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12th Apr 2024

Feature

How elite Russians get off the EU blacklist

  • Russian foreign minister Sergei Lavrov (l) was blacklisted immediately after the invasion of Ukraine in 2022 (Photo: ec.europa.eu)
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Just eight people have managed to get off the EU blacklist in the past two years, most of them in out-of-court decisions involving friends in high places and EU passports.

The EU has imposed visa-bans and asset-freezes on 2,177 individuals and entities over Russian president Vladimir Putin's full-scale invasion of Ukraine in 2022 — and anti-EU litigation is booming.

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  • Russian racing driver Nikita Mazepin (Photo: nikitamazepin.com)

The EU courts in Luxembourg had seen 115 cases linked to Russia-war sanctions as of March, up from 97 cases in November, records showed.

The latest verdict, on 20 March, saw EU sanctions "annulled" against Russian Formula One racing driver and oligarch scion Nikita Mazepin.

Mazepin's Italian lawyers, Campa Avvocati, told EUobserver: "Clearly, our client and ourselves are very happy with this ruling, which we believe to be a proper exercise of justice".

"We hope that the Council of the EU will take the requisite steps to implement the Court's judgment so as to definitively remove all restrictions from our client as soon as possible", they said.

But despite his "annulment", Mazepin remained barred from entering Europe or making financial transactions there for now.

The EU Council first had two months and 10 days to decide if it wanted to appeal, prolonging the pain.

The Council could also re-blacklist Mazepin for slightly different reasons than before, requiring a whole new lawsuit to extract himself again.

"The [EU] Council is studying the [Mazepin] ruling and its implications and will take necessary measures", an EU official told EUobserver.

An EU Court of Justice (ECJ) spokesman said: "Any new decision concerning Mr Mazepin wouldn't be affected by Tuesday's [20 March] judgment, since the judgment was limited to assessing the legality of that particular decision before it".

Two Russians have been successfully delisted following EU court victories — tech baron Aleksandr Shulgin in September 2023 and financier Sergey Mndoiants in March this year.

But two others remained barred despite EU-court wins, giving the Formula 1 driver a 50-50 chance.

Violetta Prighozina (the mother of late Russian 'Wagner Group' mercenary boss Yevgeny Prigozhin) and Alexander Pumpyansky (the son of a Russian steel billionaire) won annulments, but have stayed blacklisted.

"The Council decided to renew the listing of Mr Alexander Pumpyansky [and Prigozhina] based on additional evidence and an updated statement of reasons," the EU official said.

And even if Mazepin's case ended happily one day, anti-EU lawsuits cost up to €500,000 in lawyers' fees and took some two years to run their course.

EU ambassadors at the Council in Brussels, which takes delisting decisions behind closed doors (Photo: consilium.europa.eu)

Out-of-court delistings

At the same time, six out of the eight successful EU sanctions-busters were delisted in out-of-court EU Council decisions, giving better odds and posing the question — what's their secret?

The lucky six included Russian energy billionaire Farkhad Akhmedov, an oligarch's ex-wife called Olga Ayziman, banker Grigory Berezkin, oligarch-sister Saodat Narzieva, and ex-tech boss Arkady Volozh.

The sixth one was a Slovak pro-Kremlin biker-gang chief called Jozef Hambálek.

When asked by EUobserver how they got off, the EU foreign service replied in sphinx-like terms.

"Member states agreed that the reasons to keep them on the list are no longer there. This is based on the deliberations and assessment in the relevant Council bodies, which are confidential," an EU spokesman said.

But at any rate, the lucky Russians, who all came from power families, also recruited expensive European lawyers.

Akhmedov and Volozh, separately, hired French law firm Wj Avocats, which declined to comment on their specific cases.

Ayziman and Narzieva were represented by French firm Carlara Avocats, who declined to comment.

Berezkin hired Belgian law firm Daldewolf, which also cited "professional secrecy".

However they pulled off their success, the EU imposed a rigorous ban on lobbying for Russian clients by European law firms or PR consultancies in May 2022.

But if Russians lodged an ECJ lawsuit, their EU attorneys were allowed to petition officials and diplomats in the EU Council in Brussels with letters pleading their clients' innocence, in what is called "presenting your arguments" in the "administrative phase" of litigation.

