Next week, the World Trade Organization (“WTO”) will consider Venezuela’s request for the establishment of a panel to decide whether U.S. sanctions affecting Venezuela violate international trade law.

In December, Venezuela filed its second ever complaint at the World Trade Organization challenging U.S. sanctions. Specifically, Venezuela claimed that the U.S. imposed “coercive trade-restrictive measures” in an attempt to isolate Venezuela economically. These measures included “certain U.S. laws and regulations relating to goods of Venezuelan origin, the liquidity of Venezuelan public debt, transactions in Venezuelan digital currency, and the Specially Designated Nationals and Blocked Persons List [which] are inconsistent with the WTO’s General Agreement on Tariffs and Trade (GATT) 1994 and the General Agreement on Trade in Services (GATS),” according to a statement by the WTO.

Venezuela’s complaint targets actions by the U.S. against Venezuela dating back to 2014. Although Venezuela’s complaint did not initially include the Trump Administration’s Executive Order imposing significant sanctions with respect to state-run oil giant Petróleos de Venezuela SA (“PdVSA”), which was issued after the filing of the complaint, Venezuela added the Executive Order to its dispute on Thursday. (For more information on the PdVSA designation, see our previous blog post here.) Venezuela has also reserved the right to “raise additional factual issues and legal claims under other provisions of the covered agreements in relation to the matters mentioned above during the course of the consultations and in any future request for the establishment of a panel in these proceedings.”

Under the WTO’s dispute settlement process, Venezuela was authorized to request the establishment of a panel “any time 60 days after the date of receipt by the respondent of the request for consultations, but also earlier if the respondent either did not respect the deadlines for responding to the request for consultations or if the consulting parties jointly consider that consultations have failed to settle the dispute.” On March 14, Venezuela filed its request to establish a panel stating that the U.S. “refused to enter into consultations” with Venezuela. The U.S.’s refusal is, perhaps, of little surprise given the U.S.’s statements that it no longer recognizes Nicolás Maduro as the legitimate president of Venezuela and instead views Juan Guaidó, the president of the Venezuelan National Assembly, as the rightful leader of the country. If the WTO’s Dispute Settlement Body (“DSB”) decides on March 26 to establish a panel, the adjudication phase of the dispute will begin.

Because the U.S. has not released a formal response to Venezuela’s complaint, it is unclear on what basis the U.S. will defend its actions should the dispute proceed to adjudication. However, the U.S. could oppose the dispute based on the national security interests of the U.S. Recently, this rarely-used exception – enshrined in Article XXI of the GATT – has been invoked in disputes between Russia and Ukraine as well as Qatar and its neighboring states. Last year, the United States also used this exception to justify its steel and aluminum tariffs. As the U.S. stated at a meeting before the WTO DSB, “the clear and unequivocal U.S. position, for over 70 years, is that issues of national security are not matters appropriate for adjudication in the WTO dispute settlement system.” Consistent with longstanding U.S. policy, the Trump administration has also reportedly stated that a WTO panel “lacks the authority to review the invocation of Article XXI and to make findings on the claims raised in this dispute.”