We reported in September 2016 that the EU General Court had annulled the 2014 designation of Andriy Klyuyev (former Head of Administration of the President of Ukraine) under the EU’s sanctions relating to the misappropriation of Ukrainian state funds. However, the Court upheld his 2015 listing, as subsequently amended by the EU Council (see previous blog).
This week (11 July 2018), the same Court decided to uphold Mr Klyuyev’s 2016 listing but annulled his 2017 re-listing, see judgment: Klyuyev v Council T-240/16. The Court held that the information relied upon by the Council in maintaining Mr Klyuyev’s 2017 listing, as set out in letters from Ukraine’s Prosecutor General, had been “incomplete and tainted with inconsistencies”. Accordingly, when considered alongside the exculpatory evidence presented by Mr Klyuyev, the Council ought to have investigated further and sought clarification from the Ukrainian authorities. The Court held that the Council had therefore committed a manifest error of assessment in having considered that it was not required to take into account the evidence produced by Mr Klyuyev or to make further enquiries of the Ukrainian authorities.
In March 2018, Mr Klyuyev was re-listed until 6 March 2019 under Council Decision (CFSP) 2018/333. That 2018 re-listing, however, was not addressed in the present judgment. As a result, Mr Klyuyev continues to remain on the EU sanctions list (subject to an asset freeze).
The EU has prolonged its sanctions targeting the financial, energy and defence sectors of the Russian economy until 31 January 2019, see Council Decision (CFSP) 2018/964 (we reported last week that EU leaders had agreed to continue the sanctions). The EU measures were originally introduced in July 2014 for 1 year (and strengthened in September 2014) in response to “Russia’s actions destabilising the situation in Ukraine”. EU press release here (includes a summary of the sanctions prolonged by this Decision).
On 29 June 2018, at an EU summit in Brussels, European leaders agreed to extend for 6 months the EU’s sanctions on Russia which target the financial, energy and defence sectors of the Russian economy. The measures were originally introduced in July 2014 for 1 year in response to Russia’s actions “destabilising the situation in Ukraine”. The sanctions have been renewed every 6 months since adoption.
Ukraine’s President Petro Poroshenko has signed a decree to expand sanctions on 30 Russian entities and 14 individuals. Press release here.
In line with the US OFAC action of 11 June 2018, which targeted supporters of Russia’s Federal Security Service (a designated entity), sanctions were imposed on the following 5 entities: Research Institute Kvant; Open Company Dyevtekhnoservice; Digital Security Technologies LLC; ERPScan BV; and Embedi Limited. The other 25-sanctioned entities include 13 Russian political parties and public organisations that participated in preparing and conducting an “unlawful vote in the territory of [Crimea and Sevastopol]”, as well as 12 Russian enterprises of “military-industrial complex”.
The 14 individuals were sanctioned for being involved in the “preparation and conduct of illegal voting in the territory of [Crimea and Sevastopol]”, including US-designated Russian billionaire Arkady Rothenberg and his family members.
The EU has extended for 1 year its sanctions in response to the illegal annexation of Crimea and Sevastopol by Russia until 23 June 2019, see Council Decision (CFSP) 2018/880. These sanctions (which apply to EU persons and EU based companies) are limited to the territory of Crimea and Sevastopol, and include:
(1) An import ban into the EU on goods from Crimea and Sevastopol;
(2) Restrictions on EU trade and investment related to certain economic sectors and infrastructure projects in Crimea and Sevastopol;
(3) A prohibition to supply tourism services in Crimea or Sevastopol; and
(4) An export ban for certain goods and technologies to Crimean companies or for use in Crimea in the transport, telecommunications and energy sectors and related to the prospection, exploration and production of oil, gas and mineral resources. Technical assistance, brokering, construction or engineering services related to infrastructure in these sectors must not be provided either. EU press release here, and UK Export Control Joint Unit Notice here.
The US Department of Justice has announced that 8 businessmen – 5 Russian nationals and 3 Syrian nationals – have been indicted on federal charges for conspiracy to violate US sanctions against Syria and Crimea/Ukraine; namely, by sending jet fuel to Syria and making US dollar wires to Syria and to sanctioned entities (in the absence of a US licence).
The indictment involves transactions conducted by Joint Stock Company Sovfracht (Sovfracht), a Russian shipping company and freight forwarder, which was designated by OFAC in September 2016 for Crimean sanctions violations. The 5 Russian nationals – Ivan Okorokov, Ilya Loginov, Karen Stepanyan, Alexey Konkov and Liudmila Shmelkova – are employees of Sovfracht. Yaser Naser is a Syrian national who worked on behalf of Sovfracht in Syria to coordinate its business there. Farid Bitar and Gabriel Bitar are petroleum inspectors at Port Banias, Syria.
The EU General Court has given two Ukraine misappropriation judgments: Arbuzov v Council T-258/17 and Lukash v Council T-210/16.
The Court annulled the listing of Olena Lukash (current Ukraine politician, former Minister of Justice), although she is no longer listed – the EU decided in March 2018 not to extend her listing when it came for renewal, see Council Decision (CFSP) 2018/333.
In respect of Sergei Arbuzov (former Prime Minister of Ukraine), the Court annulled his re-listing. We previously reported that the Court had annulled his original designation in January 2016 (because the only basis for saying he was “responsible for misappropriating Ukrainian state funds” was a letter in March 2014 from Ukraine’s Prosecutor General that gave no details of the matters alleged against him or the nature of his alleged responsibility), but had upheld his re-listing in July 2017 (there was now sufficient evidence that he was “subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets”).
The Court has now annulled Mr Arbuzov’s 2nd re-listing on the basis that the Council had made a manifest error of assessment in concluding that Mr Arbuzov’s observations concerning the lack of progress in the Ukrainian criminal proceedings had not justified further checks by the Council. The Court said the comments had raised legitimate questions as to the sufficiency of the information provided by the Ukrainian Prosecutor General regarding the criminal proceedings against Mr Arbuzov. Accordingly, the Council should have carried out additional checks with the Ukrainian authorities to clarify the reasons justifying the lack of progress in the criminal proceedings.
Mr Arbuzov was re-listed in March 2018 by Council Decision (CFSP) 2018/333 for the same reasons (2018 re-listing not addressed by this judgment).
On 14 May 2018, the EU adopted Council Decision (CFSP) 2018/706, which added 5 people to its targeted sanctions on those said to be responsible for undermining the territorial integrity of Ukraine, namely, for being involved in the “organisation of the Russian presidential elections of 18 March 2018 in the illegally annexed Crimea and Sevastopol” (previous blog). The EU announced yesterday that Montenegro, Albania, Norway and Ukraine have aligned themselves with that Decision. EU press release here.
On 28 May 2018, the EU adopted Council Decision (CFSP) 2018/778, which extended its Syria sanctions until 1 June 2019 (previous blog). The EU announced yesterday that Macedonia, Montenegro, Serbia, Albania, Iceland, Liechtenstein, Norway, Moldova and Georgia have aligned themselves with that Decision. EU press release here.