateral trade from taking place along parts of the border.221
7.146.
This being so, it is for Russia to determine the "necessity" of the measures for the protection of its essential security interests. This conclusion follows by logical necessity if the adjectival clause "which it considers" is to be given legal effect.222
7.147.
The Panel has been referred to EC – Bananas III (Ecuador) (Article 22.6 – EC) in which the arbitrators interpreted the phrase "if that party considers" in Articles 22.3(b) and 22.3(c) of the DSU as providing a margin of appreciation to the party which was nevertheless subject to review by the arbitrators.223 The arbitrator's decision regarding the scope of review under Article 22.3 of the DSU was based on the fact that the discretion accorded to the complaining party under the relevant subparagraphs of that provision was subject to the obligation in the introductory words to Article 22.3 of the DSU, which provides that "[i]n considering what concessions or other obligations to suspend, the complaining party shall apply the following principles and procedures".224 There is no equivalent obligation anywhere in the text of Article XXI that expressly conditions the discretion accorded to an invoking Member under the chapeau of Article XXI(b).

7.5.6.1 Conclusion

7.148.
The Panel finds that Russia has satisfied the conditions of the chapeau of Article XXI(b) of the GATT 1994.

7.5.7 Overall conclusion

7.149.
Accordingly, the Panel finds that Russia has met the requirements for invoking Article XXI(b)(iii) of the GATT 1994 in relation to the measures at issue, and therefore the measures are covered by Article XXI(b)(iii) of the GATT 1994.

7.6 UKRAINE'S CLAIMS OF WTO-INCONSISTENCY OF THE MEASURES AT ISSUE

7.6.1 Introduction

7.150.
In this Section, the Panel addresses Ukraine's claims of inconsistency with Articles V and X of the GATT 1994 and commitments in Russia's Working Party Report, as incorporated into its Accession Protocol by reference.
7.151.
Russia does not present rebuttal arguments or evidence regarding Ukraine's claims, as it considers that the measures at issue are "consistent with the provisions of the WTO Agreement, including the GATT and the Accession Protocol" on the basis of its invocation of Article XXI(b)(iii) of the GATT 1994.225
7.152.
The Panel recalls the statement of the Appellate Body in US – Wool Shirts and Blouses that nothing in the DSU requires panels to consider or decide issues that are not "absolutely necessary to dispose of the particular dispute" between the parties.226 Indeed, the Appellate Body cautioned that to do so would "not be consistent with the aim of the WTO dispute settlement system" to secure a "positive solution to a dispute" under Article 3.7 of the DSU.227
7.153.
Having found that the measures were taken in time of an "emergency in international relations" (and meet the other conditions of Article XXI(b)), the Panel does not consider it necessary to additionally examine their WTO-consistency in a different factual context and on a different legal basis, i.e. as if the measures at issue had not been taken in time of an "emergency in international relations".
7.154.
However, the Panel is mindful 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. Accordingly, in Section 7.6.2, the Panel proceeds to analyse those aspects of Ukraine's claims which, were it not for the fact that the measures were taken in time of an "emergency in international relations" (and met the other conditions of Article XXI(b)), would enable the Appellate Body to complete the legal analysis.228
7.155.
Additionally, Russia has invoked Article XXI(b)(iii) of the GATT 1994 in relation to all contested provisions of the WTO Agreement, including commitments in its Accession Protocol. Accordingly, in Section 7.6.4, the Panel addresses whether Article XXI(b)(iii) may be invoked by Russia in relation to commitments in its Accession Protocol.229

7.6.2 Article V:2 of the GATT 1994

7.6.2.1 Article V:2, first sentence

7.6.2.1.1 Main arguments of the parties

7.156.
Ukraine argues that the 2016 Belarus Transit Requirements, the 2016 Transit Bans on Non‑Zero Duty and Resolution No. 778 Goods, and the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods do not guarantee freedom of transit through the territory of Russia for traffic in transit coming from Ukraine and/or going to Kazakhstan or the Kyrgyz Republic, and therefore, that the measures are inconsistent with the first sentence of Article V:2.
7.157.
Ukraine argues that the measures at issue violate the first sentence of Article V:2 of the GATT 1994 by restricting freedom of transit in an "absolute manner".230 In Ukraine's view, where a Member completely prohibits traffic in transit from a neighbouring country from transiting through its territory, such a measure will "necessarily" be inconsistent with the first sentence of Article V:2.231 Ukraine additionally contends that the 2016 Belarus Transit Requirements and 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods preclude the use of all routes across the Ukraine‑Russia border, routes that are "direct" and therefore necessarily qualify as "routes most convenient for international transit".232 Ukraine considers that the following factors may be relevant to the determination of which routes are most convenient for international transit: (a) the mode of transport; (b) the length of the transit route; (c) access to the transit route; (d) any administrative formalities and charges associated with the route; (e) the operator's right to choose a mode of transport; (f) the cost of using a transit route; and (g) the provenance, destination and characteristics of the goods.233
7.158.
Ukraine also claims that the restriction on entry and exit through certain checkpoints along the Belarus-Russia border and the Russia-Kazakhstan border under the 2016 Belarus Transit Requirements is inconsistent with the first sentence of Article V:2. Ukraine argues that the restriction on entry and exit removes the "freedom to choose the most convenient route".234 Ukraine also considers that the additional conditions related to identification seals and registration cards that form part of the 2016 Belarus Transit Requirements "impose an additional burden" on traffic in transit and thereby do not guarantee freedom of transit as required by the first sentence of Article V:2.235
7.159.
Ukraine similarly considers that the authorization requirement under the derogation procedure of the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods does not guarantee freedom of transit as required by the first sentence of Article V:2.236 Ukraine considers that transit of the non-zero duty goods and Resolution No. 778 goods "is as good as prohibited" due to the burdensome nature of this requirement.237 Ukraine also argues that the restriction on entry and exit through certain checkpoints along the Estonia-Russia, Finland-Russia and Latvia‑Russia borders under the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods is inconsistent with the first sentence of Article V:2 because it makes "certain most convenient routes unavailable for traffic in transit".238
7.160.
Finally, the Panel notes Ukraine's interpretive argument, developed at the first meeting of the Panel, that "where a measure is applied to goods transiting via the most convenient routes of passage and is found to violate other parts of Article V of the GATT 1994, including the second sentence of Article V:2, then such a measure is also inconsistent with the obligation of a Member to guarantee the freedom of transit via the most convenient routes" pursuant to the first sentence of Article V:2.239 Ukraine has nonetheless advanced several independent arguments alleging inconsistency with the first sentence of Article V:2.
7.161.
As previously noted240, Russia does not present any arguments in response to Ukraine's specific claims of inconsistency with the first sentence of Article V:2.

