¹ The move was, allegedly, dictated by the administration’s concerns over the Convention on the Elimination of Discrimination against Women, 18 December 1979, 1249 UNTS 13 (entered into force 3 September 1981); and the Convention on the Rights of the Child, 20 November 1989, 1577 UNTS 3 (entered into force 2 September 1990). “A Trump Moratorium on International Treaties Could Roll Back Human Rights — Here at Home,” Washington Post (1 March 2017), online: <https://wapo.st/2NZ5nhp>.

² Kristen Boon, “President Trump and the Future of Multilateralism” (2017) 31 Emory Intl L Rev 1075; Jack Goldsmith, “The Trump Onslaught on International Law and Institutions,” Lawfare (17 March 2017), online: <https://bit.ly/2nrmCwZ>; Kate Brannen, “10 Times President Trump’s Wishes Have Been Thwarted,” Newsweek (5 November 2017).

³ Arman Sarvarian & Filippo Fontanelli, “The USA and Re-Appointment at the WTO: A ‘Legitimacy Crisis’?” EJIL: Talk!, online: <https://bit.ly/2JiBI4q>; “United States Blocks Reappointment of WTO Appellate Body Member” (2016) 110:3 AJIL 573; see also John Brinkley, “Trump Is Quietly Trying to Vandalize the WTO,” Forbes (27 November 2017); Kirtika Suneja, “US Blocking Appointment to Key WTO Body, Trump May Soon Be the Only Winner in Any Trade Dispute,” Economic Times (6 March 2018). However, for criticism of the WTO Appellate Body, see Arthur E Appleton, “Judging the Judges or Judging the Members? Pathways and Pitfalls in the Appellate Body Appointment Process” in Leïla Choukroune, ed, Judging the State in International Trade and Investment Law: Sovereignty Modern, the Law and the Economics (Singapore: Springer, 2016) 11.

⁴ North American Free Trade Agreement, 17 December 1992, 32 ILM 289, 605 (1993) [NAFTA]; “NAFTA: ‘Single Worst Deal Ever Approved’” BBC News (27 September 2016), online (video): <https://bbc.in/2uRWCN2>; Phil Levy, “Trump’s NAFTA Withdrawal Threat Is Real,” Forbes (22 January 2018).

⁵ Alex Ward, “Trump Said ‘NATO Is As Bad As NAFTA.’ That’s Scary,” Vox (28 June 2018), online: <https://bit.ly/2N77LC3>. Joe Sommerlad, “Why Is Donald Trump So Hostile to NATO and Are His Claims Justified?” The Independent (11 July 2018).

⁶ Bob Bryan, “Trump’s Trade War Is about to Kick into High Gear,” Business Insider (13 June 2018); Joe Gamp, “US Trade War: Trump Launches Five WTO attacks on EU, China, Mexico, Canada and Turkey,” Express (16 July 2016).

⁷ US Department of State, Press Statement: The United States Withdraws from UNESCO (2017).

⁸ Paris Agreement, 12 December 2015, Can TS 2016 No 9 (entered into force 4 November 2016); Michael D Shear, “Trump Will Withdraw US from Paris Climate Agreement,” New York Times (20 January 2018).

⁹ Laura Koran, “US Leaving UN Human Rights Council: ‘A Cesspool of Political Bias’,” CNN (20 June 2018).

¹⁰ White House, National Security Presidential Memorandum 11: Ceasing United States Participation in the Joint Comprehensive Plan of Action and Taking Additional Action to Counter Iran’s Malign Influence and Deny Iran All Paths to a Nuclear Weapon (8 May 2018) [NSPM-11].

¹¹ Joint Comprehensive Plan of Action, UN Security Council Resolution 2231(2015) (14 July 2015), Annex A [JCPOA].

¹² International Atomic Energy Agency, Iran Is Implementing Nuclear-related JCPOA Commitments, Director General Amano Tells IAEA Board (2018), online: <https://bit.ly/2raKfur>.

¹³ United Nations Security Council Resolution 2231, UN Doc S/RES/2231 (2015) (14 July 2015).

¹⁴ Dion Nissenbaum, “White House Sought Options to Strike Iran,” Wall Street Journal (14 January 2019), online: <https://on.wsj.com/2Clg09b>.

¹⁵ EC Regulation 2271/96 Protecting against the Effects of the Extra-Territorial Application of Legislation Adopted by a Third Country, and Actions Based Thereon or Resulting Therefrom, 29 November 1996, OJ L309. Under the Regulation’s Annex on relevant non-European Union (EU) legislation, the EU obliges its entrepreneurs to notify the Commission about extraterritorial consequences of the US sanctions (art 2). EU persons are prohibited from complying with such measures (art 5), and foreign court judgments or administrative decisions adopted on their basis are rendered void in the EU (art 4). Finally, European entrepreneurs are entitled to recover damages caused by the application of sanctions (art 6). Damages are to be recovered from “the natural or legal person or any other entity causing the damages or from any person acting on its behalf or intermediary,” which actually makes it unclear who should be thus liable for actions of the US government. Also, since the United States could impose sanctions against EU actors that violate the secondary sanctions, the EU did not want to act to the detriment of its own citizens. Accordingly, the Commission may authorize a partial or full waiver of the non-compliance duty (art 5). Taken together, the blocking statute is more of a political signal than an instrument that will actually neutralize the US sanctions.

