Following from the recent geopolitical developments in Ukraine, there has been a heightened interest in sanctions, specifically, those sanctions being imposed against Russia. Through this series of articles, we aim to provide a general overview of the notion of sanctions, consider the local framework through which sanctions function in Malta, illustrate the general obligations which subject persons are required to observe vis-à-vis sanctions and discuss a general overview of the sanctions imposed by the EU against Russia.
In this fourth article, we shall consider some salient aspects on the EU sanctions imposed on Russia.
A common misconception on sanctions imposed against the Russian state is that these sanctions began with the commencement of the Ukraine war, in February 2022. Indeed, the first wave of sanctions dates back to March 2014 when the European Union (the “EU”) imposed restrictive measures against Russia, as a response to the illegal and unilateral annexation of Crimea and Sevastopol to Russia. The EU then expanded its measures in response to the recognition of the non-government-controlled areas of the Donetsk and Luhansk oblasts of Ukraine and the subsequent ordering of Russian armed forces into those areas of Ukraine. Since February 2022, further sanctions were also imposed by the EU following Russia’s military aggression in Ukraine.
The sanctions imposed are voluminous in nature and target several individuals, entities and organisations. The aim of these measures is to weaken Russia’s economic core, whilst also depriving it of key technologies and access to specific markets, and thus, fundamentally curtailing Russia’s ability to fund the war in Ukraine. Additionally, the aim of these sanctions is that of imposing clear economic and political consequences on Russia’s political elite and to diminish Russia’s economic base. In addition to this, the EU has also imposed a sanctions regime against Belarus, due the country’s relationship with Russia in this war. The restrictive measures cover a number of sectors, including the financial and business sector, the energy sector, the transportation sector, dual-use goods and services, restrictive measures relating to trade and measures related to visa applications.
The sanctions which are imposed by the EU are aimed at targeting specific economic sectors. These economic sanctions include measures related to the prohibition on trade in arms, public financing or financial assistance for trade with Russia, the prohibition of exports of dual-use goods which may contribute to Russia’s defense and security capabilities and the prohibition of exports of goods for use in the oil industry, amongst other restrictions.
The EU has also imposed restrictive measures such as travel bans and certain financial measures such as asset freezes and a prohibition on making funds or economic resources available. The EU has so far targeted over 1800 individuals and organisations with these measures due to their involvement in undermining Ukraine’s territorial integrity, sovereignty and independence. Russian-sanctioned individuals have had their accounts with EU banks frozen, have been banned from travelling anywhere within the EU and are unable to receive assets or funds from the EU. Similarly, sanctioned companies and organisations have also had their accounts with EU banks frozen and are unable to receive assets or funds from the EU.
The EU states that, as of June 2023, over € 24 billion worth of private assets in the EU have been frozen. A ‘Freeze and Seize’ Task Force has also been created to strengthen coordination between EU member states in order to ensure effective enforcement of EU sanctions.
There are a number of cases by the Court of Justice of the European Union (‘the “CJEU”) whereby the notion of delisting from designated (or consolidated) lists is considered by the Court. One such example is the Islamic Republic of Iran Shipping Lines (IRISL) vs the Council of the European Union (Joint Cases T-14/14 and T-87/14). IRISL was involved in the shipment of military-based cargo, including some prohibited cargo, from Iran. Three separate incidents of these shipments were reported to the United Nations Security Council Iran Sanctions Committee. The sanctions imposed against Iran had resulted due to a number of controversies around Iran’s nuclear program.
IRISL, together with a number of other entities, had challenged the general provisions relating to sanctions measures on the basis that there had been evident errors in the consideration of the evidence submitted. In 2010, the Council of the European Union (the “Council”) had listed IRISL on the EU’s Iran designated list on two criteria, namely, of its involvement in nuclear proliferation, and secondly, assisting designated entities with the evasion of sanctions. Although the CJEU had considered that the reasons provided by the Council on the second point to be too vague, it took into consideration the facts in favour of listing on the basis of IRISL’s involvement in nuclear proliferation, which was based on three separate incidents where IRISL had transported military material which ran counter to United Nations’ Security Council Resolutions.
The Court noted that the evidence provided by the Council was not sufficient to determine that IRISL was participating in nuclear proliferation and rejected the Council’s claims that it was unable to establish the shipments that were linked to nuclear proliferation because of the covert measures through which such shipments took place. As a result, in 2013, the Court annulled the listing on the basis that the Council had failed to establish sufficient evidence to prove that IRISL had assisted in Iran’s nuclear proliferation.
Despite this 2013 decision, the Council relisted IRISL on the EU’s Iran sanctions list and IRISL brought this decision to the attention of the General Court of the European Union. After considering the facts of this case, the Council’s decision was upheld by the General Court. The General Court had decided that, since new listing criteria were introduced through Decision 2013/497 and EU Regulation 971/2013 (concerning restrictive measures against Iran), these criteria were proportionate to the underlying aim of imposing restrictive measures against Iran. The General Court clarified that the criteria that had been applied in the decision of 2013 were to be distinguished from the new criteria under which IRISL had been re-listed, which had been done in terms of Decision 2013/497 and EU Regulation 971/2013. On this basis, the General Court dismissed the pleas raised by IRISL and held that the Council did not attempt to circumvent the 2013 judgement.
The European has created a website dedicated to providing information and guidance on the sanctions imposed against Russia. This website also provides a comprehensive Q&A on numerous topics related to these sanctions and their applicability in day-to-day life. For further information one may visit the following link: https://finance.ec.europa.eu/eu-and-world/sanctions-restrictive-measures/sanctions-adopted-following-russias-military-aggression-against-ukraine_en
It should also be noted that, in addition to these measures, other countries around the world, such as the United States of America and the United Kingdom, have their own specific set of restrictive measures imposed against Russia.