The letters were confidential, but examples from another (so far unsuccessful) Russian case seen by EUobserver contained both lengthy legal arguments and glowing character references.

And speaking generally about EU Council and ECJ practice, French lawyer William Julié from Wj Avocats said out-of-court EU delistings might come: "If you no longer meet the original criteria for being listed and your case could not be maintained before the court without a great legal weakness".

"In some cases, this means distancing yourself from the [Russian] regime," he added.

"This means more than just making statements — it means breaking ties with Russia more generally. If you still had a Russian business, but you criticised the war, based on past jurisprudence of the [EU] court, that wouldn't be enough," Julié said.

Pro-Russian EU prime ministers Viktor Orbán (l) and Robert Fico in Brussels in March (Photo: consilium.europa.eu)

Putin's EU friends

Putting aside their cases' legal or moral merits, several of the lucky ones also had friends in high places.

Hungary, led by Putin-friendly prime minister Viktor Orbán, had urged fellow EU states to delist Akhmedov in the Council's internal talks, for instance, EU diplomats said.

Orbán had also defended Narzyieva's family, diplomatic sources said.

Croatia quietly helped Berezkin last September, EUobserver's contacts added, while the pro-Russian Slovak prime minister Robert Fico bragged on TV about getting his biker pal Hambálek delisted in March.

The Croatian foreign ministry maintained EU omertà, saying: "Member states are not in a position to comment on the Council's deliberations, as these are subject to professional secrecy".

Hungary's foreign ministry never replies to this website.

But the delisting breakthroughs came even though Russia's efforts to cultivate EU friends got harder after Europe imposed its lobbying crackdown.

The European Commission cleaned out Russia-linked firms from its Transparency Register of lobbyists eligible to meet EU officials in 2022 and 2023, a commission spokesman told EUobserver.

It also issued a pan-European interpretation of its anti-Russia lobbying rules.

"Under EU sanctions, EU operators (or non-EU operators when doing business in the EU) are prohibited from providing lobbying services to the Russian government or Russian entities. Lobbying activities for persons on an EU sanctions list are likewise prohibited", the EU commission said.

"This prohibition applies to EU persons, on EU territory, or to business done in whole or in part in the EU," it added.

Andreas Geiger, from the Alber & Geiger law firm in Belgium, said: "Lobbying work for sanctioned Russians is currently indeed not doable".

"I don't know of anyone who does it in Brussels", he said.

But the EU fortress had back doors, Geiger indicated, such as letting blacklisted VIPs' Russian lobbyists visit EU capitals on their behalf.

"There's no extraterritorial effect of EU sanctions," said Geiger.

"What do you want to do to the Russian chap who flies in to Europe to lobby? Arrest him at the airport? Based on what? He's not even on a sanctions list himself," the German lawyer said.

And there were signs EU loopholes were being used.

One blacklisted Russian billionaire, Gennady Timchenko, for instance, has spent at least €14m on his (so far unsuccessful) anti-EU sanctions campaign, according to independent Russian newspaper Novaya Gazeta Europe.

But just €1m of Timchenko's anti-EU war chest went on lawyers, while he paid €13m for corporate lobbyists, Russian PR and media consultants, and "political technologists" — high-level spin doctors who reached out to European capitals, a Russian source said.

Russian financier Berezkin obtained Croatian citizenship six years before it joined the EU in 2013 (Photo: UnitedROV)

Golden passports

In three of the six out-of-court delistings, the lucky ones also had EU passports, posing another question — does that improve your chances?

Berezkin had Croatian and Russian nationalities.

"We can confirm that Mr Berezkin obtained Croatian citizenship in 2007 in accordance with Article 12 of the Croatian Citizenship Act," the foreign ministry in Zagreb said.

Article 12 says Croatian passports can be issued to a "foreigner whose acceptance to Croatian citizenship would be of interest to the Republic of Croatia" (because of a financial investment, for instance).

Hambálek is Slovak and Fico bragged of defending "our citizen".

Volozh, along with hundreds of other Russians, bought a Maltese passport for about €1.1m in 2016. Cyprus used to sell passports for €2m.

