On shaky grounds: The secret, slipshod evidence the EU uses to sanction Russian oligarchs

The apology from the European Council’s president to a sanctioned Russian oligarch was unexpected.

A confidential dossier provided by the European Union was utilized to support the freezing of Viatsheslav Moshe Kantor’s assets, revealing his nationality to be “Jewish/Russian.”

In April 2022, the 70-year-old billionaire, who previously led Acron, a Russian fertilizer company, resigned as the president of the European Jewish Congress due to sanctions imposed by the EU and the United Kingdom. He is a citizen of Russia, the United Kingdom, and Israel.

The designation “Jewish/Russian” could be a mistaken reference to a Soviet-era ethnic classification, but several scholars commissioned by Kantor’s lawyers found it to be an antisemitic description that should not have been included in an official document.

“We sincerely regret the error,” reads a July 2022 letter seen by POLITICO to Kantor from the Cabinet of Charles Michel, president of the European Council, the intergovernmental branch of the EU. The evidence packet, it noted, “has been rectified.”

The embarrassing slip-up isn’t an exception. It’s indicative of the slipshod nature of the evidence used by the EU as it seeks to put pressure on those close to Russian President Vladimir Putin following his full-scale invasion of Ukraine.

During the investigation for this article, POLITICO was able to view five of the “working papers” that the Council used to support their decision to impose sanctions on Russian business leaders, officials, and their family members.

The packets — labeled as “LIMITE,” an internal EU classification that indicates they are not to be shared with the public — run to dozens of pages. They consist of a description of the legal basis for the sanctions, a summary of the justification and a short biography of the individual, followed by the evidence supporting the accusation.

Although the documents are labeled as confidential, the evidence they are based on is far from being so.

One evidence packet relies on 10 open-source links with varying degrees of reliability. Another on nine. Another on four. They include articles from publications like the Financial Times and Reuters but also rely heavily on machine-translated articles from Russian or Ukrainian sources of varying credibility. One packet, for example, cites an article published by a lifestyle magazine affiliated with the Russian government, which has been accused of propaganda and that publishes more cooking recipes than serious journalism. Another cites a thinly sourced website dedicated to the dubious affairs of rich Russians.

The packets include information from Forbes magazine and Wikipedia about the person being targeted for sanctions. Being listed on the U.S. oligarch list, which identifies 100 individuals deemed as “oligarchs” by the Treasury Department, is seen as proof of misconduct, even if not all individuals on the list have actually been sanctioned.

The packets provide insight into the EU’s use of questionable evidence in making decisions on sanctions, such as freezing assets and prohibiting travel into the bloc. This leaves the bloc open to potential legal challenges.

There is little disagreement among Westerners that the EU’s sanctions against nearly 1,600 individuals involved in the Russian invasion are justified. However, both legal representatives for those sanctioned and independent experts agree that the burden of proof required is surprisingly low, considering the serious repercussions.

According to Viktor Winkler, a German lawyer who specializes in sanctions but does not have any Russian clients, being sanctioned is a form of civil death as it greatly restricts one’s ability to participate in economic activities.

Winkler stated that he does not possess a yacht and therefore does not sympathize with those who do. He added that, being from a working-class background, he is content with his circumstances.

“It is indeed a problem,” he stated. “We have established this sanction mechanism, which is an extremely powerful tool. However, the manner in which [the EU] is utilizing this tool is no longer acceptable.”

Frenetic pace

The evidence packet used to sanction Kantor in 2022 is 64 pages long and includes eight articles and websites, six of which are machine-translated versions of Russian originals. The bulk of the packet is made up of screenshots of entire articles, with relevant passages highlighted in yellow.

Two of the pieces, featured on the Russian online platform Rambler and news source Vecherniy Murmansk, are marked as “advertisements” or “paid advertisements” on their respective websites – a detail that was not mentioned in the provided evidence. The research paper also erroneously states Kantor as a shareholder of Acron, rather than a beneficial owner. This legal distinction suggests a variation in the level of active control an individual has over a company.

The packet states that he has publicly expressed his support and friendship for Vladimir Putin multiple times, and has a positive relationship with the Kremlin. This means that he has been receiving support and benefits from Russian leaders who were involved in the annexation of Crimea and the destabilization of Ukraine.

Kantor has challenged the decision to sanction him at the Council and the General Court in Luxembourg, the branch of the Court of Justice of the European Union that hears complaints from individuals. His lawyers dispute that he’s close to Putin, according to filings seen by POLITICO, arguing that he had only met the Russian leader on the fringes of events.

