Newsletter of the main news 09.09/15.09

1️⃣ Frozen Russian assets

The EU's policy of freezing Russian assets continues to gain momentum. The European Court of Justice has rejected an appeal by Russia's National Settlement Depository (NSD) to lift EU sanctions imposed in 2022 over its role in financing Russia's invasion of Ukraine. 

The amount of NSD's frozen assets in the Belgian depository Euroclear reaches EUR 70 billion. 

The court noted that NSD did not prove the EU's assessment of its systemic importance in the Russian financial system to be erroneous. The decision may be appealed to a higher court.

2️⃣ Shaping sanctions policy

At this time, the EU Council extended sanctions against Russia for another six months, until 15 March 2025. They target more than 2,200 individuals and organisations responsible for undermining Ukraine's territorial integrity, sovereignty and independence.

The EU is also discussing the possibility of extending sanctions against Russia for 36 months or indefinitely, in part because of the need to preserve frozen Russian assets for future reparations. However, this decision requires the consent of all 27 EU member states, which could complicate the situation due to Hungary's position. All of this comes amid demands from Washington to provide guarantees that frozen assets will remain frozen to avoid the need to go to Congress for funding. Time is limited, as the $50bn loan agreed by the G7 is linked to a future IMF tranche for Ukraine.

Meanwhile, the UK has imposed new sanctions on the shadowy Russian fleet, which exports oil and finances Moscow's military machine. Another 10 vessels have been sanctioned. Three vessels on the sanctions list - Nikolai Zuev, NS Asia and Zaliv Aniva - have transported more than $5 billion worth of Russian oil since the start of Russia's full-scale invasion.

In total, 25 ships of the shadow fleet are currently under sanctions. The United Kingdom claims that these sanctions have already deprived Russia of more than $400 billion in assets and revenues since February 2022, equivalent to four more years of funding for its invasion of Ukraine.

The United States is just a little behind in introducing new sanctions: it has imposed tougher sanctions against Russia in the IT sector, which have led to the withdrawal of some leading companies and services from the Russian market. For example, on 12 September, Google blocked the registration of accounts using Russian numbers and deprived bloggers of the opportunity to earn money through AdSense. Atlassian, Jira, Trello, and Confluence have completely withdrawn from the Russian market, while Notion and Miro services have become unavailable.

3️⃣ Implementation of sanctions policy

The imposition of sanctions is only half the battle; their effective implementation is equally important.

For example, Lithuanian customs officials fined two local companies EUR 10,000 each for violating international sanctions against Russia. The companies provided temporary storage, customs clearance and representation services for goods produced by sanctioned Russian companies, including thermal coal and isoprene rubber.

The United States arrested a man suspected of illegally selling laser welding equipment to the Russian state nuclear company Rosatom between 2015 and 2021. According to investigators, he collaborated with the Russian using false export documents to circumvent US export control laws. 

Also, the previously mentioned EU Court of Justice ruled that Russian oligarchs, including Mikhail Fridman, Peter Aven, German Khan and Gennady Timchenko, are obliged to declare their funds and property subject to freezing under sanctions imposed after Russia's invasion of Ukraine. The oligarchs tried to challenge these requirements, but the court rejected their arguments, noting that such measures are necessary to counter attempts to circumvent the sanctions and ensure their effectiveness.