¹⁶ When parties to a transaction wish to transfer assets between banks (money, securities), the financial institutions involved may rely upon two electronic transfer systems: in “real time” (that is, on a gross basis) or by the end of the working day (on a net basis). Most regular payments are batched with other transactions throughout the day and, by its end, cleared and settled. Here, the settlement is cheaper but requires time. Alternatively, in real-time gross settlement (RTGS) systems, individual transactions (gross, without netting) are final and irrevocable (that is, settled immediately). RTGS systems are typically used for high-value transactions or transactions that need to be settled immediately. Because of the liquidity necessary to operate such a settlement system, and, hence, the settlement and credit risks involved, RTGS systems are operated by central banks as the issuers of currency. In international payments, transactions may involve settlement by more than one RTGS system (for example, TARGET2 operated by the European Central Bank or Fedwire of the US Federal Reserve). This means high-value bank transfers denominated in US dollars will require settlement by Fedwire. At the same time, thanks to a SWIFT number, participants in Fedwire can transfer payments directly (non-member banks can do so through a US bank or another foreign bank that is a Fedwire participant), which gives a huge advantage to US currency-denominated international payments, due to the sheer number of participants. Although some other jurisdictions aspire to become an international settlement currency (notably the Euro and Chinese renminbi), and electronic funds transfers are ever more available to consumers, the dominant position of the US dollar has not been undermined. By imposing, “for systematic violation of US sanctions,” a fine of some US $9 billion on BNP Paribas (and some other banks) and prohibiting the bank from accessing the US settlement systems (Fedwire and Chip), the United States has already showed that it will not hesitate to use this leverage. At the time, some argued that the abuse of this measure could be decisive for renouncing the US dollar as an international clearing currency or the establishment of offshore settlement facilities, but, even in the latter case, the “underlying transactions would still need to be settled in New York.” Frances Coppola, “Fedwire: The US Dollar in International Payments,” American Express (2016), online: <https://amex.co/2HjvtKI>.

¹⁷ Treaty of Amity, Economic Relations, and Consular Rights, 16 June 1957, 284 UNTS 93 [Treaty of Amity].

¹⁸ General Agreement on Trade in Services, 15 April 1994, 1869 UNTS 183 (entered into force 1 January 1995) [GATS].

¹⁹ On secondary sanctions under customary international law, see Jeffrey Meyer, “Second Thoughts on Secondary Sanctions” (2009) 30:3 U Pa J Intl L 905.

²⁰ See generally Forlati, Laura Picchio & Sicilianos, Linos-Alexandre, Les sanctions économiques en droit international. Economic sanctions in interntional law (Leiden: Nijhoff, 2004);Google Scholar Menkes, Marcin J, Stosowanie sankcji gospodarczych: analiza prawnomiędzynarodowa (Toruń: Wydawnictwo Adam Marszałek, 2011).Google Scholar

²¹ White House, Statements and Releases: Statement by the President on the Iran Nuclear Deal (12 January 2018).

²² NSPM-11, supra note 10.

²³ National Defense Authorization Act for Fiscal Year 2012, Pub L No 112-81 (2011); Iran Sanctions Act, Pub L No 104-172, 110 Stat 1541 (1996), as amended through Pub L No 114–277 (2016) [Iran Sanctions Act]; Iran Threat Reduction and Syria Human Rights Act of 2012, Pub L No 112–158; Iran Freedom and Counterproliferation Act of 2012, Pub L No 112-239 (2013).

²⁴ US Department of the Treasury, Frequently Asked Questions Regarding the Re-Imposition of Sanctions Pursuant to the May 8, 2018 National Security Presidential Memorandum Relating to the Joint Comprehensive Plan of Action (JCPOA) (2018).

²⁵ Reimposing Certain Sanctions with Respect to Iran, New Iran Executive Order 13846, 6 August 2018. By virtue of this order, the president re-imposed relevant provisions of Executive Order 13574 of 23 May 2011 (superseded by) Executive Order 13590 of 20 November 2011 (relating to the development of petroleum resources); Executive Order 13622 of 30 July 2012 (financial sanctions on foreign financial institutions found to have knowingly conducted or facilitated any significant financial transactions); and Executive Order 13645 of 3 June 2013, which had been revoked by Executive Order 13716 of 16 January 2016 (inter alia, concerning transactions involving the rial). Consistent with guidance issued by the Department of the Treasury on 8 May 2018, the New Iran executive order re-imposes specified sanctions relating to Iran following relevant wind-down periods — that is, on or after 7 August 2018 or 5 November 2018, depending on the activity involved. Furthermore, the new Iran executive order revokes Executive Orders 13716 and 13628 and continues, in effect, the sanctions authorities provided for in those executive orders. The new Iran executive order also broadens the scope of certain provisions contained in those executive orders (see US Department of the Treasury, supra note 24, notably questions 601, 621.)

²⁶ NSPM-11, supra note 10, s 6(c).

²⁷ The Iranian Financial Sanctions Regulations, 31 CFR, pt 560 [IFSR], provides statutory definitions of “US financial institutions, foreign financial institutions, [engaging] knowingly, significant [transaction or financial service].”

²⁸ Ibid.

²⁹ Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010, Pub L 111–195, 124 Stat 1312; International Emergency Economic Powers Act, Pub L 95–223, 91 Stat 1626 (1977).

³⁰ White House, Statement from the President on the Designation of the Islamic Revolutionary Guard Corps as a Foreign Terrorist Organization (8 April 2019).

