EU court rejected appeal of Russian oligarchs over lifting sanctions

The European Court refused to cancel the European sanctions against Russian oligarchs Gennady Timchenko and his wife Yelena, Mikhail Fridman, Petr Aven, and German Han. The EU Court announced this decision on September 11, Reuters reported.

Timchenko, Friedman, Aven, and Han faced sanctions following Russia’s full-scale invasion of Ukraine. They must declare their funds and cooperate with competent EU national authorities.

After that, the plaintiffs tried to prove in court that they were unrelated to the Russian war in Ukraine. Russian oligarchs claimed that the European Council has no right to impose any additional obligations on those on the sanctions list.

For example, Timchenko claimed in his lawsuit that his close ties with Kremlin leader Vladimir Putin do not mean that he is an ally in the war in Ukraine.

However, EU Council lawyers insisted that Timchenko, known in the media as “Putin’s chief treasurer,” contributes to the Russian economy through his connections at Bank Rossiya.

As the court explained, in connection with the complications of sanctions evasion schemes, the EU Council adopted a regulation on July 21, 2022, which obliges to report funds and cooperate with competent authorities. People perceive a failure to fulfil these obligations as a circumvention of sanctions.

The press release from the EU court stated, “From a practical point of view, the goal of the regulation is to prevent the use of complex legal and financial mechanisms that can, if not facilitate the circumvention of sanctions, at least make it difficult for competent national authorities to identify funds and economic resources subject to restrictive measures.”

The Russian National Settlement Depository (NRD), which is the primary custodian of Russian securities and plays an important role in the functioning of the Russian financial market, also failed to challenge the European sanctions.

As noted in the court’s decision, NSD provides “financial services that are of significant value to both the Russian government and the Russian Central Bank.”

“This enterprise provides quantitatively and qualitatively significant material or financial support to the Russian government, providing it with its financial resources in order to continue its activities to destabilize Ukraine,” the decision stressed.

In April, the Court of the European Union annulled the EU Council’s decision on February 28, 2022, on the introduction of sanctions against Aven and Fridman. The court indicated that the reasons for including the Russian oligarchs in the sanctions list were not sufficiently substantiated.

The court decision did not apply to later EU Council decisions, so the sanctions against these two Russians are still in effect. They are also under sanctions from the USA, the UK, Ukraine, and other countries because of their closeness to Russian dictator Putin.

Aven and Fridman are shareholders of Alfa Group, which includes Alfa Bank, one of Russia’s largest banks. Aven, who also holds Latvian citizenship, has been living in Latvia with his family since the Russian invasion of Ukraine in 2022.