AG opinion in Rosneft’s EU reference

Advocate General Wathelet (the Belgian AG) has given an opinion in a request to the European Court of Justice for a preliminary ruling in relation to a judicial review brought in the UK by Rosneft (see previous blog) – Case C-72/15 Rosneft Oil Company OJSC v HM Treasury [2016].  His opinion is not binding on the ECJ. Rosneft’s judicial review challenges the Export Control (Russia, Crimea, and Sevastopol Sanctions) (Amendment) Order 2014 which gives effect to some of the EU’s sanctions on Russia in the UK.  When the ECJ gives judgment (in a few months’ time), the UK court will apply the ECJ’s judgment.

AG Wathelet considers that:

  1. Jurisdiction: the ECJ does have jurisdiction to give a preliminary ruling, after a detailed review of the parts of the EU’s common foreign & security policy that are reviewable and those that are not.
  2. Validity: Provisions of Regulation 833/2014 and Decision 2014/512, which it implements, are valid, apart from Article 3(5) of Regulation 833/2014, which allows a Member State to authorise certain transactions arising out of contracts concluded before 1 August 2014, which he considers invalid because it contradicts Decision 2014/512 on which it was based (which does not affect contracts concluded before 1 August 2014).
  3. Vagueness: Regulation 833/2014 was not too vague to mean that a member state could not impose criminal penalties for breach before its scope had been clarified by the Court of Justice.
  4. Interpretatation:
    1. the term “financial assistance” includes the processing of a payment by a bank or other financial institution relating to an underlying transaction covered by Article 3(1) of Regulation 833.
    2. Article 5(2) of Regulation 833 prohibits the issuing of or dealing with GDRs (global depository receipts) issued by Rosneft irrespective of when those shares were issued.
    3. The meaning of “waters deeper than 150m” is to be taken as meaning vertically from the point of drilling.

Ukraine de-lists foreign journalists but sanctions Russian media executives

The Ukrainian government has de-listed 29 foreign journalists from its targeted sanctions against people and entities it believes to be involved in the crisis in the east of Ukraine.  Among the de-listed are journalists associated with Russian state media, and others from Israel and Europe. Speaking in September last year, following Ukraine’s addition of around 382 people and 100 entities to the sanctions, EU Commissioner Johannes Hahn expressed his concern that sanctioning journalists was “not European in spirit” (see previous blog).

However, at the same time as de-listing journalist, Ukraine has imposed new sanctions on 17 executives and representatives of Russian media outlets.  The list of new targets includes General Director of TASS news agency Sergei Mikhailov, owner of the Pravda.Ru holding company Vadim Gorshenin, and Editor-In-Chief of television channel Russia Today Margarita Simonyan.

EU Court says no good reason to re-list Good Luck Shipping

The General Court of the EU has annulled Good Luck Shipping’s two re-listings in 2013 on the EU’s nuclear proliferation sanctions on Iran (now lifted by the JCPOA).  The judgment is here; Joined Cases T-423/13 & T-64/14 Good Luck Shipping v Council [2016].  Maya Lester QC acts for Good Luck Shipping.

Good Luck successfully challenged its original listing in 2011 (see previous blog) which had been on the basis of acting on behalf of the Islamic Republic of Iran Shipping Line (IRISL).  This 2nd case related to its two re-listings in 2013.  These listings were unlawful (and the Council ordered to pay the applicant’s costs) because:

  1. In the case of the 1st re-listing in June 2013, there was insufficient evidence; the Court said that a listing may only be assessed on the basis of evidence available to the Council at the time the listing was made, even if it could subsequently be justified by new evidence.
  2. The 2nd re-listing later in 2013 were unlawful because Good Luck had been re-listed on the basis of connections with IRISL at a time when IRISL’s own listing had been annulled.

EU renews Syria sanctions for 1 year

The EU has renewed its sanctions on Syria for another year, until 1 June 2017.  The sanctions regime currently includes an arms embargo, oil embargo, financial restrictions, and targeted travel bans and assets freezes on over 200 people and 70 entities.