³¹ Lesley Wroughton & Humeyra Pamuk, “U.S. to End All Waivers on Imports of Iranian Oil, Crude Price Jumps,” Reuters (2019), online: <https://reut.rs/2VjbIKK>.

³² Joint Plan of Action, 24 November 2013, online: <https:// www.treasury.gov/resource-center/sanctions/Programs/Documents/jpoa.pdf>.

³³ For a comprehensive overview of the JCPOA’s provisions, see Arms Control Association, The Joint Comprehensive Plan of Action (JCPOA) at a Glance (Washington, DC: Arms Control Association, 2018), online: <https://bit.ly/2rrNekO>..>Google Scholar

³⁴ Vienna Convention on the Law of Treaties, 23 May 1969, 1155 UNTS 331 (entered into force 27 January 1980) [VCLT]. For the purposes of this article, I assume that the relevant provisions of the VCLT reflect customary treaty law; hence, it can also be used in respect of the United States and Iran, notwithstanding their ratification status.

³⁵ Hersch Lauterpacht, “Report of the Special Rapporteur (A/CN.4/63)” [1953] 2 ILC Yearbook 90 at 96–98; Arnold Duncan McNair, The Law of Treaties (Oxford: Clarendon Press, 1986) at 6.

³⁶ JCPOA, supra note 11, preamble, para i.

³⁷ Ibid at para v.

³⁸ Lauterpacht, supra note 35 at 96–98.

³⁹ JCPOA, supra note 11, preamble, para viii.

⁴⁰ A distinction important from the domestic, constitutional law perspective. Marci Hoffman, “Treaties and International Agreements,” Berkley Law Research Guide (19 June 2013), online: <https://bit.ly/2XVo4ax>.

⁴¹ See literature provided by Michael Ramsey, “Does the Iran Deal Bind the Next President?,” Originalism Blog (15 September 2015), online: <https://bit.ly/2KKzE5o>.

⁴² Felicia Schwartz, “Iran Nuclear Deal, If Reached, Wouldn’t Be ‘Legally Binding,’ Kerry Says,” Wall Street Journal (12 March 2015), online: <https://on.wsj.com/2m8SKU9>.

⁴³ Joel Gehrke, “State Department: Iran Deal Is Not ‘Legally Binding’ and Iran Didn’t Sign It,” National Review (2015), online: <https://bit.ly/2ru7PTe>.

⁴⁴ Maritime Delimitation and Territorial Questions between Qatar and Bahrain (Qatar v Bahrain), Judgment on Jurisdiction and Admissibility, [1994] ICJ Rep 112.

⁴⁵ Obligation to Negotiate Access to the Pacific Ocean (Bolivia v Chile), [2018] ICJ Rep 153.

⁴⁶ Fitzmaurice, Gerald, The Law and Procedure of the International Court of Justice, vol 1 (Cambridge, UK: Grotius, 1986) at 8, 67.Google Scholar

⁴⁷ Charter of the United Nations, 26 June 1945, 1 UNTS 15 (entered into force 24 October 1945).

⁴⁸ Military and Paramilitary Activities in and against Nicaragua (Nicaragua v United States of America), Merits, [1986] ICJ Rep 14 [Nicaragua].

⁴⁹ Resolution 2231(2015), supra note 13 at para 10.

⁵⁰ Ibid at para 11.

⁵¹ Jean Galbraith, “The End of the Iran Deal and the Future of the Security Council Snapback,” Opinio Juris (9 May 2018), online: <https://bit.ly/2KUVPSY>.

⁵² JCPOA, supra note 11 at para 2.1, in conjunction with Annex II, para 4.

⁵³ Ibid at paras 7.1–7.2.

⁵⁴ Ibid at paras 4.1.1–4.1.5, 4.1.7, 4.5.1.

⁵⁵ Resolution 2231(2015), supra note 13 at para 1.

⁵⁶ UN Department of Global Communications, “Drafting Resolutions,” online: Model United Nations <https://bit.ly/2CiMIIX>.

⁵⁷ Estimate by Stephen Wiles, “Iran-US Claims Tribunal” Harvard Law School Research Guide (4 December 2018), online: <https://bit.ly/2uDYb10>.

⁵⁸ Certain Iranian Assets (Islamic Republic of Iran v United States of America), Preliminary Objections (13 February 2019), online: <https://www.icj-cij.org/files/case-related/164/164-20190213-JUD-01-00-EN.pdf>; Alleged Violations of the 1955 Treaty of Amity, Economic Relations, and Consular Rights (Islamic Republic of Iran v United States of America), “Application Instituting Proceedings Submitted by Islamic Republic of Iran” (16 July 2018), online: <https:// www.icj-cij.org/files/case-related/175/175-20180716-APP-01-00-EN.pdf>.

⁵⁹ Treaty of Amity, supra note 17.

⁶⁰ Edward Wong & David E Sanger, “U.S. Withdraws from 1955 Treaty Normalizing Relations with Iran,” New York Times (26 November 2018).

⁶¹ Case Concerning Oil Platforms (Islamic Republic of Iran v United States of America), Preliminary Objections, Judgment, [1996] ICJ Rep 803.

⁶² Treaty of Amity, supra note 17, art I.

⁶³ Ibid, art IV(1); Sacerdoti, Giorgio, “The Application of BITs in Time of Economic Crisis: Limits to Their Coverage, Necessity and the Relevance of WTO Law” in Acconci, Pia et al, eds, General Interests of Host States in International Investment Law (Cambridge, UK: Cambridge University Press, 2014) 3 at 6–7.CrossRefGoogle Scholar

⁶⁴ Treaty of Amity, supra note 17, art IV(4).

