Is the "self-judging" security exception no more self judging? Have successive panel interpretations essentially made it an objective test that the panel decides? Is it a case of reading too much into the treaty provisions or is it a recognition that judicial interpretation invariably leads to an objective assessment of facts in the context of the provisions of law.
These rather obvious questions came up when reading the WTO panel report in Saudi Arabia - Protection of Intellectual Property Rights (WT/DS567/R) blogged about earlier here, especially the security exception defence that Saudi Arabia put up under Article 73 of the TRIPS Agreement.
Saudi Arabia claimed that the measures at issue which were challenged by Qatar were justifiable under the security exceptions provisions of the TRIPS Agreement.
Article 73(b)(iii) of the TRIPS Agreement which mirrors other security exception clauses in WTO Agreements states that Members are not prevented from taking any action which it considers necessary for the protection of its essential security interests taken in time of war or other emergency in international relations.
This looks apparently "self judging" - in terms of the final arbiter of what constitutes security interest and what measures need to be taken to achieve them. The Member can take ANY action which IT CONSIDERS NECESSARY for the protection of ITS ESSENTIAL SECURITY INTERESTS. Therefore is this right an unfettered one? Can the the actions be called into question for not being necessary? Can the issue of whether an emergency in international relations exists be subject of debate? Or can there be a determination that it has no relation to its essential security interest? Or can the Member's claim of an essential security interest itself be subject to adjudication? What are the thresholds or parameters to determine each of these requirements?
Yes, all of this can be subject to a panel determination so what seems to be a rather discretionary provision is in effect rendered subject to an objective assessment of the facts and circumstances by a panel.
The panel in the Saudi Arabia dispute went threadbare into all of these factors.
On the existence of an emergency in international relations, the Panel held:
7.262. Saudi Arabia's severance of all diplomatic, consular and economic ties with Qatar, viewed in the context of similar actions taken by several other nations and the relevant history recounted in this Report, falls into the category of cases in which such action can be characterized in terms of an exceptional and serious crisis in the relations between two or more States.
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7.270. The Panel thus concludes that the measures that, directly or indirectly, have had the result of preventing beIN from obtaining Saudi legal counsel to enforce its IP rights through civil enforcement procedures before Saudi courts and tribunals (i.e. anti-sympathy measures), and Saudi Arabia's non-application of criminal procedures and penalties to be applied to beoutQ, were "taken in time of war or other emergency in international relations".
There were two measures that Saudi Arabia specifically took in relation to the Qatari firm - one was denying access to legal counsel (law firms in Saudi Arabia to beIN) in civil intellectual property infringement proceedings in Saudi Arabia. Second, criminal proceedings against beoutQ were not initiated for intellectual property violations in Saudi Arabia.
Interestingly the panel made a distinction between the denial of legal counsel in Saudi Arabia and the non-prosecution in criminal proceedings.
In case of access to legal counsel, the Panel held:
7.286. The measures aimed at denying Qatari nationals access to civil remedies through Saudi courts may be viewed as an aspect of Saudi Arabia's umbrella policy of ending or preventing any form of interaction with Qatari nationals. Given that Saudi Arabia imposed a travel ban on all Qatari nationals from entering the territory of Saudi Arabia and an expulsion order for all Qatari nationals in the territory of Saudi Arabia as part of the comprehensive measures taken on 5 June 2017, it is not implausible that Saudi Arabia might take other measures to prevent Qatari nationals from having access to courts, tribunals and other institutions in Saudi Arabia. Indeed, it is not implausible that, as part of its umbrella policy of ending or preventing any form of interaction with Qatari nationals, as reflected through, inter alia, its 5 June 2017 travel ban intended to "prevent[] Qatari citizens' entry to or transit through the Kingdom of Saudi Arabia", which forms part of Saudi Arabia's "comprehensive measures", Saudi Arabia might take various formal and informal measures to deny Saudi law firms from representing or interacting with Qatari nationals for almost any purpose.
However, the panel found that there was no relation between the measures Saudi Arabia took in case of non-prosecution of criminal proceedings for the following reasons:
7.289. In the Panel's view, however, the same conclusion cannot be reached regarding the connection between Saudi Arabia's stated essential security interests and its authorities' non-application of criminal procedures and penalties to beoutQ. In contrast to the anti-sympathy measures, which might be viewed as an aspect of Saudi Arabia's umbrella policy of ending or preventing any form of interaction with Qatari nationals, the Panel is unable to discern any basis for concluding that the application of criminal procedures or penalties to beoutQ would require any entity in Saudi Arabia to engage in any form of interaction with beIN or any other Qatari national.
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7.293. The Panel concludes that the non-application of criminal procedures and penalties to beoutQ does not have any relationship to Saudi Arabia's policy of ending or preventing any form of interaction with Qatari nationals. Therefore, the Saudi authorities' non-application of criminal procedures and penalties to beoutQ is so remote from, or unrelated to, the "emergency in international relations" as to make it implausible that Saudi Arabia implemented these measures for the protection of its "essential security interests". As a consequence, the Panel concludes that the non-application of criminal procedures and penalties to beoutQ does not "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".
Thus, it found one set of measures consistent with the security exception while finding the other inconsistent.
The Panel looked at the measures in detail, analysed their impact as well as made an assessment whether they had any relationship with the essential security interest that Saudi Arabia had espoused.
Therefore, WTO members can no longer be confident that their measures would satisfy the national security exception simply because they undertook them in their assessment and were convinced that it was done to protect their essential security interests. An assessment made internally by a set of policy makers may not necessarily fulfil the obligations under the WTO agreements. Subjective assessment has to give way to and objective assessment of the need for such measures as well as their relation to the overall purpose of national security. The legal standard set forth as well as the co-relation between the measure and the stated objective should be clear. Security exceptions are no longer the magic wand to impact trade.
Nations using the security exception may want to be bit more weary than before. But of course, there is long time between a measure and when it gets declared inconsistent at the WTO. With more countries invoking the national security exception in the context of growing trade tensions, security interests and trade wards, are we going to see the scope of the provisions being expounded even further by dispute settlement panels?
7.268. The Panel recalls that the WTO dispute settlement system is not meant "to encourage either panels or the Appellate Body to 'make law' by clarifying existing provisions of the WTO Agreement outside the context of resolving a particular dispute". In the light of its findings above, the Panel does not consider it necessary to rule on certain issues discussed by the parties or third parties about how a panel should proceed in a case where it is not persuaded that an "emergency in international relations" exists, or is presented with an insufficient basis upon which to make any determination of that issue. The Panel has found, on the basis of the facts in this dispute, that an "emergency in international relations" exists in this case.
This made in the context of deciding on an issue that was not required in the context of the case and seems justified. However, how about interpreting the provisions of the text to enable a more deeper assessment of the measures at issue - would that not tantamount to making law?
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