Issues & Insights

‘National Security’ Is Poor Reason To Let Nations Ignore Trade Laws

Looks like a soccer game, but it's really a trade dispute. Source: Wikimedia Commons

On June 6, the World Trade Organization handed down a ruling resolving a dispute between Saudi Arabia and Qatar over certain broadcasts and broadcast rights in region.  This ruling holds important precedent for the rights of member states to enforce their claims.  More so, this ruling speaks to the broad national security assertions of member countries in a trade context. 

The facts are fairly straightforward.  The Qatari broadcaster, beIN, had secured rights to broadcast the English Premier Football League matches to the Gulf Region – including Saudi Arabia.  Saudi Arabia and Qatar are currently blockading and boycotting one another for other geopolitical reasons unrelated to this specific dispute. 

Consequently, Saudi Arabia completely blocked the Qatari broadcast within the Kingdom.  Further, a Saudi Arabian broadcaster – beoutQ – rebroadcast those same matches within the Kingdom with its own commentary track.  Subsequently, Saudi Arabia denied beIN’s right to bring an action against beoutQ in the courts of the Kingdom for civil damages. Further, Saudi Arabia refused to bring its own criminal action against beoutQ for pirating the broadcasts, citing national security concerns

The WTO relied on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) (to which both parties are signers) to formulate its ruling.  While both sides claimed victory, the preponderance of the ruling came down in favor of Qatar. 

Saudi Arabia asserted that its national security-motivated blockade of all Qatari broadcasts necessitated the blockade of the soccer matches.  Further, it argued that this blockade was allowed under Article 73(b)(iii) of the TRIPS Agreement, which offers blanket protection for IP rights being incidentally infringed for national security reasons. 

The WTO agreed with Saudi Arabia that it did have the right to blockade the broadcasts but held against them on the subject of the criminality of the rebroadcast of the matches.  The WTO ruled that while Saudi Arabia has the right to limit broadcasts into the Kingdom for national security reasons, it does not have the right to allow for rebroadcast of those matches just because they are otherwise blockaded. 

Under Article 61 of the TRIPS agreement, Saudi Arabia was required to enforce beIN’s rights to exclusivity in the broadcasts and to criminally try beoutQ for piracy. 

The ramifications of WTO’s ruling on the national security issue have useful applications in a world dominated by trade and international usage of intellectual property – particularly in areas where piracy occurs.  The WTO has taken a stand that even in matters exclusively regarding trade, legitimate national security interests are carefully protected.

However, those protections do not allow for the pirating of intellectual property rights by a corporate actor enjoying state sanction. 

Citing Article 61, the WTO ruled that Saudi Arabia must allow for the prosecution of intellectual property pirates, regardless of whether the opportunity for piracy was created by national security. 

To date, many such activities by member states are indeed couched in such “national security” interests.  Until now there were few if any repercussions for these entities inside of a member state pirating intellectual property.

In fact, many times, that entity and the member state were indistinguishable.  In these cases, the member state was directly pirating intellectual property through a cut-out company – a proxy.  Now, an actual prosecution of the proxy will be required even where national security is asserted. 

Although application of the TRIPS Agreement is limited to intellectual property disputes, the WTO’s decision is exciting because it has important implications for the use of a national security defense not only with respect to trade, but in other domains as well. 

Perhaps, national security will no longer shield only the thieves of intellectual property from prosecution but also the workshops making the goods, the international sales of those goods and an assortment of ancillary companies and interests profiting directly and indirectly from the first-instance intellectual property theft. 

But beyond that, state parties to international treaties routinely avail themselves of the national security defense to shield themselves and their agents from prosecution for criminal wrongdoing. 

We see it today in Hong Kong, where China is unilaterally extending the writ of its laws, in violation of international agreements.  We see it in Iran, where the regime brutally suppresses peaceful dissent. And we’ve seen it in reputedly progressive states like the United Arab Emirates, which arrested a British scholar for “jeopardizing the military, political and economic security of the state.”

The WTO should be commended on the courage of its decision in the Qatar-Saudi case:  it marks only the second time that the international body has asserted it can rule in a trade case where one side has declared a matter of national security. Hopefully, other supra-national bodies will take heed of this important precedent. 

Former Illinois Congressman Mike Flanagan sat on the Committees on the Judiciary, Government Reform and Oversight, and Veterans’ Affairs during the historic 104th Congress. From 2009-2011, Flanagan served in Iraq as a Rule of Law Advisor to the U.S. State Department.  An attorney, he is also the CEO of Flanagan Consulting LLC.

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