⁶⁵ Ibid, art VIII(2).

⁶⁶ Ibid, arts VII(1)–(3).

⁶⁷ Ibid, arts XX(1)(a) (that is, part of sanction no. 2 listed above), XX(1)(b).

⁶⁸ Ibid, arts VIII(4), VII(1)(b).

⁶⁹ Ibid, art XX(1)(d).

⁷⁰ On the controversy concerning the broadening of US jurisdiction to conduct outside the United States of foreign residents of the United States and foreign businesses controlled by US interests, to transactions outside the United States involving goods and technology of US origin, and to conduct outside the United States that merely has effects within the United States for the purposes of secondary sanctions (extraterritorial application of sanctions, exorbitant jurisdiction), see Nicholas Davidson, “U.S. Secondary Sanctions: The U.K. and EU Response” (1998) 27 Stetson L Rev 1425.

⁷¹ Articles of Agreement of the International Monetary Fund, 27 December 1945, 2 UNTS 39 [Articles of Agreement].

⁷² Ibid, arts VIII(2)(a), VIII(3).

⁷³ Restrictions upon the latter are not prohibited under International Monetary Fund (IMF) law, which, however, cannot be abused to circumvent provisions concerning current transactions. Articles of Agreement, supra note 71, art VI(3).

⁷⁴ IMF Executive Board, Decision no 1034-(60/27) (1 June 1960).

⁷⁵ Ibid.

⁷⁶ IMF, Annual Report on Exchange Arrangements and Exchange Restrictions (2016) at 22–23.

⁷⁷ IMF Executive Board, Decision no 144-(52/51) (14 August 1952).

⁷⁸ By virtue of secondary sanctions, the sanctioning state (here, the United States) exerts economic pressure upon third-state entities in order to discourage the latter from dealings with the sanctioned state (here, Iran). Formally, secondary sanctions are addressed to domestic bodies and prohibit them from business dealings with third-state entities cooperating with the sanctioned state. The most important leverage here is composed of US financial institutions, including settlement systems of US dollar-denominated international payments. As mentioned above, depriving one from access to the US financial market may have major implications for any internationally active entity. US Department of the Treasury, supra note 24 at 6–7.

⁷⁹ GATS does not affect rights and duties under the Articles of Agreement, notably when restrictions on capital transactions are adopted at the request of the IMF, “provided that a Member shall not impose restrictions on any capital transactions inconsistently with its specific commitments” (GATS, supra note 18, art XI(2)). Aside from this substantive link to the IMF’s Articles of Agreement, there is a procedural link in cases of serious BoP difficulties, monetary reserve problems or foreign exchange arrangements. General Agreement on Tariffs and Trade 1994, 15 April 1994, 1867 UNTS 187 (entered into force 1 January 1995), art XV(2) [GATT]; GATS, ibid, art XII. By virtue of the article, WTO members are obliged to (1) consult on said matters with the IMF; (2) accept IMF statistical and factual findings; and (3) accept the determination of the IMF as to whether the action in question in exchange matters is in accordance with the IMF Articles of Agreement. In practice, the cooperation is not, however, full or automatic. WTO dispute settlement panels at the very least shield their right to make an autonomous determination (e.g., Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WTO Doc WT/DS56/R, Panel (25 November 1997) at paras VI.B.3.297–305; India – Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products, WTO Doc WT/DS90/R, Panel (6 April 1999) at paras V.490–91; Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WTO Doc WT/DS302/R, Panel (26 November 2004) at paras VII.139–41). See “Cooperation between the IMF and the WTO,” Background Document 2 in S Schadler, L Hui Tan & Y Seok-Hyun, IMF Involvement in International Trade Policy Issues (Washington, DC: IMF, 2009) 58 at paras 12–21. In addition, the OECD Liberalisation Codes do not alter the obligations undertaken by virtue of the IMF Articles of Agreement, or other multilateral international agreements (common Article 4). A contrario, should the IMF consider restrictions legitimate in light of member state obligations, it would create a corresponding presumption under the codes. Yet, one should not forget that the IMF Executive Board, which would hear any complaint on the US restrictions, adopts decisions in accordance with the weighted distribution of voting power.

⁸⁰ OECD, Code of Liberalisation of Capital Movements, Doc No OECD/C(61)96 (12 December 1961) [CMC]; OECD, Code of Liberalisation of Current Invisible Operations, Doc No OECD/C(61)95 (12 December 1961) [CIOC].

⁸¹ CIOC, supra note 80, art 1(a): “Members shall eliminate between one another, in accordance with the provisions of Article 2, restrictions on current invisible transactions and transfers, hereinafter called ‘current invisible operations.’ Measures designed for this purpose are hereinafter called ‘measures of liberalisation.’”

⁸² CMC, supra note 80, art 1(a): “Members shall progressively abolish between one another, in accordance with the provisions of Article 2, restrictions on movements of capital to the extent necessary for effective economic co-operation. Measures designed to eliminate such restrictions are hereinafter called ‘measures of liberalisation.’”

⁸³ CMC, supra note 80, art I(d); CIOC, supra note 80, art I(d). In accordance with the Liberalisation Codes, members shall endeavour to extend the measures of liberalisation to all members of the IMF. Numerous OECD publications of a non-binding character (leaflets, websites, and so on) contain statements that this has occurred. However, I was unable to obtain any documents from the IMF legal department confirming that such acts have taken place or, more importantly, their scope.

