1st EU Russia sanctions judgment – Arkady Rotenberg’s 1st listing was unlawful and 2nd lawful in part

The General Court of the EU has today decided the 1st case challenging the legality of a Russian EU sanctions listing. The case was brought by Arkady Rotenberg and the judgment is here – Case T-720/14 Rotenberg v Council.  Maya Lester QC appeared for Mr Rotenberg.

The Court held that Mr Rotenberg’s original listing in July 2014 was unlawful. This was because the EU could not prove that he:

  • Was “associated with people responsible for undermining the territorial integrity of Ukraine” because the EU could not prove that AR was a shareholder in / controlled Giprotransmost or a beneficial owner of Volgomost, which had conducted a feasibility study into the construction of  bridge from Russia into Crimea. 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.
  • “Benefitted from decision-makers who were responsible for the annexation of Crimea”, because the EU 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 Crimea and the destabilisation of Eastern Ukraine” in which case those benefitting 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 2 reasons.  However, the July 2015 listing was upheld because it had added 2 new reasons for suggesting that Mr Rotenberg had benefitted from decision-makers (in this case President Putin) responsible for the 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.

The applicant’s additional arguments on the vagueness of reasons, proportionality, rights of defence and data protection did not succeed. Each side was ordered to bear its own costs.

Ayatollah Khamenei says Iran will retaliate if US extends Iran sanctions

tehran-1Iran’s Supreme Leader Ayatollah Ali Khamenei has threatened to take action if the US Senate and President Obama follow the House of Representatives extending sanctions against Iran under the Iran Sanctions Act for another 10 years (see previous blog).

Although the JCPOA nuclear-deal with Iran commits the US to lifting some if its sanctions against Iran, it leaves many US sanctions largely untouched, including a general ban on trade with Iran, a prohibition on Iran accessing the US financial system, and restrictions on use of the dollar.

UN to impose new sanctions on N Korea

north-korean-soldier-1The 5 permanent members of the UN Security Council are meeting to approve new sanctions on North Korea, aimed at substantially cutting its revenue from exports.  Reports suggest that the new resolution could cut North Korea’s export revenue of $3bn by at least $800m, by capping exports of coal, helicopters, vessels, and statues.  The new sanctions, if confirmed, will also impose asset freezes and travel bans on 11 people and 10 entities for alleged roles in North Korea’s nuclear and ballistic missile programmes.

China, a major importer of North Korean coal, is said to support the new sanctions, but Russia is not yet reported to have given them its backing.

Vadzim Ipatau’s 2nd Belarus case rejected

The General Court of the EU has rejected Vadzim Ipatau’s 2nd application for his listing on the EU’s sanctions against Belarus to be annulled – in Joined Cases T-694/13 & T-2/15 Ipatau v Council [2016].  The reason given for his listing on these measures which target people (inter alia) responsible for violations of electoral standards in Belarus, is that he is the Vice-President of Belarus’ highest electoral authority (the CEC).

This is the same as the reason given for his previous designation; the revised version adds Mr Ipatau’s involvement in the Parliamentary elections of September 2012, in addition presidential election of December 2010. His previous application for annulment was dismissed by the General Court in a judgment upheld by ECJ in June 2015 (see previous blog). This case is very similar; the Court said the reasons for his listing sufficiently clear, Mr Ipatau did not dispute that he was Vice-President of the CEC, the highest electoral authority in Belarus, and an OSCE report supported the Council’s reasons. The Court (as it usually does) rejected the rights of defence and proportionality arguments and ordered the applicant to pay the Council’s costs.

New US terrorism designations

The US State Department has added 6 people to OFAC’s SDN List, designating them as Specially Designated Global Terrorists (SDGTs).

ISIL

Abdullah al-Meshedani, Basil Hassan, and Abdelilah Himich have been designated for supporting ISIL.  All 3 are said to be involved in ISIL’s external operations or the recruitment and management of foreign terrorist fighters, and Himich was allegedly involved in the planning of the Paris and Brussels attacks last year.

Shining Path

Victor Palomino, Jorge Palomino, and Tarcela Vilchez have been designated for their leadership roles in the designated Peruvian organisation Shining Path, which is said to be committed to violently overthrowing the Peruvian government.  Victor and Jorge Palmonio were designated as SDGTs in addition to their existing designations as Narcotics Trafficking Kingpins.

UK updates 5 dual-use OGELs

The UK has updated and amended 5 of its Open General Export Licences (OGELs) relating to the export of dual-use items. The action updates the goods-schedule of each relevant licence and removes Ivory Coast and Liberia from the list of excluded destinations for the OGEL “PCBs and components for dual-use items”.  This follows the lifting of EU sanctions against them earlier this year (see previous blogs on Ivory Coast and Liberia).  In addition, the OGEL “international non-proliferation regime decontrols” has been revoked as it is no longer of use to exporters.  The licences now refer to the new Department for International Trade, of which the Export Control Organisation is a part.

The action reflects changes made by the EU to its dual-use list earlier this month (see Regulation 2016/1969).  The details are here.

OFAC Zimbabwe & narcotics de-listings

Zimbabwe

OFAC has de-listed Slyvester Nguni, previously a member of President Robert Mugabe’s ZANU-PF political party and former minister who now belongs to opposition party Zimbabwe People First.  He was expelled from ZANU-PF for allegedly supporting Joice Mujuru, another ex-party member who was expelled following accusations that he tried to depose President Mugabe.

Narcotics

OFAC has de-listed 9 people and 3 entities who were designated as SDNs under its anti-narcotics sanctions, and amended the entries for 2 others.

The details are here.

Switzerland mirrors EU & US sanctions on Crimean parliamentarians

switzerland-flag-1Switzerland has followed the EU (blog here) and US (blog here) in imposing sanctions on 6 Russian parliamentarians elected to represent the annexed Crimea region of Ukraine in September.  Neither the EU nor US recognise the legitimacy of the elections.