“The European Court of Human Rights recognized that Ukraine violated the rights of the national company M.S.L., against which sanctions were imposed by the NSDC in 2015. The ruling of the ECtHR became the first decision in practice regarding Ukrainian sanctions and demonstrated the need for changes in the state’s approach to justifying and revising such decisions. By the decision of the National Security Council, approved by the then President Petro Poroshenko”, — write on: ua.news
The European Court of Human Rights recognized that Ukraine violated the rights of the national company M.S.L., against which sanctions were imposed by the NSDC in 2015.
The ruling of the ECtHR became the first decision in practice regarding Ukrainian sanctions and demonstrated the need for changes in the state’s approach to justifying and revising such decisions.
The decision of the National Security Council, approved by the then President Petro Poroshenko, regarding “M.S.L.” blocking of assets, prohibition of currency transactions and restrictions on financial activities were introduced.
The basis for this was the conclusions of the SBU, which claimed that the company is controlled by Russian citizens and is involved in the illegal gambling business. However, the management of “MSL” denied any connections with the Russian Federation and emphasized the lack of evidence for such claims.
Ukrainian courts refused the company to satisfy the lawsuits, referring to the lack of authority to evaluate the decisions of the president and the National Security Council on the merits.
The ECtHR, after considering the company’s complaint, established that Ukraine froze its assets without specific grounds, thereby violating the right to property guaranteed by Article 1 of Protocol No. 1 to the European Convention on Human Rights, as well as the right to an effective remedy under Article 13.
The Court emphasized that formal references to national security cannot be a justification for interference with property rights without proper justification. According to the conclusion of the ECtHR, the Ukrainian authorities did not provide any evidence that “M.S.L.” was really controlled by citizens of the Russian Federation or posed a threat to the security of the state.
Thus, the grounds for sanctions are recognized as unfounded.
Despite the fact that the company demanded more than 1.2 billion hryvnias in compensation and 5 million euros in moral damages, the court limited itself to ascertaining the violation on the part of Ukraine, considering this in itself as compensation for moral damages.
At the same time, the decision directly indicates the need to create a mechanism that will allow to effectively challenge sanctions in Ukrainian courts, and not just formally check the procedures for their introduction.
Lawyers note that this decision can have a significant impact on the further sanctions policy of the state, in particular in the era of President Volodymyr Zelenskyi, when sanctions are actively used against Ukrainian citizens and companies.
Elvira Lazarenko, a partner of the legal association “Barristers”, emphasizes that the practice of the ECtHR is a source of law, therefore Ukrainian courts – primarily the Cassation Administrative Court and the Grand Chamber of the Supreme Court – must react appropriately and develop approaches to the actual review of sanctions decisions.
We will remind, lawyer, partner of Barristers Oleksiy Shevchuk reported that the European Court of Human Rights recognized that freezing the assets and stopping the activities of LLC “M.S.L.” is an interference with the right to peaceful possession of property.
We also previously reported what the ECtHR expressed in the first decision against Ukraine regarding the application of sanctions.
