A Chapter by Eshe' Allen

I wondered. Apparently no one's thought to ask.


              The United States became a member of the WTO on January 1, 1995, (WTO Member Information).  The stated purpose of the WTO is “to develop an integrated, more viable and durable multilateral trading system encompassing the General Agreement on Tariffs and Trade, the results of past trade liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations” (Uruguay, Preamble).  In an effort to fulfill that purpose, GATT Article I requires most-favoured-nation treatment by all WTO member countries to all WTO member countries.  Cuba became a member of the WTO on April 20, 1995, (WTO Member Information).  As such, the United States is required to give it MFN treatment under the GATT (GATT Art. 1(1)).  Yet, in the Cuban Liberty and Democratic Solidarity Act (1996) (“Helms"Burton Act”), the United States enacted a total embargo on Cuban goods and services.  The GATT includes a clause allowing members to take measures inconsistent with their obligations for the maintenance of “international peace and security” (GATT Art. 21(c)).  This paper will explore whether the Helms-Burton Act was enacted to maintain international peace and security under GATT Article 21(c), expropriation as a threat to peace under Article 39 of the United Nations Charter and the applicability of the dispute settlement mechanism created by Article 22 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (1994) (“DSU”).


            The United States delineated its justifications for the Cuban embargo in its enacting legislation, the Helms-Burton Act.  Specifically, Cuba is accused of threatening “international peace and security by engaging in acts of armed subversion and terrorism such as the training and supplying of groups dedicated to international violence” (U.S.C. ch. 22, § 2(14), 1996).  Its “massive and systematic violations of human rights may constitute a ‘‘threat to peace’’ under Article 39 [of the UN Charter]” (U.S.C. ch. 22, § 2(24), 1996).  Finally, the United States faces continuing national security and health and safety threats "of terrorism, theft of property from United States nationals by the Castro government, and the political manipulation by the Castro government of the desire of Cubans to escape that results in mass migration to the United States” (U.S.C. ch. 22, § 3(3), 1996).  As this paper focuses on the embargo justifications in an economic context, we examine the economic justification, expropriation, as a national security threat. 


            Article 21 delineates specific security exceptions to most-favoured-nation treatment (GATT Art. 21).  Specifically, subsection a discusses disclosure and b allows protection of specifically delineated security interests, Id.  As the United States does not enunciate any of those specified interests in its enacting legislation, its embargo falls under subsection c.  “[N]othing in this agreement shall be construed to prevent any contracting party from taking any action in pursuance under its obligation under the GATT for the maintenance of international peace and security” (GATT Art. 21(c)).  In its enacting legislation, the United States argues that “the wrongful confiscation or taking of property belonging to United States nationals by the Cuban Government, and the subsequent exploitation of this property at the expense of the rightful owner, undermines the comity of nations, the free flow of commerce, and economic development” (U.S.C. ch. 22, § 301(2), 1996).  Therefore, the United States is justified in using this embargo to “to bring democratic institutions to Cuba through the pressure at a time when the Castro regime has proven to be vulnerable to international economic pressure; and to protect the claims of United States nationals who had property wrongfully confiscated by the Cuban Government” (U.S.C. ch. 22, § 301(6), 1996).  Finally, such action is justified because “the international judicial system, as currently structured, lacks fully effective remedies for the wrongful confiscation of property and for unjust enrichment from the use of wrongfully confiscated property by governments and private entities at the expense of the rightful owners of the property” (U.S.C. ch. 22, § 301(8), 1996).


            Expropriation has always been a foreign investment risk (Schaffer et. al, 2009, p. 606).  The question presented is whether that risk rises to the level of an Article 21 national security concern.  As Cuba and the United States are members of the WTO, we should look to the WTO’s judicial arm, its Dispute Settlement Board (“DSB”), for clarification.  There is currently a dispute in the WTO as to whether the DSB is competent to review a member’s invocation of Article 21 national security measures.  The United States has argued that the DSB is not competent to decide the matter of American national security interests (Akande & Williams, 2003).  Traditionally, once invoked, national security was not reviewable by an international body (Akande et al. 374).  The two WTO dispute resolution panels that have been convened raising this issue, EU against the Helms-Burton Act and Nicaragua v. Honduras and Columbia, were prematurely ended.  Therefore, a right to such review has not been established.  However, the DSU provides instruction about the jurisdiction of WTO panels.


            Under Article 7 of the DSU “once a panel is established, it has the jurisdiction to consider a complaint and to address all the legal issues relating to that dispute” (Akande et al. 380).  As the DSU gives the panel wide latitude to investigate and make findings, an affirmative restriction is necessary to remove national security concerns from its purview.  This is the view of other international bodies as “the ECJ and EHCR have decided on whether or not a particular measure is actually necessary to protect national security” (Akande et al. 382).  Since it is not restricted, the determination of national security is within the purview of the WTO and we must analyze the legitimacy of the Helms-Burton sanctions within the national security context of the GATT.


