Sanctions of the EU and the USA Towards Russia are Non-Legitimate and Counterproductive

19 october 2015

Inna Dudykina, the expert of the Analytical Center, participated in a discussion 'Import substitution vs export' that was held within the framework of the Conference 'Prospects of financing science and innovations under current economic conditions.'

'The practice of unilateral measures (sanctions) from countries is not a new phenomenon in the international law and is often used as an instrument of conflict management. Although the international law contains no provisions expressly prohibiting the implementation of unilateral coercive measures against another state, the principle of sovereign equality of states excludes the possibility of a legitimate use of sanctions by one state against the other,' Ms Dudykina said in her report 'Import substitution in accordance with WTO rules and barriers on the way of the Russian business.'

According to the expert, unilateral measures, imposed by the EU, the US and some other countries towards Russia have no international legitimacy and are counterproductive. Measures aimed at limiting activities of financial institutions of Russia, violate the rules of the World Trade Organization, which is considered as a violation of the assumed obligations and gives rise to an international dispute referable to the WTO Dispute Settlement Body.

'In the course of the current situation on the world stage the Russian Federation pursues an active policy of import substitution, which must be carried out where it is promising, where Russian manufacturers can and should be competitive, while not breaking the rules of international trade,' said Ms Dudykina.

In accordance with the Articles. 3.1. (a), (b), 3.2 of the Agreement on subsidies and compensational measures, export and import substitution subsidies are prohibited. The agreement unambiguously includes "the use of domestic goods instead of imported", i.e. in fact, import substitution, to prohibited subsidies. 

The expert believes that in accordance with current needs of  Russia to the advocacy of the WTO, it is necessary to study the existing law enforcement practice of dispute settlements in order to use existing reasoning to assess the legality of existing restrictive measures.