In a significant development regarding European Union (EU) sanctions related to actions affecting Ukraine's territorial integrity, the General Court of the European Union in Luxembourg issued a ruling on September 6, 2023, annulling the renewal of sanctions imposed on Russian national Aleksandr Aleksandrovich Shulgin, a prominent businessman.
Shulgin had been included in the EU's sanctions list due to his role as the CEO of Ozon, a leading Russian multi-category e-commerce platform, and his participation in a meeting of Russian oligarchs with President Vladimir Putin to discuss the impact of Western sanctions.
The EU Council had initially placed Shulgin on the sanctions list in 2014, citing his influential business position and alleged support for actions undermining Ukraine's territorial integrity and sovereignty. Despite Shulgin resigning from his position at Ozon, the Council decided to extend the sanctions against him for an additional six-month period without providing new grounds or evidence to justify the extension.
Shulgin contested the renewal of sanctions, arguing that the Council had failed to consider his change in circumstances, specifically his resignation from Ozon, which should have altered his classification as an influential businessman. The General Court emphasized that restrictive measures are provisional and subject to periodic review, requiring the Council to assess the impact and relevance of sanctions based on changing factual and legal circumstances.
During the re-evaluation of Shulgin's situation, the General Court noted that while the overall context related to Ukraine had remained unchanged, Shulgin's circumstances had evolved. The court concluded that the basis for maintaining sanctions against him solely referred to his former role as CEO of Ozon, which was insufficient to justify the extension of sanctions after his resignation.
As a result, the General Court upheld Shulgin's plea and annulled both the initial and renewed sanctions against him.
Under EU regulations, the Council has two months from the notification of the judgment to adopt new restrictive measures against Shulgin, should it find them necessary. Additionally, the court ruled that each party involved should bear its own legal costs, as not all of Shulgin's arguments were accepted.
This ruling underscores the importance of a thorough and evolving assessment of individuals and entities subject to sanctions, highlighting the need for sanctions to align with changing circumstances and remain based on credible evidence.
By fLEXI tEAM