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The principle of freedom of transit has always played a vital role in the functioning of the international trade system. In order to facilitate free trade, many states started to conclude basic transit agreements back in the XIX century. international community has achieved a significant success in promoting the freedom of transit and, as a result, international trade since then. For instance, various international conventions, such as Convention on Freedom of Transit (1921), Convention on the High Seas (1958), Convention on Transit Trade of Land-Locked States (1965) and, 47 LEX PORTUS No 5 (13)’2018 of course, Article V of General Agreement on Tariffs and Trade (1994) were adopted maintaining the discussion around the importance of freedom of transit for international trade. This paper deals with a principle of freedom of transit in the understanding of international conventions and WTO law, as well as the EU customs legislation. In order to fully understand the evolution of freedom of transit and its importance for the international community, this paper outlines the first international treaties concluded to facilitate free trade between several states, and also touches upon the first disputes arising out violation of freedom of transit. Despite the significant success achieved by the international community, including the World Trade Organization, in promoting the freedom of transit, a number of issues continue to exist. Seizure of goods in transit by customs authorities of the European Union is one of the most important and arguable issues. For this reason, the paper analyses the existing transit rules in the European Union and their compliance with the WTO law. Moreover, freedom of transit of gas is analysed in light of the WTO law and fundamental principal of international law at large. Finally, author assess one of the recent landmark cases concerning the freedom of transit, namely the transit dispute between Ukraine and the Russian Federation in the WTO. The key words: freedom of transit, transit of gas, seizure of goods in transit, transit disputes, Article V GATT. The words of Charles Chaney Hyde regarding the boundaries of freedom of transit hold true after almost 100 years since the author’s landmark work: “it may be doubted whether as yet practice has established general acquiescence in the principle that a State owes a legal duty to another to agree to yield to it on equitable terms privileges of transit by land across the national domain” (Hyde, 1922, p. 25). In order to facilitate free trade, many states started to conclude basic transit agreements back in the XIX century. For instance, The United States has on occasion entered into conventions containing provision for transit by land. By means of Article XXXV of the treaty with New Granada (Colombia) of December 12, 1846, the former acquired a right of way or transit for commercial purposes across the Isthmus of Panama by any mode of interoceanic communication. According to Article XXIX of the Treaty of Washington of May 8, 1871, it was agreed that for a term of years goods arriving at certain American ports and destined for British North American possessions might be “entered at the proper custom-house and conveyed in transit, without the payment of duties, through the territory of the United States”, under such rules, regulations and conditions for the protection of its revenue as it might prescribe; it was declared that and under like rules, regulations and conditions, goods might be conveyed in transit without payment

Obstacles to free international trade: pressing challenges of the freedom of transit