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Russia Sanctions Survive A Key Legal Challenge And Georgia’s EU Bid Hangs By A Thread

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Welcome to Wider Europe, RFE/RL’s newsletter focusing on the key issues concerning the European Union, NATO, and other institutions and their relationships with the Western Balkans and Europe’s Eastern neighborhoods.

I’m RFE/RL Europe Editor Rikard Jozwiak and this week I’m drilling down on two issues: How the EU sanctions on Russia survived a big legal hurdle and whether Georgia’s EU dreams are slipping away.

Brief #1: A Big Day In Court For EU Sanctions

What You Need To Know: Last week, the European Union’s sanctions regime against Russia — and, to a lesser extent, its more minor measures targeting Belarus — cleared one of the greatest hurdles: the question of their own legality.

Since the full scale-invasion of Ukraine in February 2022, the bloc has imposed asset freezes and visa bans on 1,800 individuals and entities for what the EU calls “actions undermining or threatening the territorial integrity, sovereignty, and independence of Ukraine.”

The Belarus sanctions, which are a response to several incidents in recent years, cover nearly 300 people and companies linked to Alyaksandr Lukashenka’s regime, which has supported the Russian attack on Ukraine, and continues to crack down on Belarusian opposition and civil society since a flawed presidential election in 2020.

The inclusion of most of those blacklisted people is seemingly defensible — EU diplomats have told me that it is relatively straightforward to present a good legal case for them. These include politicians and officials who have taken decisions that support the war on Ukraine or the crackdown against the opposition, military leaders who have committed alleged atrocities such as the targeting of civilians and civilian infrastructure, and judges and prosecutors who have rubber-stamped the oppression of individuals.

However, EU diplomats know that the public officials targeted in Russia and Belarus, apart from “big fish” such as Presidents Vladimir Putin and Lukashenka and their closest entourages, are unlikely to travel to the EU or maintain considerable bank assets inside the bloc. It is, in other words, symbolic without much real political impact.

Deep Background: What matters more, however, are sanctions against businessmen, oligarchs, and their family members who are believed to be close to the Russian and Belarusian regimes. And it apparently matters to them, too — as European lawyers have challenged their inclusion on the blacklists in the EU’s own court, the European Court of Justice (ECJ).

Many of those individuals were slapped with sanctions in the spring of 2022 and have since had hearings before the Luxembourg-based ECJ. This fall, a number of verdicts will be issued.

This is a real challenge for the Brussels machinery, notably its legal services. Not only is the EU up against well-paid private-sector lawyers with rich clients, it must also present enough evidence linking these people to the regimes in question and, crucially, demonstrate that their support has contributed to the war in Ukraine or the crackdown in Belarus.

Essentially, the credibility and effectiveness of the EU’s entire sanctions regime are on the line. Few EU officials want to repeat the embarrassment of the bloc’s sanctions against former Ukrainian President Viktor Yanukovych and his inner circle, which have been eroded every year since 2014 by successful challenges before the ECJ. Judging by the slew of verdicts delivered by the ECJ on September 7, the EU is hoping they are on firmer legal ground.

Drilling Down:

