On 28 March, the Court of Justice of the European Union (‘ECJ’) held that the sanctions imposed by the European Union (‘EU’) against Rosneft, a Russian oil and gas group, are valid.

This judgment resulted from a dispute between Rosneft and the British government about the EU sanctions (restrictive measures) against certain Russian companies and the British implementation of those trade restrictions in its national regulations.

These sanctions were prompted by Russia’s actions in destabilising the situation in Ukraine, primarily the annexation of Crimea 2014. The sanctions were included, inter alia, in Council Decision 2014/512/CFSP, in the framework of the Common Foreign and Security Policy (‘CFSP’), and its implementation in Council Regulation (EU) No 833/2014. These include a prohibition on the export of certain products and sensitive technologies intended for the Russian petroleum sector, as well as restrictions against certain players in this market.

Rosneft, which has been subject to some of these restrictive measures since 8 September 2014, instituted proceedings against the sanctions before both the EU and British national courts. According to the British court, the request boils down to reviewing British measures that were adopted further to European regulations. But, the British court noted, Rosneft’s request also entails reviewing the validity of the measures taken by the EU. The British court found that it had no jurisdiction to rule on such a matter, and that a preliminary question would have to be submitted to the ECJ.

In principle, the ECJ does not have jurisdiction over the provisions of the CFSP which imposed the sanctions against Russia. Interestingly, however, the ECJ found that it did indeed have jurisdiction to determine the validity of decisions containing such sanctions. According to the ECJ, effective legal protection would be undermined if Member States were unable to submit preliminary questions about the validity of measures imposing sanctions. Moreover, the uniform application of EU law must be promoted. In its judgment, the ECJ held that there are no facts or circumstances that call the validity of the sanctions into question. The ECJ also held that Member States are not precluded from imposing criminal penalties for violations of EU-imposed trade restrictions.

We emphasise the importance of EU legal protection being open to the review of trade restrictions. The sanctions against Rosneft will remain in place for the time being, a fact which you will have to take into account. We would be pleased to assist you with any questions you might have about the Ukraine/Russia sanctions or sanctions law in general.