The European Union (EU) has implemented punitive measures for many years. However, although the evidence presented has greatly improved over time, there was a noticeable decline as the EU quickly imposed sanctions on numerous individuals in response to Putin’s large-scale attack. According to Michael O’Kane, a lawyer from Peters & Peters in London who has represented those who have been sanctioned, this decline was evident.

According to O’Kane, while the British foreign office typically relies on reputable sources when imposing sanctions, the EU is more inclined to use information from social media, blogs, or opposition leaders.

He stated that if you choose to deviate from reputable journalistic sources, you must thoroughly investigate the credibility of the sources you plan to use for information.

A diplomat from a European Union member state stated that sanctions were being decided upon rapidly, with a small team of employees from their country working at least 12 hours a day for the past year to gather new evidence and enhance existing packets.

In March, a collective of attorneys, several of whom act on behalf of wealthy Russian individuals, released a public statement expressing discontent with the data utilized by the EU.

The authors stated that numerous people have been included on lists solely using information found through a basic Google search, often from unreliable sources such as online tabloids or anonymous blogs. They argue that this preliminary work is flawed and has resulted in inaccurate sanctions being placed on individuals due to misrepresentations, false statements, and discrepancies in the information.

‘Russian crimes’

To impose a penalty on an individual, an EU member state collects evidence and shares it with the European External Action Service (EEAS), the diplomatic branch of the bloc. The EEAS then presents the evidence to representatives from all 27 EU countries at the Council for a majority vote. There is no official review process, and the countries involved in selecting the targets are also responsible for enforcing the penalty. Every six months, EU ambassadors decide through mutual agreement whether to renew the list in its entirety. However, apart from Hungary’s attempts to remove certain names for political motives, there has been minimal discussion on this matter.

Individuals facing sanctions have the option to request a reassessment from the Council, although this course of action has a low success rate. According to a source familiar with private discussions, Estonia, Lithuania, and Poland are hesitant to remove individuals from the sanctions list in order to maintain pressure on Russia. The number of people who have been delisted from the EU’s sanctions list is minimal, with the majority being due to their passing away.

The EU’s General Court allows a target to contest the decision, but this procedure is both lengthy and costly. Furthermore, even if the judges decide to lift sanctions, there is nothing preventing EU officials from compiling another set of evidence and imposing sanctions once again, as seen in the cases of Violetta Prigozhina (mother of Yevgeny Prigozhin, former leader of the Wagner mercenary group), and former Ukrainian President Viktor Yanukovych and his son Oleksandr.

Kantor’s legal team asked for his removal from the list of sanctions last year, but their request was promptly denied.

In a letter dated September 15, 2022, the EU institution responded to your client’s lawyers by stating that your client’s designation was unjustified and that you allege the Council relied on unreliable evidence. The Council, however, disputes this claim and emphasizes that it used multiple and credible sources of information.

As a part of their reply, authorities created a second set of evidence to support the decision to keep Kantor on the list of sanctions. This packet consisted of 30 pages and included 17 sources, such as a hyperlink to his Wikipedia page.

When questioned about whether a Wikipedia article could be used as evidence for imposing sanctions, the EU diplomat expressed concern. They stated that there is no universal agreement on what would be considered acceptable, but also noted that the article would need to be of high quality.

During discussions at the General Court, Bart Driessen, the lawyer representing the Council, often emphasizes that the responsibility for collecting evidence lies with the EEAS rather than his institution.

During a legal dispute with Russian businessman Grigory Berezkin in July, Driessen had to clarify to the judges the reasoning behind the Council’s decision, which relied on an article attributed to an AI bot named “Carmen.”

He was also questioned about the use of a website, known as “Russian Crimes,” that appeared to have been authored by fictitious journalists and was referenced by the Council in their legal responses to complaints regarding the decision to impose sanctions.

Using a reverse image search on Yandex, it has been discovered that one of the profile pictures of the supposed authors belongs to a model based in New York. Additionally, it seems that the other profiles use stock photos.

According to Driessen’s statement to the court, Russia is a challenging country to obtain press information from. He also mentioned that it is extremely challenging to find information in Russia and was unable to provide additional details about his sources.

Drissen, while outside the courtroom, chose to not share any information. He informed POLITICO that he does not communicate with journalists and that the Council is cautious about such interactions.

In the past month, the Council decided to take Berezkin and two other Russian entrepreneurs off of their list of sanctioned individuals.