7.6.2.1.2 Main arguments of third parties

7.162.
Brazil disagrees with Ukraine that a finding of inconsistency with the first sentence of Article V:2 will necessarily follow from a finding of inconsistency with any other paragraph of Article V of the GATT 1994.241 For example, Brazil suggests that inconsistency with the obligation in Article V:4 to ensure that "[a]ll charges and regulations … shall be reasonable" will not necessarily entail inconsistency with the first sentence of Article V:2.242 Brazil also does not believe that the imposition of certain procedural controls or restrictions on traffic in transit will automatically result in inconsistency with Article V:2.243
7.163.
Canada agrees with Ukraine that a finding of inconsistency with the first sentence of Article V:2 will necessarily follow from a finding of inconsistency with any other paragraph of Article V, as these other paragraphs "more precisely define the scope and limits of the right, and therefore the corresponding obligations embodied in that freedom".244 Canada submits that Article V:2 does not prevent Members from imposing certain restrictions and burdens on traffic in transit, and does not equate to an unqualified right of free passage.245 Canada also considers that it is at least "conceivable" that a transit route that involves entry and transit via the territory of a third country could nevertheless amount to a route that is the "most convenient" route.246
7.164.
The European Union disagrees with Ukraine that a finding of inconsistency with the first sentence of Article V:2 will necessarily follow from a finding of inconsistency with any other paragraph of Article V, and points to disparities in scope between the first sentence of Article V:2 and other paragraphs of Article V.247 The European Union also considers that the Panel need not, and should not, decide this question in the abstract for the purpose of resolving this dispute.248 The European Union considers that the following factors may be relevant to the determination of which routes are "most convenient for international transit": geography; the mode of transport (by road, rail, water, air, or pipelines); the specificity of the different types of goods that are in transit; the total number of transit routes; their varying convenience for international transit from the perspective of a reasonable trader; and criteria such as distance, time, safety, as well as road and infrastructure quality.249 The European Union also states that the first sentence of Article V:2 not only requires the availability of the most convenient routes but also the absence of restrictions for using these routes.250 Finally, the European Union considers it to be "hardly conceivable" that an indirect route requiring a detour through Belarus for Ukrainian carriers destined for Kazakhstan and the Kyrgyz Republic could qualify as a route "most convenient for international transit".251
7.165.
Japan disagrees with Ukraine that a finding of inconsistency with the first sentence of Article V:2 will necessarily follow from a finding of inconsistency with any other paragraph of Article V.252 However, Japan agrees with Ukraine that a measure that blocks all access into the territory of a Member would likely be inconsistent with Article V:2 unless the measure could be justified on some basis other than Article V of the GATT 1994.253 Japan clarifies, however, that the first sentence of Article V:2 does not require unqualified, unrestricted access, but only guarantees freedom of transit via those routes most convenient for international transit.254 Japan also proposes that once a complaining Member makes a prima facie case that there are other routes that are more convenient than those designated by the respondent Member, the burden of proof should shift to the respondent Member to explain why it considers the designated routes "most convenient" for international transit.255 Japan submits that whether a given route is "most convenient" must be determined having regard to objective factors such as "the means of transit, available routes, distances or costs".256

7.6.2.1.3 Analysis

7.166.
The first sentence of Article V:2 of the GATT 1994 provides that:

There shall be freedom of transit through the territory of each [Member], via the routes most convenient for international transit, for traffic in transit to or from the territory of other [Members].

7.167.
Ukraine advances several arguments in support of its claims of inconsistency with the first sentence of Article V:2 of the GATT 1994.257 The Panel will only address those arguments necessary to enable the Appellate Body to complete the analysis.258 The Panel first examines Ukraine's argument that "where a WTO Member prohibits traffic in transit from the territory of another country with which it shares a border, such a measure necessarily does not guarantee freedom of transit" as required by the first sentence of Article V:2.259
7.168.
The Panel notes that the first sentence of Article V:2 creates an obligation for each Member to guarantee freedom of transit "through the territory of each [Member] … for traffic in transit to or from the territory of other [Members]".260 The use of the conjunction "or" logically creates two separate obligations under the first sentence of Article V:2. Namely, each Member is required to guarantee freedom of transit through its own territory for traffic in transit to the territory of any other Member, or from the territory of any other Member.
7.169.
The immediate context provided by the other provisions of Article V also informs the interpretation of the first sentence of Article V:2. The Panel recalls that Article V:1 defines the term "traffic in transit" as any "goods … [whose] passage across such territory … is only a portion of a complete journey beginning and terminating beyond the frontier of the [Member] across whose territory the traffic passes". This informs the scope of Article V:2 by suggesting that each Member incurs obligations in relation to "traffic in transit" only during the portion of the journey when such traffic passes through that Member's territory.
7.170.
Similar to Article V:2, Articles V:3, V:4 and V:5 also employ the terms "traffic in transit" and the terms "to" or "from" in relation to the territory of other Members.261 However, Article V:6 distinctly creates an obligation to accord to "products which have been in transit" treatment no less favourable than that which would have been accorded had the products been transported "from their place of origin to their destination". The difference in terminology between Article V:6 and the other paragraphs of Article V suggests that the terms "from" and "to" as used in Articles V:2 through V:5 have a distinct meaning from the terms "from [the] place of origin" and "to [the place of] destination" as used in Article V:6. This is also supported by the text of the second sentence of Article V:2, which draws an explicit distinction between places of "origin", "departure", "entry", "exit" and "destination".
7.171.
The text and context of Article V:2 thus suggest that the phrases "from the territory" and "to … the territory" in the first sentence of Article V:2 should be construed as referring to the place of entry and place of exit of the traffic in transit, and not the place of origin or destination.
7.172.
Accordingly, under the first sentence of Article V:2:

a. Each Member is required to guarantee freedom of transit through its territory for any traffic in transit entering from any other Member, and

b. Each Member is required to guarantee freedom of transit through its territory for traffic in transit to exit toany other Member.