            Sanctions in the United Nations are governed by Article 39 of the United Nations Charter.  Under Article 39 “the objective of UN sanctions must be to maintain or restore international peace and security” (Flowe & Gold, 2000).  If the Security Council "determine[s] the existence of any threat to the peace, breach of the peace, or act of aggression," it may impose sanctions under Article 41 "to maintain or restore international peace and security" (UN Charter Art. 39).  In conjunction with the UN’s actions, member states often enact their own sanctions in accordance with Article 21 of the GATT.  Article 21(c) allows a member to take any action "in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security," (GATT Art. 21).


           Actions initiated under Article 21(c) of the GATT are “taken in pursuance of obligations under UN Security Council Resolutions”  (Akande et al. 384).  The Security Council's powers to sanction come into effect only when a definite "threat to the peace," actual "breach of the peace," or particular "act of aggression" has occurred (UN Charter Art. 39).  The Security Council is solely entrusted with making that determination.  “A threat to the peace is whatever the security council says is a threat to the peace” (Cryer, 1996 (195).  The Security Council has found threats to the peace in instances of international conflict, civil war/conflict, denial of self-determination and crimes against humanity, terrorism, armament, treaty breaches and non-compliance with UN resolutions.  Id.  Upon making such a determination in the form of a Resolution, the Security Council enacts sanctions against the member nation under Charter Articles 41 or 42.  Id.


            After passage of a Security Council Resolution finding the takeover of a white-supremacist regime in Rhodesia to be a threat to peace, the Security Council enacted comprehensive economic and defense sanctions against Rhodesia until the regime was ended.  The sanctions were in force for fourteen years, from 1965 to 1979.  While comprehensive, they did not amount to an embargo.  In 1963, the Security Council found South Africa’s apartheid policies and the possibility of arms inflaming a race conflict to constitute a threat to international peace and security and imposed an arms embargo against the nation.  This arguably human rights intervention included voluntary economic sanctions but none were made mandatory.  The United States and other countries eventually imposed economic sanctions against South Africa but none imposed economic embargos.


            The Security Council imposed the toughest, most comprehensive economic sanctions in human history against Iraq four days after their 1990 invasion of Kuwait, finding that said invasion was an act of aggression.  The sanctions ended upon the fall of the government in 2003.  In 1992 and 1998, the Security Council found Yugoslavia’s role in fomenting war among Bosnian Serbs and in the Kosovo crisis, were a threat to international peace and security and imposed arms embargos against Yugoslavia.  While Yugoslavia’s actions were found to endanger the security of the nations in the region, no economic sanctions were adopted.  The Security Council has imposed extensive economic and commercial sanctions against North Korea after finding its repeated defiance of Security Council Resolutions and repeated testing of weapons of mass destruction to be breaches of the peace and acts of aggression. Finally, after an initial imposition in 1979 due to the hostage crisis the Security Council has imposed increasingly escalating sanctions on Iran.  The Security Council has repeatedly increased the severity of sanctions since 2006, finding Iran's continued pursuit of weapons of mass destruction to be breaches of the peace and acts of aggression.


            A 1996 Security Council Resolution regarding aviation safety is the only resolution that has been enacted against Cuba.  The resolution did not find Cuba to be a threat to the peace and was a statement of policy that did not include sanctions.  As this resolution does not call for or justify sanctions by the Security Council it provides no basis for member sanctions.  Not only has the United States failed to secure a Security Council sanctions mandate, the Helms-Burton Act has been widely condemned in the international community.  “According to the Declaration on Principles of International Law concerning Friendly Relations and Cooperation among States in accordance with the Charter of the United Nations, no State may use or encourage the use of economic, political or any other type of measures to coerce another State in order to obtain from it the subordination of the exercise of its sovereign rights and to secure from it advantages of any kind” (Resolution 2003/17).  The United Nations passes a yearly condemnation resolution and recently passed its 17th consecutive Resolution Against Embargo (“Overwhelming UN General Assembly,” 2010).  As of the date of this writing, no international body has ever found expropriation to be a threat to the peace.


            In lieu of making a national security argument, the United States has the right to suspend obligations and or concessions with Cuba under DSU Article 22.  Article 22 allows for “compensation and the suspension of concessions or other obligations.”  (DSU Art. 22(1)).  However, said suspensions “are temporary measures available in the event that the recommendations and rulings are not implemented within a reasonable period of time,” Id.  The Article requires parties to determine their actual damages and use suspension to offset those damages. It provides principles and procedures for determining what obligations to suspend (DSU Art. 22(3)).  Finally, it requires the level of suspension to be “equivalent to the level of the nullification or impairment” (DSU Art. 22(4)).  Therefore, under DSU Article 22, the United States would be required to determine the value of the takings and subsequent trafficking and impose sanctions on Cuba equivalent to the United States’ damages.  Considering the vast difference in Cuba’s development and relative fiscal power, an endless, complete embargo could not be sustained under DSU Article 22.


