EU Court of Justice upholds sanctions against leading businesspersons operating in Russia

Following Russia’s full-scale invasion of Ukraine in February 2022, the EU imposed sanctions on individuals operating in sectors that generate significant revenue for the Russian Government.

Five businesspersons – Dmitry Alexandrovich Pumpyanskiy, Tigran Khudaverdyan, Viktor Filippovich Rashnikov, Dmitry Arkadievich Mazepin, and German Khan – challenged the sanctions before the EU courts. After their actions were dismissed by the General Court in 2023, appeals were brought before the Court of Justice.

In its judgment, the Court of Justice confirmed that the sanctions are justified. It emphasised that it is the economic sectors, rather than the businesspersons themselves, that constitute a substantial source of revenue for the Russian Government.

The Court also clarified that the “influence” of businesspersons must be assessed in the context of the economic environment in which they operate, regardless of any direct link to the Russian Government. Given their significant role in the Russian economy, such persons may indirectly contribute to the financing of actions destabilising Ukraine by supporting the profitability of the sectors in which they are active.

Furthermore, the Court underlined that the criteria underlying restrictive measures are lawful unless they are manifestly inappropriate. Such criteria may target categories of persons that have an objective link to a third country subject to EU sanctions, even if that link is indirect and independent of any individual conduct.

In this case, the Court found an objective link between businesspersons active in sectors that are economically significant for Russia and the EU’s objective of increasing pressure on the country and raising the cost of its actions against Ukraine.

Finally, the Court confirmed that restrictive measures are proportionate if they are not manifestly inappropriate for achieving their legitimate objective and do not exceed what is necessary to achieve it. These conditions were met in the present cases.

The judgment reinforces the legal framework of the EU sanctions regime and confirms the approach of applying economic pressure to persons associated with strategically important sectors of the Russian economy.