7.173.
To establish inconsistency with the first sentence of Article V:2, it will consequently be sufficient to demonstrate either that a Member has precluded transit through its territory for traffic in transit enteringits territory from any other Member, or exiting its territory to any other Member, via the routes most convenient for international transit.
7.174.
As a result, where a measure prohibits traffic in transit from another Member from entering at all points along a shared land border, the measure will necessarily be inconsistent with the first sentence of Article V:2.
7.175.
The 2016 Belarus Transit Requirements mandate that all international cargo transit by road or rail from Ukraine which is destined for Kazakhstan or the Kyrgyz Republic shall be carried out exclusively from Belarus and comply with a number of additional conditions related to identification seals and registration cards at specific control points on the Belarus-Russia border and the Russia‑Kazakhstan border.262
7.176.
The 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods ban road and rail transit departing from Ukraine and destined for Kazakhstan or the Kyrgyz Republic of: (a) goods that are subject to non-zero import duties according to the Common Customs Tariff of the EaEU; and (b) goods that fall within the scope of the import bans imposed by Resolution No. 778 of the Government of the Russian Federation, unless such transit is requested by Kazakh or Kyrgyz authorities and authorized by Russian authorities, in which case such transit is subject to the 2016 Belarus Transit Requirements.263
7.177.
The 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods ban the transit of all goods subject to veterinary and phytosanitary surveillance and that fall within the scope of the import bans imposed by Resolution No. 778 through Russia from checkpoints in Belarus, and instead require that such veterinary goods destined for Kazakhstan or third countries enter Russia through designated checkpoints along the external border of the EaEU and be subject to clearance by the appropriate Kazakh or Russian authorities, and that such plant goods destined for Kazakhstan or third countries enter Russia exclusively through the same checkpoints.264
7.178.
For reasons explained in Section 7.7, the only aspect of the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods within the Panel's terms of reference is the application of the bans to transit from Ukraine.265 The Panel recalls that all transit departing from Ukraine and destined for Kazakhstan and the Kyrgyz Republic has, since 2016, been subject to the 2016 Belarus Transit Requirements. Nevertheless, the 2014 Belarus‑Russia Border Bans on Transit of Resolution No. 778 Goods would still, according to the terms of the instruments implementing the measure, apply to transit from Ukraine and destined for places other than Kazakhstan and the Kyrgyz Republic.
7.179.
Applying the aforementioned definition of "traffic in transit" as outlined in Article V:1266, the goods covered by the 2016 Belarus Transit Requirements, the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods, and the 2014 Belarus-Russia Border Bans on Transit of Resolution No778 Goods qualify as "traffic in transit" for the purposes of Article V:2 of the GATT 1994.
7.180.
Addressing next whether the measures prohibit traffic in transit from another Member from entering at all points along a shared land border, the 2016 Belarus Transit Requirements, by mandating that traffic in transit may only enter Russia from Belarus, expressly prohibit traffic in transit from entering Russia from Ukraine.
7.181.
The 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods expressly prohibit traffic in transit from entering Russia from Ukraine. Additionally, even where transit is exceptionally authorized under the derogation procedure, such traffic in transit is still required to enter Russia exclusively from Belarus, and is therefore expressly prohibited from entering Russia from Ukraine.
7.182.
The 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods, as applied to traffic in transit from Ukraine of Resolution No. 778 goods, prohibit traffic in transit from entering Russia from the territory of any Member other than those countries from which entry is exclusively permitted, as listed in the measure.267

7.6.2.1.4 Conclusions

7.183.
The Panel concludes 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 first sentence of Article V:2 of the GATT 1994:

a. the 2016 Belarus Transit Requirements, because these measures prohibit traffic in transit from entering Russia from Ukraine;

b. the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods, because these measures prohibit traffic in transit from entering Russia from Ukraine; and

c. the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods, because these measures prohibit traffic in transit from Ukraine from entering Russia from any Member other than those countries from which entry is exclusively permitted, as listed in the measure.

7.184.
The Panel declines to address Ukraine's additional arguments that the measures are inconsistent with the first sentence of Article V:2.

7.6.2.2 Article V:2, second sentence

7.6.2.2.1 Main arguments of the parties

7.185.
Ukraine argues that the second sentence of Article V:2 prohibits Members from making anydistinction which is based on the place of "origin, departure, entry, exit or destination, or on any circumstances relating to the ownership of goods, of vessels or other means of transport".268 Ukraine argues that the 2016 Belarus Transit Requirements violate the second sentence of Article V:2 by impermissibly making distinctions based on the place of departure and entry (the Ukraine‑Russia border), the place of exit (the Russia-Kazakhstan border), and the place of destination (Kazakhstan and the Kyrgyz Republic) of the traffic in transit.269 Ukraine argues that the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods violate the second sentence of Article V:2 by impermissibly making distinctions based on the place of origin (goods originating from countries listed in Resolution No. 778, as amended to include Ukraine, and goods that are subject to an import duty other than zero under the Common Customs Code of the EaEU), the place of departure and entry (the Belarus-Russia border, under the derogation procedure), the place of exit (the Russia-Kazakhstan border), and the place of destination (Kazakhstan and the Kyrgyz Republic) of the traffic in transit.270 Ukraine also considers that the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods violate the second sentence of Article V:2 because they make impermissible distinctions based on the place of origin (goods originating from countries listed in Resolution No. 778, as amended to include Ukraine)271, the place of entry (a limited number of checkpoints on the external border of the EaEU), and the place of destination (imposing different permit requirements depending on whether the goods are destined for Kazakhstan or third countries) of the traffic in transit.272
7.186.
As previously noted273, Russia does not present any arguments in response to Ukraine's specific claims of inconsistency with the second sentence of Article V:2.

