The EU’s General Court in Luxembourg recently rejected an appeal by Uzbek-born Russian billionaire Alisher Usmanov against sanctions imposed on him. However, legal experts interviewed by the European Interest criticised the ruling for “lowering the bar to a fairly good level” as a debate rages in the European press over how sanctioned Russian businessmen should be treated, BNEIntellinews reports.
Nearly two years after the outbreak of war in Ukraine, the EU continues to strengthen the sanctions regime against Russia and is attempting to improve on the execution of the previous twelve rounds.
With the release of the thirteenth package of sanctions, due on 24 February, the list of individuals and entities targeted by EU sanctions will increase significantly from the 1,950 currently listed. The new sanctions will be aimed more at businessmen and less at goods.
However, due to the sketchy nature of much of the “evidence” used to justify the sanctions and seizure of their property, scores of oligarchs and Russian politicians are challenging the legality of the sanctions in European courts, and the German-language press in particular is questioning the legitimacy and legality of sanctions policies against individuals.
It is a battle between the EU’s power to freeze the assets of potential violators and strong European property laws that technically give wealthy Russians the same level of protection for their assets in Europe as EU citizens.
The thorny legal question of how to attribute blame to successful Russian businessmen and their complicity in the war in Ukraine has once again excited the public after Der Spiegel magazine wrote about the case of Arkady Volozh, founder and former CEO of Yandex, Russia’s leading search engine and Europe’s most valuable technology company.
Volozh sold Yandex on 5 February and left Russia before the war broke out. He is also one of two senior Russian businessmen who have openly and unequivocally criticised the war in Ukraine. As a result, the Kremlin labelled him a “traitor”, yet he remains on the EU sanctions list for supporting Russia because he owns Yandex and pays taxes that go to the military budget.
The authorities can freeze assets in the course of investigating offences, but these assets remain the property of their owner and can only be confiscated (ownership transferred) in the event of a criminal conviction in a court of law. And this is one of the problems, as none of the Russian oligarchs have been criminally charged in a European court, and there are no plans to bring charges, which they would welcome. They claim that as a result their assets have been frozen indefinitely without legal basis or mechanism of defence, and this is a de facto appropriation of their property.
The European Interest interviewed independent legal experts and scrutinised the court’s decision after ruling in the case of Usmanov, who denies his “closeness to Putin” and claims he was never an oligarch. The experts criticised the court’s decision for seemingly endorsing the EU Council’s position “without scrutinising the allegations against Usmanov”.
The court’s decision shows that it aims “to defend the Council’s position at all costs, no matter how far-fetched and speculative its allegations are,” the European Interest reported.
Usmanov has been accused of being “Putin’s favourite oligarch”, a charge that, according to bne IntelliNews research, originated as an unsubstantiated accusation by Swedish economist and senior Kremlin critic Anders Aslund. He was also accused of influencing the media narrative by owning the leading business newspaper Kommersant, an allegation that bne IntelliNews refuted in an in-depth investigation. The EU sanctions cite Usmanov’s alleged role in restricting the newspaper’s editorial freedoms and promoting pro-Kremlin views.
The EU clashed with comments made by a US Treasury Department official who, in March 2022, described Kommersant as “one of Russia’s most independent publishing companies”. The Economist also described Kommersant as one of the remaining publications in Russia that “are not organs of propaganda.” These allegations suggest that the EU selectively used press reports to justify its sanctions and little factual research was conducted in reaching its decision.
The EU court referred to several negative media articles, dismissing the evidence of the newspaper’s staff, who had first-hand knowledge of its editorial policy, as “irrelevant or insufficiently convincing”.
“To put it simply,” the expert said, “the court is saying that the evidence of [Usmanov’s] alleged actions and Kommersant’s pro-government editorial policy is relevant, whereas the evidence to the contrary is irrelevant. Such an obvious logical fallacy can only be explained by a lack of impartiality,” one of the legal experts, who were granted anonymity due to the politically charged nature of the topic, told European Interest.
When Usmanov took control of the business newspaper Kommersant, the paper’s editorial freedoms were restricted and it “took an explicitly pro-Kremlin stance”, which Zhelonkin denied in an exclusive interview bne IntelliNews, adding that the paper’s editorial policy was limited by media laws on war coverage.
European Interest’s legal experts opined that, “First, it suggests that the owner of a media outlet should be personally responsible for, and/or personally agrees with, every piece of content published by that outlet. This contradicts the generally established view that the owner of a news outlet should be impartial and avoid mixing personal views with editorial policy,” the experts said. “Second, the court appeared to disregard Kommersant’s long track record of publishing a variety of opinions from across the political spectrum,” that include the only wartime interview with Ukrainian President Volodymyr Zelensky by a Russian newspaper and an April 2023 interview with US Ambassador Lynne Tracy that criticised the state of bilateral relations with Russia and drew the ire of the Russian Foreign Ministry.
Experts highlighted the court’s narrow focus on Usmanov’s alleged efforts to destabilise the situation through Kommersant, ignoring other charges, making it impossible to defend sanctioned individuals. One of the legal experts said:
“It is typical for the EU General Court to review only one accusation, leaving the rest unchecked. In so doing, it avoids having to address the remaining allegations on their merit. While convenient for the EU General Court, this approach leaves sanctioned individuals without any means of defending themselves against defamatory statements made by the Council, even though these statements have major negative effects on their lives and reputations.”
After reviewing the case, the experts complained that the “evidence” presented as a basis for sanctions was based almost exclusively on press reports that were taken at face value. The use of unconfirmed press reports has come under increasing scrutiny.
Usmanov and his associate Roman Abramovich have won several libel cases in European courts, forcing newspapers to retract claims about their “closeness to Putin” and other allegations. In one of the most recent cases, in January this year, a German court ruled against Forbes magazine, which published an article claiming that Usmanov had “repeatedly sided with Putin and solved his business problems”, as unsubstantiated.
The EU Court of Justice also ignored a previous ruling against the Austrian newspaper Kurier, which was banned from calling Usmanov “one of Putin’s favourite oligarchs, as Putin himself called him” after failing to provide any evidence for this claim. Prior to this ban, the “favourite oligarch” claim had also featured prominently in the argument for sanctions against Usmanov and had become a widely repeated meme obscuring the origin of the claim.
According to the legal experts with whom this analysis was conducted, the court’s decision on Usmanov’s sanctions appeal suggests that the European legal system has lowered the bar, moving away from concrete evidence and logical reasoning towards a “good enough” approach. One of the legal experts in Brussels concluded:
“The court’s approach undermines the reputation of the EU’s judicial system and shows that the court has decided to act as an instrument to safeguard political decisions, and not as an institution responsible for restoring justice.”
