The European General Court of Justice has lifted parts of the EU sanctions on Alexander Shulgin, the former head of the Russian online retailer Ozon. This outcome is reflected in the court’s judgment dated September 6.
The court partly accepted the challenge to the sanctions list. It found that while the businessman could be legitimately included under the restrictions, it was not justified to keep him subject to the full measures for the entire period originally imposed.
The sanctions on Shulgin will stay in place for at least two more months. During that interval, the European Council retains the option to appeal the ruling.
How did Shulgin become subject to sanctions?
Shulgin was placed under European sanctions on April 8, 2022. The European Council described him as a leading businessman and the CEO of Ozon, Russia’s dominant e-commerce platform. On February 24, 2022, he participated in a meeting with President Vladimir Putin alongside other prominent business figures to discuss actions related to sanctions imposed by Western nations.
Three days after the sanctions were issued, Shulgin resigned from his role as chief executive and board member of Ozon. Later, the European Council updated the rationale in the sanctions text, calling him the former president of Ozon, while keeping the clause that links him to sectors that provide a major income source for the Russian state.
Shulgin challenged the assessment that he could be viewed as a strong business leader. The court ruled in favor of the defense on this point, finding that the legality of the decision could not be fully proven by the accused.
Who had been sanctioned previously?
This case marked the first instance where EU sanctions on a businessman were lifted due to the actions taken during the Ukraine conflict. Previously, the court had only annulled restrictions for relatives of entrepreneurs. For example, sanctions were removed from Evgeny Prigozhin’s mother, Violetta, and partially from the son of Dmitry Mazepin, the former head of Uralchem, who was allowed to engage with Formula 1 participants and earn income from races.
In March 2022, the United States Treasury placed sanctions on a subsidiary of Ozon Bank, a financial institution linked to the retailer. The bank was added to sanctions lists due to its ties with Sovcombank. The company later announced its intention to request delisting in light of its severed ties with Sovcombank.
In July, England lifted sanctions on Oleg Tinkov, founder of Tinkoff Bank, who had previously renounced his Russian citizenship. The United States and the European Union did not impose sanctions on Tinkov.
Who could not object to the sanctions?
On September 6, the European Court rejected several challenges brought by major Russian entrepreneurs against the sanctions restrictions. The defeated claimants included Dmitry Pumpyansky, former owner of the Pipe Metallurgical Company; Gennady Timchenko, head of the Volga Group; Mikhail Gutseriev, founder of the Safmar group; and Tigran Khudaverdyan, former CEO of Yandex. A later development saw Arkady Volozh, co-founder of Yandex, apply to EU authorities seeking removal from the sanctions list, while publicly opposing the military actions in Ukraine.
Today, many Russian businessmen remain subject to sanctions, with some of the wealthiest individuals continuing to face restrictions, including Petr Aven, Mikhail Fridman, and Andrey Melnichenko.