Brussels affirms that "the setbacks of the sanctions against the oligarchs are not that big a deal"

This article was originally published in English

The EU sanctions on Russian oligarchs, designed to put pressure on Vladimir Putin, face a number of legal problems but do not represent a strategic setback.

European courts have repeatedly overturned Travel bans and asset freezes imposed on those considered to be in Putin’s inner circle, most recently on bankers Mikhail Fridman and Petr Aven.

But that may be normal, experts say, as the bloc struggles to impose unprecedented measures in economic retaliation for the Ukraine war.

The EU Council, which brings together member states, says it has imposed Ukraine-linked restrictions on some 1,706 individuals and 419 entities, dwarfing the bloc’s other sanctions regimes.

Targets include President Putin, his officials and the media, which, according to the EU, spread disinformation about the Kremlinbut also a number of wealthy businessmen who are said to support the war.

Two weeks ago, the EU General Court overturned a high-profile EU decision, saying there was insufficient evidence that former Alfa Bank tycoons Aven and Fridman had helped Russian policymakers or undermined Ukraine. .

Sanctions against Aven and Fridman

The EU has won several of its most high-profile cases, including against former Chelsea FC owner Roman Abramovich and chemicals magnate Dmitry Mazepin. Although his son, Formula 1 driver Nikita Mazepin, won her case, as judges said mere family ties were not sufficient grounds to freeze the finances.

The ruling can still be appealed to the High Court of Justice, although Stano said EU members were still discussing the possibility of doing so in the case of Fridman and Aven.

Sanctions are time-limited and frequently renewed: judges often withdraw a sanction decision only to replace it with another, sometimes more consequential, list.

An extreme measure for which evidence is needed

As a result, the restrictive measures against Aven and Fridman remain in force despite the April ruling, said EU foreign spokesman Peter Stano, as the designations were renewed in March.

The sanctions are an extreme measure that requires a lot of evidence, and it is to be hoped that legal challenges will be successful, according to what an expert has told ‘Euronews’.

“You can’t sanction people simply for being influential businessmen,” he said. Clara Portela, professor of Political Science at the University of Valencia, in an interview. “You have to show that they supported the war effort or that they are working closely with Putin.”

Information from the secret services cannot be shared with judges

This has proven difficult amid the urgent need to impose sanctions following the 2022 invasion, and because secret intelligence evidence cannot be shared with judges.

“In the specific case of Russia, many people were included on the list very quickly,” Portela said. “Producing a testing package for hundreds of people is not something the EU has the capacity to do.”

In other cases, such as that of former Ukrainian President Viktor Yanukovych, the Council relied on novel tools designed to stop the misappropriation of state funds.

Although the court overturned the sanctions last December, the political scientist said there are still “plenty of criteria” to put Yanukovych back on the list, who was ousted after seeking closer ties to Putin and now lives in Russia.

The recent court rulings “are not necessarily a major setback,” Portela added, and are nothing new, even if they are now receiving more attention.

Why is the EU imposing sanctions on oligarchs?

Sanctions are intended to put indirect pressure on autocrats, persuading elites that they would be better off if someone else were in charge.

The approach was already seen in the Arab Spring and, to a certain extent, in the attempted and failed mutiny against Putin by Yevgeni Prigozhin, of the Wagner Group, says Portela.

However, EU sanctions also force oligarchs to choose between the West and Russia, in which case they distance themselves from Putin’s influence, or on the contrary become even more dependent and loyal to him, adds Clara Portela.

Furthermore, it is possible that the Kremlin also has its own means of influence, less bureaucratic but more effective than those of the EU.

In March 2022, the board of directors of the private company Lukoil called for an end to the Ukraine conflict.

Vitaly Robertus He was found hanged in his office last month. He was the fourth executive of the oil company to die under strange circumstances. His former president, Ravil Maganov, fell out of a hospital window.

Multiple challenges for the EU to make sanctions effective

EU sanctions face challenges that go beyond the purely judicial. Oligarchs can set up complex financial structures to evade them, with some blaming dirty money on loopholes in EU rules.

“The biggest problem is the inability to act against Russia,” said MEP Damien Carême (France/Greens) on Wednesday, April 24, just before a landslide vote to reform the regime. anti money laundering block.

“How can we claim to support Ukraine when Russian oligarchs close to Putin have luxury villas on the Cote d’Azur or megayachts in our ports?” Carême asked.

Would-be sanctions violators may be helped by the EU’s cumbersome decision-making process, which any member state can veto, giving oligarchs time to find an alternative solution.

The real effect of sanctions on the Russian economy

However, the sanctions on the elites are only part of a package of measures that, according to Stano, also They freeze 70% of the assets of the Russian banking systemas well as key sectors such as oil and semiconductors.

Those broader sanctions have not defeated Russia or stopped the war, but there is evidence that they are having an economic effect.

Western measures have led Moscow to impose capital controls and forced the NWF, Russia’s sovereign wealth fund, to deplete about half of its liquid assets to cover shortfalls, according to a report published in March by the School of Economy of kyiv.