Interpretation of the Security Exception in WTO ‎in the Light of the Panel Report in Russia-‎Ukraine Dispute‎

World Trade Organization was founded with the purpose of freeing the trade between its members, in accordance with the principles of guaranteeing free trade among its members, the reduction of tariffs, the elimination of all forms of trade discrimination, and the transparency of trade laws and regulations. Nevertheless, the freedom of trade without any limits would concern the countries for their sovereignty and national security. Therefore, beside the general exceptions embodied in article 20, the article 21 of GATT was drafted under the title of security exceptions. This article reads as follows:“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 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 contracting party from taking any action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.”   From the very beginning of the entry of GATT into force in 1947, until the foundation of WTO and thereafter, the interpretation of article 21 has been a subject of debate between the States and in the relevant literature. The main question in the interpretation of this article is to what extent the State-parties to GATT 1947 (and the members of WTO) have the freedom to invoke article 21, specifically, its paragraph (b). Can refraining by a State from its obligations by invoking this article be objected by other States or assessed by the Dispute Settlement Body (DSB)? We have suggested in this article that security exceptions are not specific to GATT and that several investment treaties, such as the Treaty of Amity, Economic Relations and Consular Rights between Iran and USA, also include similar exceptions. Nevertheless, in a general categorization, the security exceptions are drafted in two different methods. In the first, the language used for the security exception implies a degree of autonomy for States in recognizing security emergency and invoking it. The article 21 of GATT, as can be easily attested, falls in this category. Without using ancillary principles of interpretation, a reader could not reasonably assume any limit for the State’s discretion in invoking the security exception. The first method has thus been called the “self-judging” wording. In the second method, the language used in a treaty does not imply any self-judging property for the security exception. Article 20-1 of the Treaty of Amity between Iran and the USA has been drafted in this latter method. Through the negotiations of GATT in 1947, the security exception was inserted following a proposal from the USA. The history of drafting and resolution of this article shows that it has been found ambiguous from the outset of its drafting. At the 1947 and 1994 rounds, a number of different interpretations for article 21 have been presented. According to one interpretation, any State has full autonomy to recognize national emergency and to legitimately invoke article 21, and such autonomy cannot be objected by other States or assessed by the DSB. According to a second interpretation, although States have full autonomy to recognize national emergency, they shall observe good faith while invoking article 21. In accordance to a third interpretation, although States can themselves determine their security interests, the legitimacy of their invoking of article 21 can, without any boundaries, be retrospectively assessed by the DSB. The thesis proposed in this article is that the first interpretation is not acceptable as the State-parties cannot have limitless freedom to invoke article 21 and that the legitimacy of invoking this article can be assessed by the DSB by considering objective standards, such as good faith. The DSB itself acknowledged the same approach in Russia- Measures Concerning Traffic in Transit. In this case, the panel primarily considered whether it has the jurisdiction to qualify the legitimacy of invoking article 21by Russia. The panel reasoned that since the article 21(b) enumerates a limited number of scenarios, the members can only invoke that paragraph in the event one of those scenarios occur. In addition, the panel found that the emergency circumstances are objective in nature. This objectivity confers the panel to assess the legitimacy of invoking paragraph (b). Since the resources for this study include essays, books and the awards rendered by the DSB, this article first briefly reviews the sources using library research and,then, using descriptive analytic method, attempts to examine the core of the controversy, explore the history of its emergence and evolution, and evaluate the contending readings involved, analyzing both the views submitted in the literature  and the positions adopted practically by the States and the DSB.