  • The biggest decision against Belarus concerned sanctions against steel magnate Dmitry Pumpyansky and his spouse, Galina Pumpyanskaya. The bloc targeted Pumpyansky for his role as chairman of PJSC Pipe Metallurgic Company and as president of the Sinara Group — roles in which he had contributed with crucial supplies to state-owned enterprises, including Russian Railways and energy giants Gazprom and Rosneft.
  • When sanctioning Pumpyansky, the bloc pointed out that he had attended Putin’s meeting with 36 businesspeople shortly after the February 2022 full-scale invasion of Ukraine began “to discuss the impact of the course of action in the wake of Western sanctions,” adding that “the fact that he was invited to attend this meeting shows that he is a member of the closest circle of Vladimir Putin.”
  • Pumpyanskaya was sanctioned by virtue of being the chairwoman of the board of trustees at Sinara, a foundation involved in the charitable activities of large companies including PJSC Pipe Metallurgical Company. EU lawyers also reasoned that her marriage to Pumpyansky made her “a natural person associated with a leading businessperson involved in economic sectors providing a substantial source of revenue to the government of the Russian Federation.”
  • In its verdict, the ECJ upheld the EU sanctions against the pair and noted that “although Mr. Pumpyansky has not played a direct role in [the] military offensive in Ukraine, he is involved in economic sectors which constitute a substantial source of revenue for the government of the Russian Federation.” The evidence the EU gave linking him to the Russian oil and gas industry was also described by the court as “well-founded.”
  • Pumpyanskaya’s appeal was also dismissed due to her clear family and business ties to Pumpyansky. Being a family member of a sanctioned oligarch is not enough to be targeted per se, but a case can be built on evidence that a sanctioned person has potentially spread wealth to circumvent sanctions.
  • In a similar fashion, and on the same day, the court also dismissed the appeals of another Russian oligarch, Gennady Timchenko, and his wife, Yelena Timchenko. The former executive director of Russian tech giant Yandex, Tigran Khudaverdyan, also lost his appeal against the EU’s assertion that the company is a “key element in hiding information” about the war in Ukraine from Russians.
  • With respect to the Belarus sanctions, Mikhail Gutseriev, a Russian national with considerable energy and potash businesses in Belarus, also failed in his attempt to get delisted. The court didn’t contest the EU assertion that he is a longtime Lukashenka acquaintance “and thanks to this association has accumulated significant wealth and influence among the political elite in Belarus.”
  • All of these decisions appear to uphold two major pillars of the EU sanctions policy: You don’t have to be directly involved in the political decision-making process regarding the attack on Ukraine to be sanctioned, and family members of tycoons and oligarchs can very much be targeted.
  • This doesn’t mean that any and all attempts to get delisted are destined to fail. Two more rulings are expected this week, and many more will be issued this fall. A number of oligarchs are likely willing and able to have another go at trying to pick apart the EU’s legal reasoning.
  • Brussels didn’t have it all its own way last week. Aleksandr Shulgin, a former CEO of e-commerce company Ozon, won his appeal when the court concluded there was insufficient evidence that his actions at Ozon undermined Kyiv. As reported in an earlier briefing, EU ambassadors had already decided in July to lift sanctions against Shulgin, Farkhad Akhmedov, and Grigory Berezkin later in September after EU lawyers indicated the bloc was likely to lose those cases on appeal.

Brief #2: Will Georgia Miss Out On EU Candidate Status?

What You Need To Know: It is fair to say that Brussels reacted with incredulity at the latest move by the Georgian government to commence impeachment proceedings against that Caucasus country’s president, Salome Zurabishvili, for visiting foreign countries without government approval. It follows her visits to Brussels for talks with the European Council President Charles Michel on September 1 and then going on to meet with other state and government heads in the bloc.

Several diplomats I spoke to on background said they didn’t quite understand why a president of a country aspiring to join the EU and traveling on their own budget to lobby for their country was regarded as a bad thing.

With her perfect grasp of French and English, Zurabishvili is well respected in Brussels — and elsewhere in the EU. Her traveling to various member states this fall to drum up support for Georgia getting one step closer to EU membership is something Brussels officials regard as absolutely normal and to be expected. Or, as one EU official asked me with a slight air of despair: “This is sort of her main job, isn’t it?”

Deep Background: The big question for now is what consequences the impeachment proceedings will have on Georgia’s EU aspirations. Later in October, the European Commission will issue its annual enlargement report with recommendations on how to proceed with Georgia, as well as Moldova and Ukraine. In December, the 27 EU member states will vote either to endorse or reject those recommendations. (To endorse, according to the EU rule of unanimity, all members states have to agree.)

All indications so far from Brussels suggest Ukraine and Moldova, who are already candidate countries, will be recommended to proceed to the next phase — the start of EU accession talks. From talking to a number of EU officials on background, their impression is that all the EU member states appear to be on board, so it could happen by the end of the year. Both countries are progressing well with the conditions they received in the summer of 2022 and, crucially, there is domestic political will to move forward.

For Georgia, things have always been a bit vaguer. It is already one step behind Kyiv and Chisinau, as just a “potential” candidate country. Brussels hasn’t seen the same political enthusiasm for EU integration from Tbilisi as with the other two Eastern European hopefuls.

Controversial moves earlier this year — such as attempts to enact a foreign agent law, which was compared to a draconian Kremlin law, and the resumption of flights to and from Russia — have raised eyebrows in Brussels, as have comments from top government officials that it was NATO enlargement that triggered Russia’s invasion of Ukraine.

While not happy with what was sometimes perceived as a pro-Russian stance and not particularly receptive to the argument from Tbilisi that certain moves from Georgia might “open up a second front for Russia,” there was still an understanding among EU officials and diplomats that pressure from Moscow is keenly felt in the South Caucasus country.

Besides, foreign policy alignment with the EU was never one of the 12 recommendations given by Brussels in 2022 when it spelled out how the country should proceed on its EU path.