⁸⁴ Organisation for Economic Co-operation and Development (OECD), OECD Codes of Liberalisation: User’s GUIDE 2008 (2007) at 23.

⁸⁵ CMC, supra note 80, art 3; CIOC, supra note 80, art 3.

⁸⁶ On the legality under WTO law of US secondary (Iranian) sanctions adopted in 2012, see S Singh, “WTO Compatibility of United States’ Secondary Sanctions Relating to Petroleum Transactions with Iran,” Centre for WTO Studies, Indian Institute of Foreign Trade, Working Paper CWS/WP/200/1 (28 June 2012).

⁸⁷ GATT, supra note 79.

⁸⁸ GATS, supra note 18, arts II, XVII.

⁸⁹ Ibid, art XVII.

⁹⁰ Understanding on Commitments in Financial Services, WTO Doc LT/UR/U/1 (15 April 1994).

⁹¹ GATS, supra note 18, arts XIV(a), XIVbis(1).

⁹² Anne van Aaken & Jürgen Kurtz, “Prudence or Discrimination? Emergency Measures, the Global Financial Crisis and International Economic Law” (2009) 12:4 J Intl Econ L 859 at 873.

⁹³ Such a duty does not appear in the text of document, even though it has been accepted in the organization’s practice.

⁹⁴ And yet it seems that a procedural breach not only does not entail legal responsibility but also does not have legal importance for the purposes of sanctions legality analysis.

⁹⁵ Susan Rose-Ackerman & Benjamin Billa, “Treaties and National Security” (2008) 40 NYU J Intl L & Pol 437.

⁹⁶ Sacerdoti, supra note 63 at 9.

⁹⁷ See Yannaca-Small, K, “Essential Security Interests under International Investment Law” in OECD, ed, International Investment Perspectives: Freedom of Investment in a Changing World (Paris: OECD, 2007);Google Scholar United Nations Conference on Trade and Development, The Protection of National Security in IIAs (2009).

⁹⁸ IMF Executive Board, Decision no 144-52/51 (14 August 1952).

⁹⁹ Holder, William E, “The Relationship between the International Monetary Fund and the United Nations” in Effros, Robert E, ed, Current Legal Issues Affecting Central Banking, vol 4 (Washington, DC: IMF, 1997) 16 at 22.Google Scholar

¹⁰⁰ Viterbo, Annamaria, International Economic Law and Monetary Measures (The Hague: Edward Elgar, 2012) at 172–74.CrossRefGoogle Scholar

¹⁰¹ In accordance with GATS, supra note 18, art XI(2): “Nothing in this Agreement shall affect the rights and obligations of the members of the International Monetary Fund under the Articles of Agreement of the Fund, including the use of exchange actions which are in conformity with the Articles of Agreement, provided that a Member shall not impose restrictions on any capital transactions inconsistently with its specific commitments regarding such transactions, except under Article XII or at the request of the Fund.” During consultations concerning contested measures, the WTO could apply by analogy art XII(5)(e), which regulates consultation concerning, inter alia, payments or transfers in the event of serious balance-of-payments and external financial difficulties or threat thereof. In such a case, “all findings of statistical and other facts presented by the International Monetary Fund relating to foreign exchange, monetary reserves and balance of payments, shall be accepted and conclusions shall be based on the assessment by the Fund of the balance-of-payments and the external financial situation of the consulting Member.” However, in the event of a WTO claim against the US sanctions against Iran it is hardly imaginable that the US could make a valid case based on balance-of-payments reasons.

¹⁰² From the IMF perspective, a measure constitutes an exchange restriction when it “involves a direct governmental limitation on the availability or use of exchange as such:” IMF Executive Board Decision no 1034-(60/27) (1 June 1960).

¹⁰³ The distinction methodology was addressed in 1952 in Greece – Increase of Import Duties on Products Included in Schedule XXV, Case G/27 (3 November 1952) at 51. No conclusion was reached at the time. In 1891, another panel decided that “unlike the IMF — [GATT contracting parties] have never formally decided how to distinguish between trade and exchange controls. ... Their approach has been to examine particular restrictive measures affecting trade independent of the form that these measures took.” GATT Committee on Balance-of-Payments Restrictions, Consultation with Italy (Deposit Requirement for Purchases of Foreign Currency). Background Paper by the Secretariat, Doc BOP/W/51 (25 September 1981) at 5, para 14, online: <https://bit.ly/2NIZyU1>. And yet in 2004, a subsequent panel withdrew from the autonomous approach, stating that “since Article XV:9 of the GATT exempts exchange restrictions measures that are applied in accordance with the Fund Articles, from obligations under other Articles of the GATT, the guiding principle that the IMF prescribed as the criterion for the determination of what constitutes an ‘exchange restriction’ should be respected by this Panel. Therefore, the Panel should apply this criterion in its evaluation of the measure before it.” Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, Panel, WTO Doc WT/DS302/R (26 November 2004) at para 7.132. See further, on IMF–World Trade Organization (WTO) cooperation in this respect (comprehensive papers, albeit dating from before the last quoted panel report), WTO, WTO Provisions Relevant to the Relationship between Trade and Finance and Trade and Debt: Note by the Secretariat, Doc WT/WGTDF/W/3 (21 June 2002), online: <https://bit.ly/2OcidZs>; DE Siegel, “Legal Aspects of the IMF/WTO Relationship: The Fund’s Articles of Agreement and the WTO Agreements” (2002) 96:3 AJIL 561.

