UPDATE 3: EU court says sanctions against Russia’s Rosneft justified

(Adds details in paragraph 4)

LUXEMBOURG, Mar 28 (PRIME) -- The E.U. Court of Justice on Tuesday found the E.U. sanctions imposed on Russian oil major Rosneft justified, and said that restrictions do not cover banking transactions.

The court said that the clarification of justification of these measures lies within its jurisdiction, and said that there are no elements that could put into question the 2014 decision of the E.U. to introduce sanctions against Rosneft. The sanctions also do not contradict the E.U.–Russia cooperation accord, as actions of the E.U. Council were valid.

The court also said that the E.U. would have used the term different from “financial assistance” in its restrictions if it had wanted all banking transactions of Rosneft to seek additional requests for permission. Thus, the goal of the introduction of sanctions is not to freeze assets of the company or to limit transactions of funds, the court said.

A representative of the U.K. Foreign and Commonwealth Office told PRIME that London fully supports the E.U. sanctions demonstrating the willingness of Europe to ensure fulfillment of the Minsk agreements by Russia.

Lode Van Den Hende, a partner at legal firm Herbert Smith Freehills who represented Rosneft in the case, said that the company is not allowed to appeal against the decision, at least not in this particular court. He also said that the decision is disappointing.

RESPONSE OF ROSNEFT

Rosneft thinks that the E.U. court’s decision is illegal, ungrounded and politicized. “The decision proves that supremacy of political trends is coming to Europe to replace the supremacy of law. The court found the sanctions valid even despite the fact that the E.U. failed to provide reasons for introduction of sanctions against the company,” Rosneft said in a statement.

The company insists that it made no illegal actions in any jurisdiction, and it has no relation to the crisis in Ukraine. “The court failed to explain how restrictions that were imposed after Crimea joined Russia relate to issues like access of oil companies to international financial markets, oil production on the Arctic shelf, and development of tight hydrocarbons, deep-sea and shale fields,” the company said.

The company still thinks that the sanctions were aimed to increase risks for its business and to hinder implementation of important projects, thus creating preferences for other players of the oil market. Rosneft plans to continue protection of interests of its shareholders, including protection from the impact of sanctions, with every legal instrument possible.

“The court also paid no attention to the fact that the sanctions inflict economic damage on European partners of Rosneft that produce technological equipment and on European banks and investment funds that cooperated with Rosneft under credit agreements and that wanted to invest in development of the Russian oil industry,” the company said.

Rosneft filed a suit to the U.K. High Court of Justice against Her Majesty's Treasury, the U.K. secretary of state for business, innovation and skills, the Financial Conduct Authority for the E.U. sectorial sanctions imposed on Russia, legitimacy of actions of the U.K. taken in compliance with the sanctions, as well as for the E.U. Council’s sanctions decisions in general.

The U.K. court in February 2015 requested the E.U. Court of Justice form a position on the sanctions.

In May 2016, an advocate general of the E.U. court recommended it approve legitimacy of the sanctions against Rosneft and approve measures of the U.K. taken to fulfill the sanctions. The advocate general believed the restrictive measures included payments by banks and prohibited provision of international certificates for shares that had been issued before introduction of the sanctions.

End