And if European citizenship was useful, then at least four other blacklisted Russians were eligible for EU passports because they were born in Europe.

The most senior one was Anton Vaino, a Kremlin chief-of-staff, who was born in Estonia. The others were Czech, German, and Lithuanian.

But for Julié, the French lawyer, EU passports weren't a silver bullet.

"EU nationality is a ground that has been raised in a number of applications for annulment, especially because freedom of movement is a fundamental right within the EU, but without success so far," Julié said.

And on one hand, the Hambálek case was an outlier, because the pro-Putin biker was a close friend of Fico, even though Hambálek had been blacklisted based on German intelligence that he'd created a paramilitary brigade in Slovakia, said Slovakia's former defence minister Jaroslav Naď.

"Hambálek and Fico socialised together. Fico also loved bikes," said Naď.

But on the other hand, the Slovak bromance still showed how EU politics skewed sanctions justice.

"I'm quite sure Fico blackmailed the EU, saying something like: 'If you want your €5bn for Ukraine, you'll have to take Hambálek off your list'," said Naď, referring to an EU deal on Ukraine funding in March.

"Nothing to do with successfully suing at the court of justice. But entirely political decisions, actively taken", said Geiger, the German lawyer, speaking of EU Council delistings more broadly.

Former Russian tech CEO Volozh (r) with Putin in Moscow in 2017 (Photo: Kremlin.ru)

Change of heart?

Some EU machinations went beyond national interests into geopolitics.

"The first desired aim of the sanctions is to actually achieve change of behaviour [by Russian VIPs]," an EU diplomat said.

A Ukrainian source said: "The EU told us that it [delisting Russian ex-tech CEO Volozh] was an experiment — they're trying to encourage a domino effect of similar actions among middle-sized [Russian] businessmen. The idea is to create an alternative Russian elite".

Volozh, who has left Russia, publicly denounced Putin last summer, prior to obtaining his EU relief. "Russia's invasion of Ukraine is barbaric and I am categorically against it", the ex-CEO of Russian tech firm Yandex said.

But Russians seen as traitors risked reprisals, amid recent attacks in Europe, such as the shooting of a Russian pilot in Spain in February after he switched sides to Ukraine.

Russian businessmen who made U-turns could "indeed" be at risk, said Robert Baer, a US writer on security affairs and a former CIA intelligence officer, "but they wouldn't be high on the list, like former [Russian] spies [who had defected]", he added.

Israel was the safest place to live for Russian exiles if they had Israeli dual-nationality, Baer said.

"Europe is out if you don't have a private security detail. Maybe the United States, but also with a security detail," he said.

And whether anti-EU cases cost €500,000 in lawyers' fees, €13m in lobbying, or €2m for an EU passport — that was cheap compared to the potential price of a political deal, Baer indicated.

"It's between $20m [€19m] and $30m a year: 16 guards at $200,000 each a year, but this doesn't include their travel, lodging, and food," he said.

And even then, Putin's targets remained "gettable" in the West, Baer said.

Meanwhile, getting delisted still left a long tail of petty travel-and-banking irritants.

The member state holding the EU Council presidency was meant to de-flag you in the Schengen Information System (SIS), which governs free travel in Europe.

But SIS glitches meant ex-blacklisted Russians risked being turned back at EU airports.

"Sometimes it's not so straightforward even if the travel ban is taken out of the SIS, because Schengen has no central control authority," said Julié, the French attorney.

Delisted Russians also had to carry round copies of their EU Council notification letters to un-cancel themselves at Western banks.

The eight fortunate ones aside, 13 other Russians have been deleted from the EU blacklist because they died.

But death didn't automatically give freedom from the EU's legal tentacles, in times of deep mistrust.

Those deleted included a dead Russian naval captain (Anton Kuprin), a deceased lieutenant general (Oleg Tsokov), and the late ultranationalist politician Vladimir Zhirinovsky.

But Russian mercenary boss Prigozhin, who died in a plane crash last August, has stayed blacklisted for now, an EU official said, "based on an assessment that there is a risk that his assets — if released — would be used to support the war".

"You never know if a guy like Prigozhin is really dead", an EU diplomat said.

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