¹⁰⁴ Lupo-Pasini, Federico, The Logic of Financial Nationalism: The Challenges of Cooperation and the Role of International Law (Cambridge, UK: Cambridge University Press, 2017) at 134.CrossRefGoogle Scholar

¹⁰⁵ Andrea Bjorklund, “Emergency Exceptions to International Obligations in the Realm of Foreign Investment: The State of Necessity and Force Majeure as Circumstances Precluding Wrongfulness,” UC Davis Legal Studies Research Paper (2007) at 99.

¹⁰⁶ Russia – Traffic in Transit (Complaint by Ukraine), WTO Doc WT/DS512/R, Panel (2019).

¹⁰⁷ Ibid at para 7.57.

¹⁰⁸ Ibid at paras 7.77, 7.101.

¹⁰⁹ Ibid at para 7.82.

¹¹⁰ Ibid at para 7.100.

¹¹¹ Ibid at para 7.103.

¹¹² Ibid at paras 7.65, 7.70–7.71.

¹¹³ Ibid at paras 7.136–7.137.

¹¹⁴ Ibid at paras 7.121, 7.133, 7.138.

¹¹⁵ United Arab Emirates – Measures Relating to Trade in Goods and Services, and Trade-Related Aspects of Intellectual Property Rights, WTO Doc WT/DS526/3, Constitution of Panel (2018); Bahrain – Measures Relating to Trade in Goods and Services, and Trade-Related Aspects of Intellectual Property Rights, WTO Doc WT/DS527/1, Request for Consultations (2017); Saudi Arabia – Measures Relating to Trade in Goods and Services, and Trade-Related Aspects of Intellectual Property Rights, WTO Doc WT/DS528/1, Request for Consultations (2017).

¹¹⁶ Robert P Alford, “The Self-Judging WTO Security Exception” (2011) 3 Utah L Rev 697; Gruszczyński, Łukasz & Menkes, Marcin J, “Legality of the EU Trade Sanctions Imposed on the Russian Federation under WTO Law” in Wierczyńska, Karolina et al, eds, The Case of Crimea’s Annexation under International Law (Warsaw: Scholar, 2017) 237 and the literature therein.Google Scholar Andrew D Mitchell & Caroline Henckels, “Variations on a Theme: Comparing the Concept of ‘Necessity’ in International Investment Law and WTO Law” 14:1 Chicago J Intl L 93.

¹¹⁷ Michael P Malloy, “Reconciling Political Sanctions with Globalization and Free Trade. Où Est Votre Chapeau? Economic Sanctions and Trade Regulation” (2003) 4:2 Chicago J Intl L 371.

¹¹⁸ UN Economic and Social Council, Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, UN Doc E/PC/T/A/SR/33 (24 July 1947) at 3, online: <https://bit.ly/2Am4cFY>.

¹¹⁹ OECD Codes of Liberalisation of Capital Movements and Current Invisible Operations: User’s Guide (Paris: OECD, 2003).

¹²⁰ OECD Investment Committee, “Public Order and Essential Security Interests under the OECD National Treatment Instrument” in National Treatment of Foreign-Controlled Enterprises (Paris: OECD, 2005).Google Scholar

¹²¹ Marcin J Menkes, “Rule of Law in International Monetary and Financial Law: New(ish) Solution and Old Mistakes” (2019) Eur YB Intl Econ L [forthcoming].

¹²² Essential security clauses in international investment law sometimes are contained in a broader clause on non-precluded measures, which also encompass other public interest emergencies.

¹²³ William J Moon, “Essential Security Interests in International Investment Agreements” (2012) 15:2 J Intl Econ L 481.

¹²⁴ Subsequently quoted cases (CMS Gas Transmission Co v Argentine Republic, Sempra v Argentine Republic, LG&E v Argentine Republic, Enron Corp Ponderosa Asset, LP v Argentine Republic) are all based on the US–Argentina bilateral investment treaty (BIT) of 1991. The relevant passage of art XI is phrased like the US–Iran treaty: “This Treaty shall not preclude the application by either Party of measures necessary for … the Protection of its own essential security interests” [emphasis added]. Only LG&E absolved Argentina of international responsibility on the basis of art XI.

¹²⁵ Under this approach, even the Argentinian financial crisis of 2001–02 was declared to fall short of an essential security threat that would amount to a state of necessity, as it “did not result in total economic and social collapse.” CMS Gas Transmission Co v Argentine Republic, ICSID Case No ARB/01/08, Award (12 May 2005) at paras 88, 359; see also Sempra v Argentine Republic, which found that “the Treaty provision is inseparable from the customary law standard insofar as the definition of necessity and the conditions for its operation are concerned, given that it is under customary law that such elements have been defined.” Sempra Energy International v Argentine Republic, ICSID Case No Arb/02/16, Award (28 September 2007) at para 376.

¹²⁶ In LG&E v Argentine Republic, the tribunal recognized a state of necessity, as the situation involved a “fatal emergency” and a “total collapse of the Government and the Argentine State.” LG&E Energy Corp. v. Argentine Republic, ICSID Case No Arb/02/1, Decision on Liability (3 October 2006) at paras 227–29, 231. In Continental Casualty v Argentine Republic, the tribunal ruled that “[art XI] is not necessarily subject to the same conditions of application as the plea of necessity under general international law” and eventually accepted Argentina’s defence. Continental Casualty Co v Argentine Republic, ICSID Case No Arb/03/9, Award (5 September 2008) at para 167.