7.6.2.2.2 Main arguments of third parties

7.187.
Canada agrees with Ukraine that the second sentence of Article V:2 prohibits Members from making any distinction which is based on the place of origin, departure, entry, exit, destination and any circumstances relating to the ownership of goods, vessels, or other means of transport.274 Canada additionally submits that the closed list in the second sentence of Article V:2 suggests that any measures that discriminate based on other criteria should instead be dealt with under Article V:5.275
7.188.
Japan also agrees with Ukraine that the second sentence of Article V:2 prohibits Members from making any distinction which is based on the place of origin, departure, entry, exit, destination and any circumstances relating to the ownership of goods, vessels or other means of transport.276 Japan also proposes that the objective structure, design and operation of the measure, and not the subjective judgment of the Member imposing the measure, should be examined to conclude whether any such distinctions have been made.277

7.6.2.2.3 Analysis

7.189.
The second sentence of Article V:2 provides that:

No distinction shall be made which is based on the flag of vessels, the place of origin, departure, entry, exit or destination, or any circumstances relating to the ownership of goods, of vessels or of other means of transport.

7.190.
The 2016 Belarus Transit Requirements mandate that all international cargo transit by road or rail departing from Ukraine and destined for Kazakhstan or the Kyrgyz Republic must enter Russia exclusively from Belarus and comply with a number of additional conditions related to identification seals and registration cards at specific control points on the Belarus-Russia border and the Russia‑Kazakhstan border.
7.191.
The 2016 Belarus Transit Requirements expressly apply only to traffic in transit departing from Ukraine (thereby making distinctions based on the place of departure) which is destined for Kazakhstan or the Kyrgyz Republic (thereby making distinctions based on the place of destination) and require that such traffic enter Russia only from Belarus (thereby making distinctions based on the place of entry). The additional conditions related to identification seals and registration cards apply only to traffic in transit that is subject to the 2016 Belarus Transit Requirements. These conditions also involve the same prohibited distinctions.
7.192.
The 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods ban road and rail transit departing from Ukraine and destined for Kazakhstan or the Kyrgyz Republic of: (a) goods that are subject to non-zero import duties according to the Common Customs Tariff of the EaEU; and (b) goods that fall within the scope of the import bans imposed by Resolution No778, unless such transit is requested by Kazakh and Kyrgyz authorities and authorized by Russian authorities, in which case such transit is subject to the 2016 Belarus Transit Requirements.
7.193.
The 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods expressly apply only to traffic in transit departing from Ukraine (thereby making distinctions based on the place of departure) which is destined for Kazakhstan or the Kyrgyz Republic (thereby making distinctions based on the place of destination). The 2016 Transit Bans apply to the transit of particular goods, namely, goods that are subject to customs duties on their importation to the EaEU and goods that originate in countries that are listed in Resolution No. 778, as amended to include Ukraine (thereby making distinctions based on the place of origin). Additionally, even if traders exceptionally receive authorization, such traffic in transit is still subject to the 2016 Belarus Transit Requirements and thus required to enter Russia exclusively from Belarus (thereby making distinctions based on the place of entry).
7.194.
The 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods ban the transit of all goods subject to veterinary and phytosanitary surveillance and that fall within the scope of the import bans imposed by Resolution No. 778 through Russia from checkpoints in Belarus, and instead require that such veterinary goods destined for Kazakhstan or third countries enter Russia through designated checkpoints along the external border of the EaEU and be subject to clearance by the appropriate Kazakh or Russian authorities, and that such plant goods destined for Kazakhstan or third countries enter Russia exclusively through the same checkpoints. The 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods (to the extent that they fall within the Panel's terms of reference) apply to traffic in transit from Ukraine and destined for places other than Kazakhstan and the Kyrgyz Republic.278
7.195.
The 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods, as applied to traffic in transit from Ukraine of Resolution No. 778 goods, require such traffic in transit to enter Russia from certain countries on the external border of the EaEU (thereby making distinctions based on the place of entry).279 The measure applies to goods originating from countries listed in Resolution No. 778, as amended to include Ukraine (thereby making distinctions based on the place of origin). The additional conditions relating to entry through designated checkpoints and clearance apply only to traffic in transit subject to the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods. These conditions also involve the same prohibited distinctions.

7.6.2.2.4 Conclusions

7.196.
The Panel concludes 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:

a. the 2016 Belarus Transit Requirements, because these measures make distinctions based on the place of departure (Ukraine), the place of destination (Kazakhstan and the Kyrgyz Republic) and the place of entry (Belarus, where entry is exclusively permitted) of the traffic in transit;

b. the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods, because these measures make distinctions based on the place of departure (Ukraine), the place of destination (Kazakhstan and the Kyrgyz Republic), the place of origin (countries listed in Resolution No. 778, as amended to include Ukraine) and the place of entry (Belarus, where entry is exclusively permitted) of the traffic in transit; and

c. the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods, because these measures make distinctions based on the place of entry (certain countries from which entry is exclusively permitted, as listed in that measure) and the place of origin (countries listed in Resolution No. 778, as amended to include Ukraine) of the traffic in transit.