I’ll see you in the courtroom.

Up to this point, a total of 95 challenges have been made to the EU Russia sanctions, including Kantor’s, at the General Court.

In a highly publicized instance, Prigozhina successfully appealed in March when the court determined that simply being related to a prominent ally of Putin was not sufficient reason for her inclusion on the list.

The court decision mentioned that there was old information included in her evidence package. The Council’s judgment was partially influenced by her ownership of Concord Management and Consulting LLC, a business started by her son. However, the court discovered that she had not been the owner since 2017.

In a groundbreaking event in March, Nikita Mazepin, a 24-year-old driver, who had been sanctioned since March 2022, received a temporary lift of his sanctions to compete in Formula 1 races. He recently had his initial court hearing on September 11, and according to his lawyers, he has a strong possibility of winning when the verdict is announced in the coming months.

In the first round of rulings, announced in early September, seven out of eight Russian entrepreneurs were unsuccessful in their legal battles.

It is too soon to determine the number of individuals who will succeed in challenging the sanctions. However, according to Winkler, approximately one third of challenges to sanctions in previous years have been successful.

“According to Winkler, any court ruling in favor of an oligarch is always seen as a triumph in Russia and can be exploited for their propaganda purposes. This is my main criticism: the already complex and sensitive legal matter is further mishandled due to amateurish actions.”

When questioned by POLITICO, the Council did not provide comments on specific cases or confidential documents, instead directing further inquiries to its website.

The Council carefully reviews the decisions made by the European Union’s Court of Justice and implements any necessary actions to follow them, as stated in a released statement. Additionally, individuals who are listed are regularly given the opportunity to share their observations with the Council. If the reasons for their listing are no longer valid, the Council will remove them from the list.

Up to this point, the European Union appears mostly untroubled by the legal obstacles.

Jovita Neliupšienė, Deputy Foreign Minister of Lithuania, emphasized the importance of maintaining confidence in ourselves during an interview in Vilnius. She stated that the sanctions against certain individuals are significant and those who support the regime or promote war may hire top lawyers, but that does not mean we should doubt our decisions.

The representative from a European Union member state stated it more directly: “The greater the challenges to the listings, the higher the standard the court will set. In order to be proactive, we must gather more and more evidence. The more evidence we have, the stronger our case becomes.”

Shifting criteria

The Council has been closely observing the events and making changes to its sanctions policy as needed.

The EU’s most recent set of penalties, approved in June, expanded the scope of potential subjects to encompass relatives of influential businesspeople. Additionally, the criteria for targeting has changed from solely focusing on leaders in particular industries to encompass any businessperson operating in those industries, or influential businesspeople in Russia overall.

“According to our understanding, this shift in strategy is unlike any other seen in the past for EU sanctions,” stated Sven De Knop, a legal expert at Sidley Austin law firm.

In an effort to ensure the effectiveness of the sanctions, the Council distributed a document that appears to cover all aspects of Russia’s economy as proof of support.

The 248-page file, titled “LIMIT” and viewed by POLITICO, is intended to “act as proof for the inclusion of certain economic figures, such as entrepreneurs, executives, and managers, along with their relatives and other individuals involved in business operations within the Russian Federation [sic]… by demonstrating the business climate and economic conditions in which they operate.”

Similar to the evidence package, the file is based on information that appears to have been quickly collected from the internet. This includes a spreadsheet, translated by DeepL, containing the Russian Federation’s 2020 budget, a hyperlink to the Wikipedia page for Russia’s RTS stock index, and screenshots of Russian export statistics websites. These screenshots also feature targeted advertisements for FlirtFinder, prompting users with messages like “voel je je alleen?” (are you feeling lonely?) and winter parkas.

The report contains errors and missing details, such as important excerpts labeled as “to be added.”

“It is difficult to fully comprehend the true nature and significance of this document,” stated a lawyer representing sanctioned individuals from Russia in an email.

The attorney observed that the Council released a statement in June explaining its decision to expand its criteria for sanctions. The statement stated that the Council had determined that there is a mutual beneficial and supportive relationship between the Russian government and prominent business individuals in Russia.

The lawyer stated that currently, it is akin to interpreting ambiguous signs, but one logical assumption could be that this outcome is due to the purported evaluation carried out by the Council.

The lawyer remarked, “If that’s true, it’s difficult to determine whether to find it amusing or upsetting.”

Reporting was contributed by Barbara Moens and Jacopo Barigazzi.