Rosneft petrol station
(LUXEMBOURG) – The European Court of Justice on Tuesday declared valid EU sanctions against Russian companies in response to the crisis in Ukraine, including Rosneft, the state-owned Russian oil giant.
The EU Council agreed in July 2014 sanctions in response to actions of Russia to destabilise the situation in Ukraine.
The measures imposed restrictions on certain financial transactions and on the export of certain sensitive goods and technologies, restricted the access of certain Russian entities to the capital market and prohibited the provision of services required for certain oil transactions.
The objective of the measures was to increase the cost of the actions taken by Russia to undermine the sovereignty of Ukraine.
One of the companies targeted by the measures was the Russian company, Rosneft, which specialises in the oil and gas sector.
Rosneft had challenged the validity of the sanctions, in the light of EU law, at the UK’s High Court.
The referring court sought, in particular, to ascertain whether the UK was entitled, in the event of an infringement of the restrictive measures, to establish criminal penalties before the Court had clarified the meaning of terms used by the Council. Second, it asked whether the restrictive measures related to the processing of payments by banks and prohibit the issuance of Global Depositary Receipts representing shares issued before the adoption of those measures.
In its judgment, the Court considered, first, that it had jurisdiction to give preliminary rulings on the validity of an act adopted on the basis of provisions relating to the Common Foreign and Security Policy (CFSP).
The Court also found that there is nothing capable of affecting the validity of the decision or the regulation.
The Court stated further that the EU-Russia Partnership Agreement does not preclude the adoption of those acts. The Court held that the importance of the objectives pursued by the contested acts is such as to justify certain operators being adversely affected.
With the Council’s restrictive measures the in reaction to the crisis in Ukraine becoming progressively more severe, interference with Rosneft’s freedom to conduct a business and its right to property cannot be considered to be disproportionate, says the Court.
The Court also held that the terms of the regulation did not preclude an EU Member State imposing criminal penalties that are to be applied in the event of an infringement of the provisions of the regulation.