In its press release, the EU Council said that the decision was in accordance with its principle that the sanctions would continue for as long as repression was taking place in Syria.  It also committed to taking a larger political role in support of resuming the intra-Syrian talks and finding an agreement for a genuine political transition in the country.

The EU also de-listed 2 people and amended the entries for 17 others.

See Implementing Regulation 2016/840 implementing Regulation 36/2012 and Decision 2016/850 amending Decision 2013/255/CFSP.  HM Treasury’s notice is here.

EU expands sanctions on North Korea

The EU has decided to expand its sanctions on North Korea, in view of what it called the “grave threat to international peace and security” posed by North Korea “in the region and beyond”.  In March this year the EU implemented the UN’s wide-ranging new sanctions on North Korea, which included a ban on importing North Korean coal, iron, and iron ore, a prohibition on financial institutions opening new branches, subsidiaries, or representative offices in North Korea, and made any cargo originating in or destined for North Korea liable for inspection.

The new measures include prohibitions on:

  • the import of petroleum products, luxury goods, and additional dual-use goods from North Korea;
  • providing any public financial support for trade with North Korea or transferring funds to and from the country without authorisation;
  • investment by North Korea in the EU, or by EU persons in the mining, refining, or chemical industry sectors in North Korea, or any entity engaged in its illegal programmes; and
  • North Korean aircraft landing in, taking off from, or flying over EU territory, and on North Korean vessels entering EU ports.

See Regulation 2016/841 amending Regulation 329/2007 and Decision 2016/849, which consolidates and replaces Decision 2013/183/CFSP for the sake of clarity.  The UK’s notice on the changes is here.

G7 leaders make joint statement on Russia sanctions

The leaders of the G7 countries, meeting in Japan this week, have made a joint statement reaffirming their position that the duration of sanctions on Russia should be clearly linked to Russia’s fulfilment of its obligations under the Minsk peace agreement (see previous blog).  In addition, they stated that they “stand ready to take further restrictive measures in order to increase the cost on Russia should its actions so require”.  The EU’s trade and economic sanctions on Crimea/Sevastopol and Russia are due for renewal in June & July this year.

However, the leaders of the G7 also said that they “recognise the importance of maintaining dialogue with Russia”.  German Chancellor Angela Merkel said that she had some “hope” of progress, and US President Barack Obama added that “we’ve started to see some progress in negotiations”, although he cautioned that “we’re still seeing too much violence”.  On Tuesday this week, 7 Ukrainian soldiers were killed in Eastern Ukraine following clashes with pro-Russia forces.

UN lifts all remaining sanctions on Liberia

The UN Security Council has lifted its arms embargo on non-state actors in Liberia, terminating the remainder of its Liberian sanctions regime.  In Resolution 2288, the Security Council welcomed the sustained progress made by the Government of Liberia in rebuilding Liberia for the benefit of all of its citizens in the wake of the civil war in 2003, and recalled its determination to terminate the sanctions once the provisions of the Comprehensive Peace Agreement had been fully implemented and the country and wider region were sufficiently stable and secure.

UN sanctions on Liberia have been gradually lifted since their imposition in 2003, to reflect its progress towards consolidating peace and rebuilding the country.  The EU joined it in lifting asset freezes and travel bans in October last year, and the US followed suit in November (see previous blogs here and here).

Canadian man imprisoned for US sanctions violations

A Canadian man has been sentenced in the US to 3 years in prison for violating US sanctions on Iran.  Ali Reza Parsa pleaded guilty to shipping high-tech electronics from the US, via a Canadian front company, to Iran between 2009 and 2015, where they had “both commercial and military uses”, including “in the production of rockets and missiles”.  Parsa is said to have provided US suppliers with false destination and end-user information in order to conceal the fact that the transactions breached US sanctions, and to have continued his operations using suppliers outside of the US while incarcerated.

The US Department of Justice’s press release is here.