¹²⁷ Even though the four cases are assessed as “deeply problematic: not only is the reasoning seriously flawed, but the four ICSID Tribunals’ rulings also lack consistency even in the face of identical factual circumstances.” W Burke-White, “The Argentine Financial Crisis: State Liability under BITs and the Legitimacy of the ICSID System“ (2008) 3:1 Asian J WTO & Intl Health L & Pol’y 199, online: <https://ssrn.com/abstract=1140628>.

¹²⁸ Enron Corp Ponderosa Asset, LP v Argentine Republic, ICSID Case No Arb/01/3, Award (22 May 2007) at para 332. Also confirmed by the Sempra Annulment Committee since “not even in the context of GATT Article XXI is the issue considered to be settled in favor of a self-judging interpretation, and the very fact that such article has not been excluded from dispute settlement is indicative of its non-self-judging nature.” Sempra, supra note 125, Decision on the Argentine Republic’s Application for Annulment of the Award (29 June 2010) at para 384.

¹²⁹ Sacerdoti, supra note 63 at 11.

¹³⁰ Nicaragua, supra note 48.

¹³¹ Treaty of Friendship, Commerce and Navigation (with Protocol), 21 January 1956, 367 UNTS 3 (entered into force on 24 May 1958) [Treaty of Friendship]. By virtue of art XXI(1)(d) of the Treaty of Friendship, states reserve their right to non-precluded measures necessary to protect essential security interests.

¹³² Executive Order 12,513, 50 Fed Reg 18,629 (1985).

¹³³ Nicaragua, supra note 48 at para 224.

¹³⁴ Case Concerning Oil Platforms (Islamic Republic of Iran v United States ofAmerica), Merits, [2003] ICJ Rep 161 at para 78.

¹³⁵ As one scholar has shown, there are three interpretative methods in the jurisprudence on the relationship between treaty clauses and the customary plea of necessity: confluence, lex specialis, and primary-secondary applications of norms. J Kurtz, “Adjudging the Exceptional at International Investment Law: Security, Public Order and Financial Crisis” (2010) 59:2 ICLQ 325. To the contrary, one author has vigorously argued that in light of art 31 of the VCLT (treaty interpretation), “neither text, context, subsequent agreement nor practice of the parties to the U.S.-Argentina BIT support the use of the customary norm as an interpretive tool.” D Desierto, “Necessity and Supplementary Means of Interpretation for Non-Precluded Measures in Bilateral Investment Treaties” (2010) 31:3 U Pa J Intl L 827.

¹³⁶ Whereas the International Law Commission’s Articles on Responsibility of States for Internationally Wrongful Acts, UN Doc A/56/83 (3 August 2001) [ARSIWA] are now considered an authoritative reflection of customary international law, some actually questioned whether they should not be treated instead as arguments de lege ferenda. S Heathcote, “Est-ce que l’état de nécessité est un principe de droit international coutumier?” (2007) 1 Rev b dr Intern 53.

¹³⁷ ARSIWA, supra note 136, art 25: “1. Necessity may not be invoked by a State as a ground for precluding the wrongfulness of an act not in conformity with an international obligation of that State unless the act: (a) is the only way for the State to safeguard an essential interest against a grave and imminent peril; and, (b) does not seriously impair an essential interest of the State or States towards which the obligation exists, or of the international community as a whole. 2. In any case, necessity may not be invoked by a State as a ground for precluding wrongfulness if: (a) the international obligation in question excludes the possibility of invoking necessity; or (b) the State has contributed to the situation of necessity.”

¹³⁸ Robert D Sloane, “On the Use and Abuse of Necessity in the Law of State Responsibility” (2012) 106:3 AJIL 447.

¹³⁹ ARSIWA, supra note 136, art 25, paras 1–3.

¹⁴⁰ Ibid.

¹⁴¹ Ibid, art 25, para 14.

¹⁴² Ibid, art 25, para 15.

¹⁴³ As confirmed by the ICJ, self-judging clauses both have a normative component and do not bar jurisdiction. Djibouti v France, [2008] ICJ Rep 177; see also Stephan Schill & Robyn Briese, “‘If the State Considers’: Self-Judging Clauses in International Dispute Settlement” (2009) 13 Max Planck YB United Nations L 61; Desierto, Diane A, Necessity and National Emergency Clauses: Sovereignty in Modern Treaty Interpretation (Leiden: Brill, 2012).Google Scholar

¹⁴⁴ Good faith has been recognized as a normative requirement under the chapeau of GATT art XX in Brazil – Measures Affecting Imports of Retreaded Tyres, WTO Doc WT/DS332/AB/R, Appellate Body (2007) at para 215. One can argue, however, that the United States has been consistent in its insistence on the self-judging nature of the WTO essential security clause. Raj Bhala, “National Security and International Trade Law: What the GATT Says, and What the United States Does” (2014) 19:2 U Pa J Intl L 263.

¹⁴⁵ Kolb, Robert, The Elgar Companion to the International Court of Justice: Elgar Companions to International Courts and Tribunals (Cheltenham, UK: Edward Elgar, 2014) at 234.Google Scholar

¹⁴⁶ Ibid at 235.

¹⁴⁷ Ibid at 238–40.

¹⁴⁸ Nicaragua, supra note 48 at para 147.

