How sanctions against russian entities improved our understanding of the EU sectoral restrictive measures

In the scope of Russian sectoral restrictions, objectives do not include the withdrawal of troops from Ukraine regions, the suspension of military equipment and technology supplies to the self-proclaimed republics;

The reference to the Bank's shareholders and clients costs, including foreign ones, is irrelevant because the unilateral sanctions are aimed at achieving publically significant objectives;

The Council should only prove that it is reasonably possible to alter the state's actions by introducing sectoral restrictions. No one has the right to require them to provide evidence of actual achievement of these goals;

An applicant who refers to available alternative measures that could replace the imposed sanctions must provide clear and accurate evidence. For instance, the ECJ rejected VTB's argument about alternative measures based on lack of proofs;

Banking and oil industries are the vital economic sectors of the Russian Federation. This fact leads to similar conditions in which these industries exist. In this connection, legal positions from one sector could be applied to both.

The lack of previous successful case-law contributed to the refusals to the banks. The decisions were left unchanged by appeal.

Oil Sector

The oil sector was represented only by Rosneft in the ECJ appeal C-732/18 P Rosnefte.a v Council. Appeal brought on 23 November 2018.. The oil company challenged the General Court's judgment and provided the following tenets:

The General Court erred considering that the Council had adequately fulfilled its duty to justify export restrictions;

The General Court erred when considering that the Council had adequately fulfilled its duty to justify restrictions on access to the financial market;

There is no causal relationship between the restrictive measures imposed on the oil industry and the goals pursued by such sanctions;

Export restrictions violate the right to property and freedom to conduct a business;

The ban on meeting the requirements of sanctioned individuals violates the right to property;

Restrictions on access to the financial market violate to conduct a business;

Export restrictions and restrictions on access to the financial market infringe the EU-Russia Partnership and Cooperation Agreement, and the provisions of the GATT as well.

The following legal positions should be highlighted C-732/18 P Rosnefte.a v Council. Judgment of 17 September 2020.:

Restrictive measures are introduced by non-individual normative acts that are aimed, among others, at the Russian oil industry. The number of legal persons that are subject to restrictions may be small due to the characteristics of the selected economic sector;

The ban on meeting the requirements of sanctioned individuals is proportionate to the imposed restrictions because it facilitates their effectiveness and contributes to the achievement of the goals;

Case law establishes that the General Court's arguments may be implied if interested persons are not deprived of the right to determine why the authority did not support their arguments.

The ECJ appeal rejected all seven arguments put forward by Rosneft to challenge the first judgment. The applicant did not offer new arguments, thus, the result was inevitable.

CONCLUSION

Russian legal entities and their subsidiaries did not succeed in their delisting. The applicants' arguments often duplicated each other and were rejected by the General Court and the ECJ with reference to Judgment and other relevant practice -- Amazon EU C-649/17, Islamic Republic of Iran Shipping Lines and Others C 225/17 P, HX v Council C 540/18 P, Melli Bank v Council C 380/09 P. Having in mind that the applicants had exhausted the judicial mechanism, all challenged judgments entered into legal force. At the same time, the acts studied in this paper allow us to formulate theoretical conclusions about European Union sectoral restrictive measures:

Restrictive measures are introduced and applied lawfully, including their sectoral variety;

Sectoral sanctions are imposed against significant sectors of the state's economy to change its actions;

This type of restrictive measures does not need to be approved by the UN Security Council;

EU international treaties should not contradict primary law; therefore, the lack of an explicit provision in an international treaty on the possibility of introducing sectoral restrictive measures does not prevent their adoption;

The imposition of such sanctions has a publicly significant objective, which is set out in Article 21 TEU;

The purpose of EU restrictions is not to punish;

The Council should only prove that it is reasonably possible to change the state's course of actions when introducing sectoral restrictions;

The Council has discretion in determining the restrictive measures to be imposed and the addressee of sanctions;

The influence on subsidiaries of persons included in the sanctions list contributes to the achievement of the goals;

Restrictions on state-owned enterprises are legitimate. They are not inappropriate because of its importance to the country's economy;

Sectoral sanctions have negative consequences, not only for legal persons in the sanctions list. This situation is legitimate due to the achievement of publicly significant objectives provided in Article 21 TEU;

The disproportionality of sectoral sanctions will be established if they do not meet the goals;

EU sectoral sanctions addressee, based on the international context, can understand the reasons and justification for restrictions;

Presumption of context-knowledge towards the state-owned companies;

The non-involvement of persons included in the sectoral list in the policy of the state whose course of actions the EU is trying to change does not have legal significance;

Right to property, freedom to conduct a business, right to an effective remedy, and a fair trial are not infringed with unilateral sanctions if several conditions are met;

Legal entities have the right to claim sectoral sanctions in the General Court and the ECJ;

The ECJ judicial control over sanctions acts is limited to checking compliance with procedures, whether the limitations' motivation is adequately justified and the decisions are relevant to the actual circumstances; and the absence of an abuse of power.

Under res judicata, the designated legal positions formulated by the General Court and the ECJ in reviewed cases will be necessary for understanding the phenomenon of EU sectoral restrictive measures.

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