Newsletter of the main news 30.09/06.10

1️⃣ Frozen Russian assets

   More and more European leaders are making statements about financing Ukraine from frozen Russian assets. German Chancellor Olaf Scholz confirmed in his speech at the ‘public dialogue’ in Schwerin that a $50bn loan would be provided from these funds. He also stressed that European partners' support for Ukraine would remain unchanged.

   At the same time, Russian capital can still enter European countries. For example, the Bulgarian government still does not have accurate data on the volume of Russian investment in the country. Justice Minister Maria Pavlova told the Parliament that there are currently approximately 12,000 companies with Russian capital in Bulgaria, of which 4,492 own land plots. Pavlova noted that until 2018, there was no requirement to indicate the nationality of real estate buyers, which made it difficult to assess assets acquired by Russian citizens accurately.

   Since 2018, Russian investors have acquired 7472 properties, but there is no information on previous acquisitions. At the same time, Russian investment in Bulgaria has continued to decline since the start of the full-scale war in Ukraine. In the first half of 2024, the country recorded the largest outflow of Russian capital - €184.4 million, although Bulgaria has not yet imposed sanctions on Russian assets due to the lack of relevant legislation.

2️⃣ Sanctions against Russia

   The European sanctions policy is not slowing down. The EU ambassadors approved a new sanctions regime aimed at combating hybrid threats from Russia. According to Radio Liberty correspondent Ricard Jozwiak, the new mechanism will come into force this week. Earlier, the option of introducing a general sanctions regime was discussed, but in the end, the EU decided to focus on Russian hybrid threats. Currently, the sanctions list does not contain any specific names, but they are expected to be added later.

   The European Court of Justice also confirmed the legality of the ban on providing legal advice to the Russian government and organisations based in Russia. This decision is part of the sanctions imposed by the EU in response to Russia's aggression against Ukraine. Lawyers' organisations from Belgium, France, and the Netherlands filed a lawsuit against the ban, but the court dismissed their complaints, noting that the ban does not violate the right to judicial protection and applies only to consultations that are not related to litigation.

   The PACE adopted a resolution calling for sanctions against Russian propagandists and the recognition of the Russian Orthodox Church as an instrument of Kremlin influence. The resolution on propaganda and freedom of information in Europe was supported by 117 delegates, while 14 were against and five abstained.

3️⃣ Sanctions policy of Ukraine

   The HACCU ruled to partially satisfy the claim of the Ministry of Justice against M.E. Shelkov and PJSC VSMPO-AVISMA Corporation. The court imposed sanctions in the form of asset forfeiture in favour of the state. In particular, it concerns the claims of the companies controlled by Shelkov to Demurinsky Mining and Processing Plant LLC for a total amount of about USD 29 million and almost UAH 7 million. However, the court refused to recover the funds blocked in the bank accounts of VSMPO-AVISMA Corporation.

   Mikhail Shelkov is a Russian billionaire and former head of the investment division of the state-owned Rostec company. He is the owner of a controlling stake in VSMPO-AVISMA, the world's largest producer of titanium for the aerospace industry. Earlier, in January 2023, the HACCU ruled to seize part of the assets of Shelkov and his companies in favour of the state of Ukraine.

   Ukraine has launched a portal to track Russian offending vessels cooperating with the aggressor regime. The state-owned War & Sanctions portal has already registered 360 vessels involved in violating international sanctions and helping to build up Russia's military capabilities. A new section of the portal, created by the Defence Intelligence of Ukraine, is dedicated to the enemy's maritime logistics, providing detailed information about the offending vessels.

   These vessels play a key role in the transport of weapons, sanctioned goods and stolen agricultural products, and also export fossil fuels, the main source of income for Russia and its allies, to circumvent sanctions. The portal monitors cases of AIS shutdowns, ship calls to Russian ports, sanctions violations, and related companies and individuals. The GUR emphasises the need to sanction the vessels on the list, ban their calls to ports, territorial waters and international straits, and the sale of spare parts for them. 

   Earlier, the international ship registries of Liberia, Panama and the Marshall Islands launched a similar monitoring mechanism - the Registry Information Sharing Compact (RISC) database - to track vessels that change registration or owners to evade sanctions.