The Court of General Jurisdiction of the European Union (EU) has rejected the suit by the National Settlement Depository (NSD). In it, the plaintiff requested the lifting of EU sanctions imposed in June 2022. The decision was published on the court’s website, with details provided by Bloomberg.
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The court concluded that the defenders of NSD (part of the Moscow Stock Exchange group) failed to prove that the EU Council imposed illegal sanctions against them. The decision can be appealed to the European Court.
EU sanctions destroyed the interdepository bridge between NSD and European depositories, leading to the freezing of multi-billion-dollar Russian assets held at the Belgian Euroclear and the Luxembourgish Clearstream. NSD filed a lawsuit and asked to lift the restrictions in the summer of 2022, and hearings on the case began only in January 2024. The Russian side wanted to prove the illegality and groundlessness of including the depositary on the EU sanctions lists and argued that not only Russian but also foreign investors had lost from this.
According to the European Court, the plaintiff failed to prove the unreliability of the grounds for imposing sanctions. They did not accept the argument that this led to the freezing of clients’ money, saying that there were no restrictions on them. Therefore, as the court said in a statement, NSD cannot request in a lawsuit the annulment of decisions on property rights that it does not possess.
Artem Kasumyan, a lawyer at the Delcredere Bar Association, explained in a commentary for Frankmedia.ru that the decision on the depositary may be useful for Russian investors.
“In light of established case law, the Court of Justice of the European Union has indicated that a plaintiff can only challenge a violation of his property rights, and not of the rights of third parties. Furthermore, due to the division of competences between the EU institutions and the authorities of the EU Member States, the Court of Justice of the EU cannot review the approaches of authorised bodies of the EU Member States (such as the Belgian Treasury and the Luxembourg Ministry of Finance),” the lawyer states.
He added that the court interpreted one of the rules of the EU Council Regulation broadly and refuted the position of the Belgian Treasury and the Luxembourg Ministry of Finance, which argued that it only allows the release of funds, but not securities. The court concluded that both securities and money are covered by this rule. Therefore, according to the lawyer, this interpretation opens the possibility of new requests for the release of assets from Russian investors.
The Moscow Stock Exchange group decided at the end of August to challenge the US sanctions, introduced in June 2024. They prepared an appeal to OFAC to clarify the use of general licenses when unfreezing assets.
Author:
Nikolai Tikhonov
Source: RB
I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.