7.6.3 Remaining claims under the GATT 1994 and Russia's Accession Protocol

7.6.3.1 Introduction

7.197.
Having found that the measures were taken in time of an "emergency in international relations" (and meet the other conditions of Article XXI(b)), the Panel has not considered it necessary to examine the WTO-consistency of the measures as if they had been taken in a different factual context or on a different legal basis.280 However, in the event of the Panel's findings on Article XXI(b)(iii) being reversed on appeal, the Panel has considered those aspects of Ukraine's claims which would enable the Appellate Body to complete the legal analysis.
7.198.
In particular, the Panel has examined whether, 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 measures at issue were inconsistent with the first and second sentences of Article V:2 of the GATT 1994. The Panel has outlined the key features of the measures at issue, and concluded that the measures would have been prima facie inconsistent with these provisions, for the reasons outlined in Section 7.6.2.
7.199.
The Panel has already concluded that, had the measures been taken in normal times, every aspect of them would have been prima facie inconsistent with either the first or second sentence of Article V:2 of the GATT 1994, or both. Ukraine's claims under Articles V:3, V:4 and V:5 challenge the same aspects of the measures.281 The Panel considers that addressing these claims would not add anything to the ability of the Appellate Body to complete the analysis, nor add anything to the ability of the DSB to make "sufficiently precise recommendations and rulings"282 in the event that the Appellate Body were to make findings of inconsistency with either the first or second sentence of Article V:2, or both.
7.200.
In relation to Ukraine's remaining claims, the Panel recalls the statement of the Appellate Body in Argentina – Import Measures that it failed to see how a finding relating to "the publication of [a] WTO-inconsistent measure would contribute to securing a positive solution to this dispute".283 Accordingly, where a measure is found to be WTO-inconsistent, findings relating to the publication or administration of the same measure are unlikely to be necessary or useful in resolving the matter.284 Ukraine's claims under Articles X:1, X:2 and X:3(a) of the GATT 1994 challenge the same measures, or constituent legal instruments implementing aspects of these measures. The Panel considers that addressing these claims would not add anything to the ability of the Appellate Body to complete the analysis, nor add anything to the ability of the DSB to make "sufficiently precise recommendations and rulings"285 in the event that the Appellate Body were to make findings of inconsistency with the first or second sentence of Article V:2, or both. These considerations are equally applicable to Ukraine's claims under paragraphs 1426, 1427 and 1428 of Russia's Working Party Report, which all relate to the publication or administration of the same contested measures.
7.201.
As a result, the Panel does not consider it necessary to address Ukraine's remaining claims under Articles V:3, V:4, V:5, X:1, X:2 and X:3(a) of the GATT 1994 and paragraphs 1426, 1427 and 1428 of Russia's Working Party Report. Accordingly, the Panel has only summarized the relevant arguments of the parties and third parties in the following Section of the Report.286

7.6.3.2 Article V:3

7.6.3.2.1 Main arguments of the parties

7.202.
Ukraine argues that the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods impose "unnecessary delays or restrictions" on traffic in transit, and therefore, that these measures are inconsistent with Article V:3.
7.203.
In Ukraine's view, a measure will be inconsistent with Article V:3 whenever it subjects traffic in transit to any delays or restrictions which that are go beyond what is necessary "to put traffic in transit under a transit procedure in order to ensure that the goods move through the territory (and eventually leave the territory)".287 Ukraine contends that, in examining whether such delays or restrictions are "unnecessary", the Panel should consider: (a) the trade restrictiveness of the measure, (b) the degree of contribution of the measure to the achievement of its objective, and (c) whether less restrictive alternative measures are reasonably available.288
7.204.
Ukraine consequently argues that the following aspects of the measures at issue subject traffic in transit to "unnecessary delays or restrictions" in the sense of Article V:3.289 First, Ukraine argues that the limitation to certain designated checkpoints under the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods is unnecessary to ensure that goods are put under an appropriate transit procedure, as this objective could be equally achieved at other existing control points.290 Second, Ukraine argues that the requirement of government authorization under the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods is an "unnecessary" restriction because it has no clear relationship to the objective of ensuring that goods undergo an appropriate transit procedure.291 Finally, Ukraine argues that the identification seals and registration card conditions attached to the 2016 Belarus Transit Requirements constitute "unnecessary" restrictions and delays because such traffic in transit must already undergo the identification procedures required by the EaEU.292
7.205.
As previously noted293, Russia does not present any arguments in response to Ukraine's specific claims of inconsistency with Articles V:3, V:4 and V:5 of the GATT 1994.

7.6.3.2.2 Main arguments of third parties

7.206.
Brazil proposes that whether delays or restrictions are "necessary" under Article V:3 must be examined on a case-by-case basis, including assessing "the trade restrictiveness of the procedures, its degree of contribution to the public interest at stake and the risk of non-fulfilment".294 Brazil also considers that restrictions or delays can be "necessary" to achieve legitimate objectives that are not exclusively related to transit regulation, such as in "force majeure" circumstances.295
7.207.
Canada disagrees with Ukraine's interpretation of the scope of Article V:3.296 Canada argues that the delays and restrictions covered under Article V:3 are those imposed as part of requiring "that traffic in transit be registered with [Members'] customs authorities", including "the formalities and documentation requirements that are part of entering the traffic at the proper customs house".297
7.208.
The European Union also disagrees with Ukraine's interpretation of the scope of Article V:3. The European Union argues that the delays and restrictions covered under Article V:3 are those that specifically result from the application of customs laws and regulations.298

7.6.3.3 Article V:4

7.6.3.3.1 Main arguments of the parties

7.209.
Ukraine's claims of inconsistency with Article V:4 are confined to one aspect of the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods. Specifically, Ukraine argues that the authorization requirement under the derogation procedure of the 2016 Transit Bans on Non‑Zero Duty and Resolution No. 778 Goods constitutes an "unreasonable regulation" imposed on traffic in the sense of Article V:4.299
7.210.
In Ukraine's view, whether a regulation is "unreasonable" should involve an analysis of: (a) the rationale or purpose of the measure, and (b) whether the means used to achieve that rationale are "adequate and fair".300 Ukraine consequently argues that: (a) it is unreasonable to make access for traffic in transit entirely dependent on the discretion of the government of the country of destination, (b) it is unreasonable to implement a measure that does not provide any information about what conditions need to be satisfied in order to secure authorization, and (c) the measure goes beyond what is required to ensure that goods move through and eventually leave the territory of the transit Member.301

