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Russia is currently being sanctioned by numerous Western countries for occupying Crimea and invading Donbass. However both Russia and the Western countries are members of the World Trade Organization (WTO), and the basic principle of WTO is that free trade must be allowed between its members.

So why can economic sanctions exist between WTO members?

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  • WTO is not a political institution, while the sanctions were imposed for political reasons;
  • WTO does not act by itself, it requires a dispute raised and reviewed by WTO’s dispute settlement mechanism (DSM). There were no dispute raised;
  • WTO DSM can handle only the discriminatory use of WTO instruments and norms; the sanctions were not imposed with the use of the WTO instruments;

This question was raised in the Russian propaganda back in March-April 2014, just after the Russia has committed an armed invasion to Ukraine. If there were any possibility to dispute the sanctions, Russians would do it three years ago.

This article on Russia-Direct site has a pretty detailed insight (highlight mine):

WTO Director General Roberto Azevêdo sees the organization as “a forum where members negotiate and talk to figure out solutions” that doesn’t necessarily act as a political institution.

“If there were sanctions and a member complained about the legality of a particular measure or something like that, I suppose they could… but it could depend on the nature of the complaint and on the defense that would be invoked by the party that is being complained about,” he said at the workshop in response to a question from a Vedomosti reporter whether the WTO can deal with economic sanctions and help withstand them. “So, it’s difficult to predict what would be the challenge and what would be the defense.”

Also,

“In fact, DSM is used to dispute the unfair or discriminatory use of WTO instruments and norms covered by the WTO agreements” — Tatiana Isachenko, an expert on the WTO

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