¹⁴⁹ Although see the criticism, by one of the judges sitting on the case, of the court’s reactive approach to fact finding. Schwebel, Stephen M, “Three Cases of Fact-Finding by the International Court of Justice” in Schwebel, Stephen M, ed, Justice in International Law: Selected Writings (Cambridge, UK: Cambridge University Press, 1994) 125.CrossRefGoogle Scholar

¹⁵⁰ Devaney, James Gerard, Fact-Finding before the International Court of Justice (Cambridge, UK: Cambridge University Press, 2016) at 4–5.CrossRefGoogle Scholar

¹⁵¹ Romano, Cesare PR, “The Role of Experts in International Adjudication” in Société française pour le droit international, dir, Le droit international face aux enjeux environnementaux: Colloque d’Aix-en-Provence (Paris: Editions A Pedone, 2010) 181 at 182–83.Google Scholar

¹⁵² Devaney, supra note 150 at 7, 39–41.

¹⁵³ Ibid at 14–72.

¹⁵⁴ See Plant, Brendan & Riddell, Anna, Evidence before the International Court of Justice (London: British Institute of International Comparative Law, 2009) at 124–25;Google Scholar Vecchio, Angela del, Le parti nel processo internazionale (Milano: Giuffrè, 1975) at 205–12.Google Scholar

¹⁵⁵ Fitzmaurice, supra note 46 at 126–29; Luigi Fumagalli, “Evidence before the International Court of Justice: Issues of Fact and Questions of Law in the Determination of International Custom” in Nerina Boschiero et al, eds, International Courts and the Development of International Law (The Hague: TMC Asser Press, 2013) 137; Manfred Lachs, “Evidence in the Procedure of the International Court of Justice: Role of the Court” in Bola A Ajibola, Emmanuel G Bello & Tashim O Elias, eds, Essays in Honour of Judge Tashim Olawale Elias, vol 1: Contemporary International Law and Human Rights (Dordrecht: Martinus Nijhoff, 1992) 265.

¹⁵⁶ Kolb, supra note 145 at 251.

¹⁵⁷ Peter Tomka & Vincent-Joël Proulx, “The Evidentiary Practice of the World Court,” NUS Law Working Paper Series 26 (2015) at 10.

¹⁵⁸ Corfu Channel (United Kingdom of Great Britain and Northern Ireland v Albania), Merits, [1949] ICJ Rep 4 at 17 [Corfu Channel]. Statute of the International Court of Justice, 26 June 1945, 33 UNTS 993 (entered into force 31 August 1965).

¹⁵⁹ Corfu Channel, supra note 158 at 14.

¹⁶⁰ Ibid at 16.

¹⁶¹ Plant & Riddell, supra note 154 at 127.

¹⁶² Ibid at 127–30.

¹⁶³ Ibid at 132–37.

¹⁶⁴ Amerasinghe, Chittharanjan Felix, Evidence in International Litigation (Leiden: Martinus Nijhoff, 2005) at 96–117.Google Scholar

¹⁶⁵ There is yet another ICJ case pending between the two states, following the institution of proceedings in 2016 for the alleged violation of Iranian immunity from jurisdiction.

¹⁶⁶ Notably, the French and German interests could be at stake and both would be subject to treaty protection, under the 1956 Germany–US Treaty of Friendship, Commerce and Navigation, 29 October 1954, US Government Printing Office (1955), and the 1822 France–US Treaty of Navigation and Commerce, 6 February 1778 (1774–89) Journals of the Continental Congress 12. Jack Ewing & Stanley Reed, “European Companies Rushed to Invest in Iran: What Now?” New York Times (9 May 2018).

¹⁶⁷ “Le constructeur automobile PSA prépare son retrait d’Iran,” Le Monde (5 June 2018).

¹⁶⁸ Van Aaken & Kurtz, supra note 92.

¹⁶⁹ Sloane, supra note 138.

¹⁷⁰ Gordon, Michael R, Rasmussen, Sune Engel & Hughes, Siobhan, “U.S. Planned Strike on Iran after Downing of Drone but Called Off Mission,” Wall Street Journal (21 June 2019), online: <https://on.wsj.com/2FEITzj>.Google Scholar

¹⁷¹ White House, President Donald J. Trump Approves Section 232 Tariff Modifications (2018).

¹⁷² I thus subscribe to the conclusions formulated, with respect to necessity in international investment law, in Lorenza Mola, “International Investment Arbitration and Serious Economic Crises: Lessons Learned in the Argentinean Crisis of 2000–2001” in Attila Tanzi et al, eds, International Investment Law in Latin America / Derecho Internacional de las Inversiones en América Latina (Leiden: Martinus Nijhoff, 2016) 370. On advantages and risks related to the proportionality analysis, see also Kingsbury, Benedict & Schill, Stephan W, “Public Law Concepts to Balance Investors’ Rights with State Regulatory Actions in the Public Interest: The Concept of Proportionality” in Schill, Stephan W, ed, International Investment Law and Comparative Public Law (Oxford: Oxford University Press, 2010) 75.CrossRefGoogle Scholar The authors also compare the normative vagueness of the necessity exception to the (in)famous indirect expropriation test of “I will know it when I see it” in investment arbitration.

¹⁷³ Nuclear Tests (Australia v France), [1974] ICJ Rep 253; Nuclear Tests (New Zealand v France), [1974] ICJ Rep 457.

¹⁷⁴ Murphy, Francois, “Iran Hopes Trade Channel Skirting U.S. Sanctions Will Work Within Weeks,” Reuters (6 March 2019), online: <https://reut.rs/2u8gDiG>.Google Scholar