            Article 22 serves a dual purpose in this discussion.  It is also one of America’s stated concerns that “the international judicial system, as currently structured, lacks fully effective remedies for the wrongful confiscation of property and for unjust enrichment from the use of wrongfully confiscated property by governments and private entities at the expense of the rightful owners of the property” (U.S.C. ch. 22, § 301(8), 1996).  Article 22 provides a competent framework utilizing a recognized and respected judiciary system with proven effective remedies to resolve issues of financial inequity.  Perhaps the United States has not utilized Article 22’s provisions as its embargo may be prohibited under the Uruguay Round Agreement and the DSU as “the DSB shall not authorize suspension of concessions or other obligations if a covered agreement prohibits such suspension” (DSU Art. 22(5)).


            The United States has chosen a path of isolation in an attempt to use economic means to create a regime change in Cuba.  As both the United States and Cuba are members of the World Trade Organization, the United States is bound by treaty obligations to give Cuban products and services most favored nation treatment.  GATT Article 21 provides a method for claiming an exception to said obligations on specific security grounds.  Cuba’s expropriation of American assets forms the foundation for America’s economic national security argument.  This argument is buttressed with an allegation of insufficient international legal processes and enforcement measures to provide American entities with adequate redress.  Yet, no international legal or security body has ever interpreted expropriation to be a national security threat.  Countries’ sanction actions under GATT Article 21 have been taken in conjunction with Security Council Resolutions authorized under Article 39 of the United Nations Charter.  Not only has the Security Council not found that Cuba’s expropriation is a “threat to peace” in the context of Article 39, the United Nations as a body has passed repeated resolutions condemning the United States’ embargo.


            As the United States has no established legal basis, domestically or internationally, for imposing said embargo on a national security basis, it is obliged to avail itself of the dispute resolution procedures of the WTO.  Under Article 22 of the DSU, the United States may impose sanctions in response to Cuba’s illegal takings but must do so in an equivalent manner.  Therefore, under Article 22, the United States would not be able to maintain its complete embargo.  The DSU also provides a framework for settling expropriation disputes utilizing systems, actors and a judiciary that are highly respected and competent to handle such matters.  Therefore, as the 1994 passage of the DSU created a legal system with proven enforcement mechanisms for handling expropriation disputes and its efficacy has been aptly demonstrated during its sixteen years of operation, the United States’ Cuban embargo is no longer justifiable on economic grounds and should be ended.


            In accordance with the WTO dispute resolution process, the United States must quantify its losses and impose equivalent sanctions.  The negative business implications of possible future action against the United States in international tribunals coupled with its extreme isolation on the issue favor ending the embargo.  Also, the political climate of any country is unstable.  The Helms-Burton Act itself discusses post-regime change procedures.  When Cuba begins to privatize American companies will benefit the greatest.  The embargo is, in essence, improving the position of said American companies.  The poorer the Cuba is, the cheaper the repurchase of nationalized companies will be and the greater the returns for the privatizers.  That return, coupled with the redress these companies will demand for the initial nationalization, will result in a windfall for America’s injured corporations.  In light of these facts, maintaining the embargo to the continued detriment and crippling of the Cuban people is morally wrong and should be ended immediately.




Akande, D. & Williams, S. (2003).  International Adjudication on National Security Issues: What Role for the WTO?  Virginia Journal of International Law, 43, 365-404.


Article 39: Repertory of Practice of United Nations Organs.  (1954-1955). Article 39, Repertory, Supplement, I(1).  Retrieved June 18, 2010 from


Cryer, R.  (1996). Security Council and Article 39: A Threat to Coherence?  Journal of Armed Conflict Law, 1, 161-195.


Flowe, B.H.  Gold, R. (2000).  The Legality of US Sanctions. Global Dialogue, 2(3).  Retrieved June 18, 2010 from


Links International Journal of Socialist Renewal. (n.d.) Overwhelming UN General Assembly vote against US blockade of Cuba. Retrieved June 18, 2010, from


Schaffer, R. Agusti, F. & Earle, B. (2009).  International Business Law and its Environment. (7 ed.).  Mason, OH: South-Western Cengage Learning. 


United Nations. Commission on Human Rights. 55th Meet. Commission on Human Rights, Resolution 2003/17. Human rights and unilateral coercive measures. 22 April 2003. Retrieved June 18, 2010, from


Cuban Liberty and Democratic Solidarity Act of 1996, 22 U.S.C. §6021"6091 (1996).


General Agreement on Tariffs and Trade (1947).  Articles 1, 21 and 22.  Retrieved June 18, 2010, from


Understanding on Rules and Procedures Governing the Settlement of Disputes (1994).  Article 22.  Retrieved June 18, 2010, from


United Nations Charter (1945). Article 39 Retrieved June 18, 2010, from


Uruguay Round Agreement (1994).  Preamble. Retrieved June 18, 2010, from


World Trade Organization Membership Information.  Retrieved July 27, 2010, from

© 2010 Eshe' Allen

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Added on July 28, 2010
Last Updated on July 28, 2010
Tags: cuba, embargo, us, america, united states


Eshe' Allen
Eshe' Allen

North Lauderdale, FL

been a minute. glad to be here. more..