On September 6, the General Court handed down 8 judgments concerning the sanctions imposed by the European Union on Russia and Belarus. The decisions rule on actions for annulment brought by various natural persons who are the subject, in seven of the cases, of the restrictions against Russia and, in one of the cases, of those against Belarus.
Only one of the appellants has obtained a partially favorable judgment (Case T364/22, Shulgin v. Council), although as we will see below, the decision can be considered to be in their best interests. The other seven appellants have had their claims denied.
In general, the eight rulings do not contain major new jurisprudential developments. Rather, they are decisions in which the sentencing chambers project previous case law on the specific cases being tried. Thus, we can see that the appellants alleged in their claims several of the grounds for annulment that are usually alleged in this type of litigation, such as: infringement of fundamental rights, especially the right to property, breach of the obligation to state reasons, infringement of the right to be heard, etc. These grounds have not been successful and the General Court, in rejecting them, has invoked several previous judgments.
However, the main plea raised in all cases is that of error of assessment, i.e. that the grounds alleged by the Council for imposing its restrictions have no factual basis, i.e. are not real, or are cases in which the Council has not been able to present solid evidence to support such grounds. In this regard, it should be borne in mind that in Case T-364/22 (Shulgin v. Council) the successful ground for annulment was precisely that of error of assessment. In the other cases, however, this plea was unsuccessful because the Council complied with its obligation to prove certain facts.
The Shulgin case deserves to be considered at some length. On April 8, 2022 by the initial acts (Decision (CFSP) 2022/582 and Implementing Regulation (EU) 2022/581) Mr. Shulgin was sanctioned primarily for being an influential businessman and the CEO of Ozon Group, an important leading e-commerce platform in Russia. He subsequently stepped down as CEO of Ozon and thus in the first maintenance acts extending the sanctions (Decision (CFSP) 2022/1530 and Implementing Regulation (EU) 2022/1529) he was sanctioned primarily for being an influential businessman who was the CEO of Ozon. Finally, the second maintenance acts (Decision (CFSP) 2023/572 and Implementing Regulation (EU) 2023/571) maintained the same motivation.
In this situation, Mr. Shulgin appealed against all the rules that affected him and emphasized that the Board had not taken into account the evolution of his personal situation. Indeed, the Board at first credited without difficulty that he was then CEO of Ozon. Subsequently, however, when Mr. Shulgin left that position, the Board failed to present evidence as to why it continued to consider him an influential businessman once he had left that chairmanship. The General Court, relying repeatedly on the judgment in Ovsyannikov v. Council (Case 714/20) recalled the need for a current assessment of the grounds for sanctions and that the Council could not present evidence that had become obsolete; it therefore partially agreed with the appellant in annulling only the first and second acts of maintenance, which were those in respect of which the Council had not presented evidence justifying the maintenance of the sanctions.
The annulment of the first and second acts of maintenance is very favorable to Mr. Shulgin’s interests. But it should be borne in mind that the judgment itself decides to maintain the effects of Decision 2023/572 – one of the second maintenance acts – in respect of Mr. Shulgin until the date of expiry of the time limit for bringing an appeal or, if an appeal is brought within that time limit, until the appeal is dismissed, if any. However, in the rules published in the Official Journal of the European Union of September 14, 2023, his name has been expressly excluded from the list of sanctioned individuals.
The Shulgin case invites us to a final reflection on the increasingly evident reality that nowadays practically the only ground on which the annulment of European sanctions can be obtained is that of error of assessment.
We would also like to make a brief reference to the judgments in cases T-272/22 (Pumpyanskaya/Council) and T-361/22 (Elena Petrovna Timchenko/Council and the Commission). Both cases concern women sanctioned for being associated with their husbands, important businessmen who were also sanctioned. In these judgments, the General Court reiterates the doctrine established in its judgment of 8 March 2023 (Prigozhina v. Council; T-212/22) and states that the concept of association covers persons linked by common interests, without it being necessary, however, for there to be a relationship through an economic activity, but that, nevertheless, it cannot be based exclusively on a family relationship. That is to say, there must be a conjunction or superposition of interests, which in most cases will be economic interests although they may be of another nature and the purely family relationship alone does not imply association.
Finally, it should be recalled that the eight judgments may be appealed before the Court of Justice. In the near future, the General Court will issue numerous rulings on sanctioned Russian individuals and legal entities, and we will keep an eye on them and the jurisprudential developments that they may entail.
In collaboration with José Luis Iriarte, Professor of Private International Law at the Universidad Pública de Navarra.
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