2 more EU Ukraine misappropriation judgments: Klymenko’s listing upheld, Ivanyushchenko’s annulled

CJEU1Two new EU General Court Ukraine misappropriation judgments – Klymenko v Council T-245/15 and Ivanyushchenko v Council T-246/15.

As we have reported, the Court has annulled designations on the EU Ukraine list which imposes restrictive measures on those said to be “responsible for misappropriating Ukrainian state funds”, where there is insufficient evidence that the relevant person is “subject to criminal proceedings by the Ukrainian authorities for the misappropriation of public funds or assets”.

In the two most recent judgments, the Court considered the information set out in various letters from the prosecutors to decide whether it was sufficiently specific and up to date as regards the allegations against each applicant to form the basis for EU designation. In Mr Ivanyushchenko’s case, the Court annulled his designation because the evidence was beset with inconsistencies or irrelevant, such that the Council should have had doubts about its accuracy and sought further information. In Mr Klymenko’s case, the Court declined to annul.

Ukraine sanctions 18 Russian companies

Ukraine1.jpgUkraine’s Ministry of Economic Development and Trade has imposed sanctions against 18 Russian companies for actions that “may harm the interests of national economic security” (orders No. 1582 and 1583). The sanctions prohibit economic activity in Ukraine for those entities from 9 December 2017.

The entities are reported to be: Loli-Pak Exports, the Snack Group, Belgorod Khladokombinat, Donspetsstroy Trading House, Yuzhtrans, Mikas, Stroyservis, Volma-Marketing, the Penetron-Russia group of companies, the Penetron-Russia Trading House, Penetron-Export, Volma-VTR, Penetron, Aromadon Trading House, the Starfud-Yug Trading House, MK-Metiz, Narodny Plastic, and Miroshnikova Irina Vladimirovna.

ECJ rejects Yanukovych appeals

CJEU1The European Court of Justice has dismissed the appeals of Viktor Yanukovych, former President of Ukraine, and his son Oleksandr Yanukovych, against the General Court judgments refusing to annul their listings on the EU’s Ukraine misappropriation sanctions. Links to judgments here: C-598/16 and C-599/16, both of 19 October 2017. Judgments below here: T-346/14 and T-348/14.

We previously reported that the General Court annulled their original listings, which had said that they were “subject to investigation in Ukraine…for the embezzlement of Ukrainian state funds”, for the same reason as all the Court’s previous Ukraine judgments (see eg previous blog here), namely that the listings were only based on a letter from Ukraine’s prosecutor stating that investigations had been opened into a number of former senior officials to establish the misappropriation of public funds, but said nothing about what each individual was accused of.  The Court then upheld the amended reasons given in subsequent listings saying that they were “subject to criminal proceedings” by the Ukrainian authorities for the “misappropriation of public funds or assets”, on the basis of a Ukrainian prosecutors’ letter.

The ECJ upheld this approach, and regarded the appeals as a request impermissibly for the appeal court to reassess the facts found by the court below, and dismissed the arguments that the listing criterion for the Ukraine misappropriation regime did not pursue a valid foreign policy objective or that the General Court had been wrong to rely on the Ukrainian prosecutor’s letter as a sufficient underpinning for the sanctions.

Australia renews Russia sanctions

Australia has renewed its sanctions against people and entities said to be threatening the territorial integrity of Ukraine for 3 years, or until Russia fulfils its obligations set out in the Minsk Peace Agreements. There are 153 people and 48 entities targeted by these measures.

EU extends and updates Russia/Ukraine sanctions

The EU has extended its sanctions on people and entities that are said to be undermining the territorial integrity of Ukraine for 6 months until 15 March 2018.  It has also added Crimean Sea Ports to its list of designated people and entities, amended the sanctions to include a derogation for payments to Crimean Sea Ports for certain services, and updated the listing information for several people subject to the sanctions. In addition, it has deleted the entries for 4 deceased people, and deleted the entries for 3 entities to reflect a change in ownership structure.

See Council Regulation 2017/1547 amending Council Regulation 269/2014, Council Implementing Regulation 2017/1549 implementing Council Regulation 269/2014, and Council Decision (CFSP) 2017/1561 amending Council Decision 2014/145/CFSP. The EU’s notice to listed persons is here, and the UK government’s notice is here.

Russian court rejects Siemens’ application to seize gas turbines shipped to Crimea

A Russian Court has dismissed an application brought by Siemens for an injunction to seize gas turbines it produced with Russian firm Technopromexport, shipped to Crimea by the Russian firm in alleged contravention of EU sanctions (see previous blog). EU people and entities are prohibited from providing certain technology to Crimea for use in its energy sector.

The turbines are crucial for providing electricity to the Crimea region, which was promised a stable power supply by the Russian government but has endured frequent blackouts. Siemens says that there was a written agreement with its Russian partner not to export the turbines to Crimea. Preliminary hearings in Siemens’ case against Technopromexport are due to begin next month.

EU sanctions those involved in the illegal export of turbines to Crimea

Last month, we reported that Germany-based firm Siemens had brought proceedings against Russian firm Technopromexport for exporting Siemens-built power turbines to Crimea in apparent violation of EU sanctions (see previous blog).  The EU has now sanctioned Technopromexport for exporting the turbines to Crimea, along with 2 other entities and 3 people connected with the export.

See Council Implementing Regulation (EU) 2017/1417 implementing Council Regulation (EU) 269/2014 and Council Decision (CFSP) 2017/1418 amending Council Decision 2014/145/CFSP. The EU’s notice is here, and the UK’s notice is here.

President Trump signs new sanctions on Russia, Iran, DPRK into law

President Trump today signed a bill passed by Congress last week, which imposes new sanctions on Russia, Iran, and North Korea (see previous blog). The Countering America’s Adversaries Through Sanctions Act restricts the President’s ability to lift sanctions without Congressional approval.  President Trump’s statement on signing the Act makes the following remarks:

“…the bill remains seriously flawed – particularly because it encroaches on the executive branch’s authority to negotiate…  By limiting the Executive’s flexibility, this bill makes it harder for the United States to strike good deals for the American people, and will drive China, Russia, and North Korea much closer together.  The Framers of our Constitution put foreign affairs in the hands of the President.  This bill will prove the wisdom of that choice.

Yet despite its problems, I am signing this bill for the sake of national unity.  It represents the will of the American people to see Russia take steps to improve relations with the United States.  We hope there will be cooperation between our two countries on major global issues so that these sanctions will no longer be necessary… I built a truly great company worth many billions of dollars.  That is a big part of the reason I was elected.  As President, I can make far better deals with foreign countries than Congress.”

In response to the bill passing through Congress, Russia ordered the expulsion of 755 US diplomatic staff from the country.