7.6.3.4 Article V:5

7.6.3.4.1 Main arguments of the parties

7.211.
Ukraine argues that the 2016 Belarus Transit Requirements, the 2016 Transit Bans on Non‑Zero Duty and Resolution No. 778 Goods, and the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods accord less favourable treatment to traffic in transit from Ukraine compared to third countries, and therefore, that the measures are inconsistent with Article V:5.
7.212.
Ukraine proposes that, to establish inconsistency with Article V:5, it must be shown that: (a) the measure is a "regulation" that is "related to or associated with" traffic in transit; (b) there has been differential treatment accorded to traffic in transit from or to any Member as compared to third countries; (c) there has been "less favourable treatment", or a detrimental impact on the conditions of competition, for traffic in transit from the contesting Member; and (d) there is a "genuine relationship" between the measure at issue and the adverse impact on competitive opportunities.302
7.213.
Applying the foregoing analysis, Ukraine argues that each of the measures is inconsistent with Article V:5. Ukraine argues that the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods accord differential treatment on the basis of whether the traffic in transit has come from Ukraine and is going to Kazakhstan and the Kyrgyz Republic.303 Ukraine also argues that the 2016 Transit Bans on Non-Zero Duty and Resolution No778 Goods and the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods accord differential treatment on the basis of whether the traffic in transit has originated from a Resolution No. 778 country, as amended to include Ukraine, or is destined for Kazakhstan.304 Ukraine argues that this differential treatment alters the conditions of competition for traffic in transit from Ukraine as compared to third countries, and therefore accords "less favourable treatment" by: (a) creating delays and additional costs related to rerouting, (b) imposing additional costs such as those related to identification and registration cards, and (c) impeding access to the export market for which the goods are destined.305

7.6.3.5 Article X of the GATT 1994

7.6.3.5.1 Main arguments of the parties

7.214.
Ukraine's claims of inconsistency with Article X of the GATT 1994 are confined to certain instruments that implement aspects of the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods. Ukraine argues that these measures fall within the scope of Article X:1 because they affect the transportation of goods, and fall within the scope of Article X:2 because they have "regard to" or are "connected with" importation or exportation.306
7.215.
More specifically, Ukraine claims that the following legal instruments implementing aspects of the measures above were not published promptly as required by Article X:1 of the GATT 1994:

a. Public Joint-Stock Company "Russian Railways" Order No. 529r of 28 March 2016 (PJSC Order)307 and the Public Joint-Stock Company "Russian Railways" Notice of 17 May 2016 (PJSC Notice)308, both of which implement aspects of the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods. Ukraine argues that these legal instruments were inadequately published for the purposes of Article X:1, as they were only published on the website and print version of the business magazine "RZD-Partner Documents", to which only paying subscribers have access.309

b. Decree No. 319310, which extended the geographical scope of the 2016 Belarus Transit Requirements to traffic in transit from Ukraine destined for the Kyrgyz Republic, and imposed the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods. Ukraine argues that this legal instrument was not published promptly for the purposes of Article X:1, as this instrument was brought into effect on 1 January 2016, while it was published only on 3 July 2016.311

7.216.
Ukraine claims that the following legal instruments were enforced prior to their official publication, contrary to Article X:2 of the GATT 1994:

a. The PJSC Order312, because this legal instrument was inadequately published for the purposes of Article X:2, as it was only published on the website and print version of the business magazine "RZD-Partner Documents", to which only paying subscribers have access.313

b. Decree No. 319314, because this instrument was enforced on 1 January 2016, while it was officially published only on 3 July 2016.315

c. Decree No. 643316, which amended Decree No. 1317, so as to extend the duration of the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods, because this instrument was enforced on 30 December 2017, while it was only officially published on 4 January 2018.318

7.217.
Ukraine claims that the following legal instruments are administered in an unreasonable manner, contrary to Article X:3(a) of the GATT 1994:

a. Decree No. 1, as amended by Decree No. 319 and Decree No. 643, which imposes the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods, because Russia has administered these instruments at the Belarus‑Russia border without providing reasoned explanations to traders.319

b. Decree No. 319320, because the derogation procedure under this instrument contains no criteria governing the exercise of Russia's discretion to permit derogations from the bans, thereby permitting the possibility of arbitrary administration.321

7.218.
Russia argues that the scope of Article X is limited to "issues of importation, exportation, internal sale and transportation", and does not intersect with "the scope of Article V of the GATT which is limited to issues of transit".322

7.6.3.5.2 Main arguments of third parties

7.219.
Brazil argues that measures within the scope of Article V will typically qualify as "requirements, restrictions or prohibitions on imports or exports" within the sense of Article X:1.323
7.220.
Canada argues that the term "affecting their … transportation" in Article X:1 should be construed as referring to measures affecting the transportation of "products", as included in the phrase "classification or the valuation of products for customs purposes", not "imports or exports" as included in the preceding phrase "requirements, restrictions or prohibitions on imports or exports".324 Canada argues that this broader construction of Article X:1 is supported by the object and purpose of Article X, which is to promote transparency in relation to measures of general application relating to trade.325
7.221.
The European Union also argues that the term "affecting their … transportation" in Article X:1 should be construed as referring to measures affecting the transportation of "products", not "imports or exports".326 The EU agrees that this broader construction of Article X:1 is supported by the object and purpose of Article X, which is to promote transparency in relation to measures of general application relating to trade.327 The European Union notes in support of this proposition the title of Article X, which reads "Publication and Administration of Trade Regulations".328 The European Union additionally argues that, in the specific context of Article X, the term "imports" should be interpreted as "covering any goods that physically enter into the territory of the Member concerned", although conceding that in other provisions of the GATT, the term "imports" must be understood as excluding traffic in transit.329
7.222.
Japan argues that measures within the scope of Article V will typically qualify as "requirements, restrictions or prohibitions on imports or exports" within the sense of Article X:1, or alternately, as measures affecting the "distribution" or "transportation" of imports or exports.330

