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European Court gives its first judgment on sanctions against Russia

30/11/16

The General Court of the European Union in Luxembourg has given its judgment today in Case T-720/14 brought by Arkady Rotenberg, the first case in which someone has challenged the EU’s Russia sanctions regime.

The Court held that Mr Rotenberg’s original listing in July 2014 was unlawful, because the EU could not prove that he held shares in two companies the EU said showed he was "associated with people responsible for undermining the territorial integrity of Ukraine" (in order to fulfil that criterion, the Court said the EU would have to have demonstrated “a direct or indirect link” between the activities or actions of listed people and the situation in Ukraine).  And because the EU institutions could not show that he “benefited from decision-makers who were responsible for the annexation of Crimea”, because the EU Council had relied on contracts Mr Rotenberg’s companies had won for the Sochi Olympics that had been awarded before President Putin had threatened the annexation of Crimea.  The Court said that in order for that criterion to satisfy the principle of legal certainty, it had to be interpreted to mean that the Russian decision-makers in question (who had to be named) “should already at the very least have started to prepare the annexation of Crime and the destabilisation of Eastern Ukraine” in which case those benefiting from those decision- makers could not have been “unaware of the involvement of those decision-makers” in those preparations, and that they would be prevented from supporting those decision-makers by the resources they derived from those benefits being targeted.

Mr Rotenberg’s listing in July 2015 was also in part unlawful because it repeated those two reasons.  However, the July 2015 listing was upheld because it had added two new reasons for suggesting that Mr Rotenberg had benefited from decision-makers (in this case President Putin) responsible for annexation of Crimea which the Court said were sufficient, namely that Mr Rotenberg:

  • owns Stroygazmontazh which had been awarded a contract to build a bridge between Russia and Crimea, which the Court held would undermine Ukraine’s territorial integrity; and 
  • is the Chairman of the publishing house Prosvescheniye, and as chairman the Court said Mr Rotenberg “could not reasonably have been unaware of the editorial line in publications of the publishing house which he headed” namely a public relations campaign to persuade Crimean children that they are Russian citizens. 

Maya Lester QC and Zahra Al-Rikabi appeared for Mr Rotenberg.  

Maya's analysis of the judgment is here