Secondary sanctions as instruments of U.S. foreign policy raise serious questions of extraterritoriality and WTO compatibility. Discuss with reference to recent developments.

Secondary sanctions penalise third-country entities for lawful dealings with a sanctioned state, extending one nation's writ beyond its borders. The U.S. Sanctioning Russia Act — authorising tariffs of up to 500% on all goods from countries buying Russian oil or uranium, with India, China and Brazil in view — has made this doctrine a live concern for India [1].

The extraterritoriality question

• Absent jurisdictional nexus: the measure punishes commercial conduct occurring wholly outside U.S. territory, resting on the dollar's centrality rather than any territorial or nationality link.
• Erosion of sovereign equality: it coerces the energy sovereignty of third states — India's Russian crude share rose from about 0.2% before February 2022 to roughly 35–40% of imports, a purely commercial choice.
• Disproportionate spillover: tariffs fall on all exports, so textiles, gems and pharma exporters pay for an energy decision they did not make.
• Weak multilateral mandate: unlike UN Security Council sanctions under Chapter VII, such unilateral measures carry no UN Charter authority, though the bill's bipartisan super-majority gives it strong domestic legitimacy [2].

The WTO compatibility question

• Country-specific punitive rates prima facie violate GATT Article I (MFN) and Article II (bound tariffs).
• The likely defence is the Article XXI security exception [3], whose "which it considers" language the U.S. reads as self-judging.
• However, the panel in Russia — Traffic in Transit (DS512, 2019) held that Article XXI is justiciable and requires a genuine "emergency in international relations" objectively shown [4].
• Yet with the Appellate Body paralysed, adjudication is largely theoretical — normalising tariff coercion as trade policy.

Secondary sanctions thus sit uneasily between legitimate security concerns and rules-based trade. India's calibrated response — diversifying crude sourcing to around 40 countries [5], strengthening strategic reserves and accelerating renewables — converts external pressure into resilience. Alongside sustained plurilateral effort to revive WTO dispute settlement, this preserves both energy security and strategic autonomy.