7.6.3.6 Russia's Accession Protocol

7.6.3.6.1 Paragraph 1161 of Russia's Working Party Report

7.6.3.6.1.1 Main arguments of the parties

7.223.
Ukraine argues that the first sentence of paragraph 1161 of Russia's Working Party Report "confirms the application of Article V of the GATT 1994" to any Russian measures governing the transit of goods.331 Consequently, Ukraine argues that it will be sufficient to establish that Russia has acted inconsistently with Article V to demonstrate inconsistency with paragraph 1161.332
7.224.
Russia does not present any arguments in response to Ukraine's claims of inconsistency with paragraphs 1161, 1426, 1427 and 1428 of Russia's Working Party Report.

7.6.3.6.2 Paragraph 1426 of Russia's Working Party Report

7.6.3.6.2.1 Main arguments of the parties

7.225.
Ukraine argues that paragraph 1426 of Russia's Working Party Report applies to a broader category of legal instruments than Article X:1 of the GATT 1994 in that it applies to any measures "pertaining to or affecting trade in goods, services, or intellectual property rights".333 Nonetheless, Ukraine submits that measures that fall within the scope of Articles V and X:1 of the GATT 1994 necessarily pertain to or affect "trade in goods" within the scope of paragraph 1426.334 Ukraine further argues that paragraph 1426 of Russia's Working Party Report and Article X:1 of the GATT 1994 "contain the same substantive obligation of prompt publication", and consequently that inconsistency with Article X:1 of the GATT 1994 will automatically imply inconsistency with paragraph 1426 of Russia's Working Party Report.335

7.6.3.6.3 Paragraph 1427 of Russia's Working Party Report

7.6.3.6.3.1 Main arguments of the parties

7.226.
Ukraine argues that Russia has violated the commitments in paragraph 1427 of Russia's Working Party Report because it has failed to publish, prior to their adoption, 20 legal instruments that implement aspects of the 2016 Belarus Transit Requirements, the 2016 Transit Bans on Non‑Zero Duty and Resolution No. 778 Goods, and the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods.
7.227.
More specifically, Ukraine claims that the following legal instruments were not published before adoption as required by paragraph 1427 of Russia's Working Party Report:

a. The PJSC Order336, which implements aspects of the 2016 Belarus Transit Requirements and the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods. Ukraine argues that this legal instrument was inadequately published for the purposes of paragraph 1427, as it was only published on the website and print version of the business magazine "RZD-Partner Documents", to which only paying subscribers have access.337

b. Several resolutions implementing the measures at issue338, as well as Decree No. 643.339 These instruments implement various aspects of the 2016 Belarus Transit Requirements, the 2016 Transit Bans on Non-Zero Duty and Resolution No. 778 Goods, and the 2014 Belarus-Russia Border Bans on Transit of Resolution No. 778 Goods. Ukraine argues that each of these legal instruments was published either after or on the date of their adoption, which Ukraine defines as the date on which the finalized measures were approved within the territory of the Russian Federation.340

7.6.3.6.4 Paragraph 1428 of Russia's Working Party Report

7.6.3.6.4.1 Main arguments of the parties

7.228.
Ukraine argues that, as with paragraph 1426 of Russia's Working Party Report, measures that fall within the scope of Article V and Article X:1 of the GATT 1994 necessarily pertain to or affect "trade in goods" within the scope of paragraph 1428.341 Ukraine further claims that paragraph 1428 "expands the scope of application and the substantive publication requirement of Article X:2 of the GATT 1994" because paragraph 1428 prohibits measures from becoming "effective" prior to publication while Article X:2 prohibits measures from being "enforced" prior to "official" publication.342 As Ukraine considers that a measure can only be "enforced" once it has been made "effective", Ukraine consequently contends that "a violation of Article X:2 automatically implies a violation of paragraph 1428."343 Ukraine proceeds to argue that the contested instruments are inconsistent with paragraph 1428 of Russia's Working Party Report for the same reasons that they are inconsistent with Article X:2 of the GATT 1994.344

7.6.4 Applicability of Article XXI(b)(iii) of the GATT 1994 to commitments in Russia's Accession Protocol

7.6.4.1 Introduction

7.229.
Ukraine makes several claims of inconsistency with Russia's Accession Protocol based on commitments contained in paragraphs 1161, 1426, 1427 and 1428 of Russia's Working Party Report.345 The Panel has already concluded that the measures at issue are covered by Article XXI(b)(iii), and consequently that it is not necessary to address each of Ukraine's claims of inconsistency with Articles V and X of the GATT 1994. The applicability of Article XXI(b)(iii) to those provisions of the GATT 1994 is explicitly contemplated by the introduction to Article XXI, which provides that "[n]othing in this Agreement shall be construed".
7.230.
Conversely, neither panels nor the Appellate Body have previously considered the applicability of Article XXI(b)(iii) of the GATT 1994 to commitments in the Accession Protocol of any acceding Member.346 Several disputes have, however, previously considered the applicability of Article XX of the GATT 1994 to individual commitments in China's Accession Protocol. The Panel considers these disputes to be relevant insofar as they inform its analysis of the relationship between a Member's Accession Protocol and provisions of the GATT 1994.
7.231.
The Appellate Body has held that the relationship between provisions in China's Accession Protocol and provisions in the WTO Agreement must be determined on a case‑by‑case basis.347 In some disputes, this analysis has led to a determination that Article XX of the GATT 1994 could be invoked to justify a breach of an independent obligation under China's Accession Protocol348, while in others, the same analysis led to a determination that Article XX could not be invoked in relation to the contested provision.349 In China – Rare Earths, the Appellate Body held that the specific relationship between individual provisions in China's Accession Protocol and provisions of the GATT 1994 must be ascertained "through scrutiny of the provisions concerned, read in the light of their context and object and purpose, with due account being taken of the overall architecture of the WTO system as a single package of rights and obligations, and any specific provisions that govern or shed light on the relationship between the provisions of different instruments".350 The Appellate Body also noted that such an assessment must be predicated on a "thorough analysis of the relevant provisions on the basis of the customary rules of treaty interpretation, as well as the circumstances of each dispute".351
7.232.
The Panel considers that the approach outlined by the Appellate Body in China – Rare Earths is equally applicable to the relationship between Russia's Accession Protocol and Article XXI(b)(iii) of the GATT 1994. In the Panel's view, the architecture of the WTO system confers a single package of rights and obligations upon Russia, of which the GATT 1994 and its Accession Protocol are constituent parts. In particular, where obligations under Russia's Accession Protocol are closely linked to obligations under the GATT 1994, the Panel considers that this constitutes a strong argument for the applicability of Article XXI(b)(iii) to such commitments.
7.233.
The Panel proceeds to apply the analytical framework outlined by the Appellate Body to determine the applicability of Article XXI(b)(iii) to the commitments in individual provisions of Russia's Working Party Report.352 In doing so, the Panel considers: (a) the text of each provision, as well as any express textual references, or lack thereof, to the GATT 1994 or other covered agreements; (b) the context provided by other relevant provisions in Russia's Accession Protocol and Working Party Report; (c) the content of each provision and its relationship to obligations under the GATT 1994; (d) the overall architecture of the WTO system as a single package of rights and obligations; and (e) the specific circumstances of this dispute.353

