This chapter considers whether and to what extent secondary sanctions that contravene commitments under trade and investment agreements may be justifiable under security and general exceptions. It analyses the jurisprudence of various international courts and tribunals on the matter, while focusing on the text of General Agreement on Tariffs and Trade (GATT) Articles XX and XXI (which many international economic agreements replicate or adjust). For non-self-judging security exceptions, it concludes, justifiability hinges on the design of sanctions, their targeting of ‘military’ products or services, and the demonstrability of an essential security risk for the sanctioning party. Secondary sanctions might also be justifiable under general exceptions, which feature finer legal criteria to permit measures that pursue legitimate objectives while controlling their abusive application. The chapter considers the enforcement-related exception of GATT Article XX(d), as well as the public morals exception of GATT Article XX(a), which was invoked to justify sanctions in United States – Tariff Measures on Certain Goods from China. As with other measures at the intersection between economic relations and security, the assessment of secondary sanctions under these exceptions becomes particularly challenging in light of their usual objective: restricting trade or investment vis-à-vis specified states, on the basis not of impersonal objectives but of a state’s perception of its essential security interests.

The intersection between energy and the environment is regulated on the basis of legal foundations that international economic law has developed on its own or ‘borrowed’ from (or otherwise relied on) such outside regimes as general international law and international environmental law. The borrowed principles, like sovereignty over natural resources or sustainable development, can find their reflection, directly or indirectly, in trade and investment agreements and case law and will continuously affect new developments in this field. This chapter will show that such foundations stemming from the external sources define the basic contours of State’s rights and duties associated with the energy–environment nexus. Moreover, the international trading and investment systems provide self-created legal foundations for environmental policy space as will also be discussed in this chapter. They define the extent to which energy-related restrictive measures driven by environmental considerations can be accepted. The case of the ECT presented at the end of this chapter is a striking example for demonstrating that the legal foundations are not static and may undergo important changes.

Chapter 4 examines the requirement in Article XX GATT 1994 and Article XIV GATS (the General Exceptions) as well as Article 2.2 of the TBT Agreement that a Member’s measure must contribute to a certain policy objective. The chapter argues that this requirement is essentially a causal requirement, and raises some jurisprudence that has argued the same. The chapter also traces through parts of the jurisprudence that would seem to support a non-attribution analysis of some kind being used in this context. The chapter concludes by proposing that the Tripartite Non-attribution/Causal Link Analysis might be applied to make a determination of causation for the purposes of this requirement under the General Exceptions and Article 2.2 of the TBT Agreement. The chapter concludes by setting out in detail how the Tripartite Non-attribution/Causal Link Analysis might be applied to make causal determinations for the purposes of the General Exceptions and Article 2.2 of the TBT Agreement.