Drilling Down:

  • The latest drama surrounding Zurabishvili raises further questions as to whether Georgia is ripe for candidate status. “The bar for Georgia to proceed to candidate status is so low, yet they might not clear it in the end,” was one comment from an EU diplomat who has worked on the Georgia file for many years but wanted to remain anonymous because they aren’t allowed to speak on the record. Another Georgia-watcher in Brussels wondered aloud: “How many more own goals can they afford?”
  • In Brussels, several times I heard the claims — which so far have been mostly aired by opposition forces in Tbilisi — that the Georgian government actually wants to be denied EU candidate status so that it can blame Brussels and show to its voters that the EU is unreliable and never wanted Georgia onboard anyway.
  • The uncertainty over EU foreign policy chief Josep Borrell’s trip to Georgia on September 7-8 — his first to the country in this capacity — was also interesting to note. Normally these trips are announced well over a week in advance, but Brussels refrained from confirming the journey even after Zurabishvili’s supposed transgression. That sort of hesitancy could well speak volumes.
  • Despite all those misgivings, I still think it more likely than not that Georgia will get candidate status. Some diplomats have referred positively to the current momentum when it comes to EU enlargement, with the bloc seriously considering how a bigger group of members states might look. This window of opportunity exists now but might not next year when the EU is busy with European parliamentary elections and selecting new commission and council presidents.
  • Another consideration is that candidate status is low-hanging fruit. Bosnia-Herzegovina got the same status last year, without making much progress or significant reforms.
  • Then there is the argument (and still the most likely outcome) that in order to move to the next step — the opening of accession talks — Georgia will be offered candidate status but with conditions attached. These conditions could just be the continued implementation of what remains to be completed following the original 12 recommendations from 2022. After meeting with Zurabishvili, Michel posted on X, the platform formerly known as Twitter, about Georgia’s need to focus on “justice, de-polarization, de-oligarchization” as well as “building inclusive political culture” — all recommendations highlighted a year ago.
  • What’s clear is that the recommendations for Georgia are ambiguous, and it’s hard to categorically say whether they have been successfully followed. This gives the EU plenty of leeway. It wouldn’t be surprising if other conditions could be thrown in at the request of various member states, such as well-run parliamentary elections in the fall of 2024, for example, or the release for medical treatment of former President Mikheil Saakashvili, who is serving a six-year sentence for abuse of power, a charge he and his supporters say was politically motivated.
  • Ultimately, Georgia’s status can also end up being subject to inevitable political horse-trading. According to two European Commission officials speaking on the condition of anonymity, the EU enlargement commissioner, Oliver Varhelyi — a Hungarian with close links to the government of Prime Minister Viktor Orban — is keen to give Georgia a positive recommendation in October. In the end, it’s up to the entire college of European commissioners to decide, although they tend to be more enlargement-friendly.
  • Among member states, it’s also possible that Hungary, which has growing political links with Georgia, will push for Tbilisi’s candidate status as quid pro quo for agreeing to give Ukraine the green light to start EU accession talks. Budapest has used its veto extensively in recent months on various political issues, often related to Ukraine — so don’t rule out that this could happen again.

Looking Ahead

The big highlight of this week will be European Commission President Ursula von der Leyen’s State of the European Union address (known as “SOTEU” in Brussels-speak) to the European Parliament plenary in Strasbourg on September 13.

The speech, which is meant to mimic the U.S president’s State of the Union address to the American Congress at the start of each year, is seen as the opening of the fall political season in Brussels. This SOTEU is being eagerly anticipated, as it is the last one before the European Commission gets a new president and the European Parliamentary elections, both in June 2024.

In many ways, the SOTEU address can be seen as part of Von der Leyen’s campaign to secure another five-year term. Expect a lot of bold proposals on further support for Ukraine and ideas of how the EU should enlarge, maybe even with concrete timelines.

Later, on September 13, Belarusian opposition leader Svyatlana Tsikhanouskaya will address the European Parliament. It’s uncommon for a non-EU politician addresses the chamber, and it is even rarer that someone who isn’t a de facto head of state or government gets the honor.

The same day, the European Parliament is expected to pass a nonbinding resolution on Belarus, urging the EU — among other things — to adopt more sanctions against the Lukashenka regime, allow Tsikhanouskaya to take up empty seats previously occupied by representatives of the Belarusian authorities in EU-sponsored forums such as the Eastern Partnership, and provide support for those politically exiled Belarusians residing in the EU whose identity documents are about to expire and who have no means of renewing them outside Belarus.

That’s all for this week. Feel free to reach out to me on any of these issues on Twitter @RikardJozwiak, or on e-mail at [email protected].

Until next time,

Rikard Jozwiak

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