7.6.4.2 Paragraph 1161 of Russia's Working Party Report

7.6.4.2.1 Paragraph 1161 of Russia's Working Party Report and Article XXI(b)(iii) of the GATT 1994

7.234.
Paragraph 1161 of Russia's Working Party Report provides, in relevant part, that:

The representative of the Russian Federation confirmed that the Russian Federation would apply all its laws, regulations and other measures governing transit of goods (including energy), such as those governing charges for transportation of goods in transit by road, rail and air, as well as other charges and customs fees imposed in connection with transit, including those mentioned in paragraphs 1155 and 1156 in conformity with the provision of Article V of the GATT 1994 and other relevant provisions of the WTO Agreement.

7.235.
Paragraph 1161 requires Russia to apply certain measures in "conformity with the provisions of Article V of the GATT 1994 and other relevant provisions of the WTO Agreement".354 The explicit textual reference to "other relevant provisions of the WTO Agreement" provides support for the applicability of other provisions of the covered agreements. Additionally, the ordinary meaning of the term "relevant" is whether such provisions have a "bearing on" or are "connected with" the matter, or are "legally pertinent or sufficient".355 Applying this definition, the Panel considers that other provisions of the covered agreements will be "relevant" to paragraph 1161 provided that they have a demonstrable legal bearing upon Article V of the GATT 1994. Article XXI(b)(iii) clearly falls within this definition, as it is directly applicable to Article V of the GATT 1994 through the phrase "[n]othing in this Agreement shall be construed".
7.236.
The immediate context provided by the other provisions of Russia's Working Party Report also informs the interpretation of paragraph 1161, particularly those discussions under the shared subheading "Regulation of Trade in Transit". The Panel observes that, for instance, in paragraph 1160 of Russia's Working Party Report, the representative for Russia confirmed that in relation to certain bans on transit, "in general, such provisions were applied for reasons of safety, health or national security."356 There is no record of any Members contesting or objecting to this assertion.
7.237.
Finally, the content of paragraph 1161 of Russia's Working Party Report and its relationship to obligations under the GATT 1994 is also relevant to the Panel's analysis.357 The Panel observes that the commitments in paragraph 1161 and obligations under the GATT 1994 are closely linked in that paragraph 1161 requires Russia to apply measures governing transit of goods "in conformity" with Article V of the GATT 1994. If Article XXI(b)(iii) were inapplicable to this provision, this could thus potentially allow Ukraine to succeed on a claim of inconsistency with commitments in Russia's Accession Protocol, and not an identical claim under the GATT 1994.
7.238.
For these reasons, the Panel considers that Russia can rely on the phrase "other relevant provisions of the WTO Agreement"in order to justify any inconsistency with the commitments in paragraph 1161 of Russia's Working Party Report as necessary for the protection of its essential security interests taken in time of an "emergency in international relations" within the meaning of Article XXI(b)(iii) of the GATT 1994.

7.6.4.2.2 Paragraph 1161 of Russia's Working Party Report and Article V:2 of the GATT 1994

7.239.
The Panel recalls its conclusion that, had the measures been taken in normal times, every aspect of them would have been prima facie inconsistent with either the first or second sentence of Article V:2 of the GATT 1994, or both. Based on the foregoing analysis, the Panel considers that paragraph 1161 of Russia's Working Party Report merely reiterates Russia's commitments under Article V of the GATT 1994. Moreover, the Panel recalls that Ukraine's claims under paragraph 1161 of Russia's Working Party Report are substantively identical to Ukraine's claims under Article V.358
7.240.
The Panel therefore considers 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)), the measures would have also been prima facie inconsistent with paragraph 1161 of Russia's Working Party Report to the extent that they would also be prima facie inconsistent with either the first or second sentence of Article V:2 of the GATT 1994, or both.

7.6.4.3 Paragraph 1426 of Russia's Working Party Report and Article XXI(b)(iii) of the GATT 1994

7.241.
Paragraph 1426 of Russia's Working Party Report provides, in relevant part, that:

The representative of the Russian Federation confirmed that from the date of accession, all laws, regulations, decrees, decisions, judicial decisions and administrative rulings of general application pertaining to or affecting trade in goods, services, or intellectual property rights, whether adopted or issued in the Russian Federation or by a competent body of the CU, would be published promptly in a manner that fulfils applicable requirements of the WTO Agreement, including those of Article X of the GATT 1994, WTO GATS Agreement, and the WTO TRIPS Agreement.