The application of sanctions is a fairly common international legal politically motivated mechanism, which is usually used to counter the hostile influence of one state, its individuals and legal entities over another state.
The Law On Sanctions (hereinafter – “the Law”) has been in force since 2014 in Ukraine. The Law is aimed at protecting national interests, national security, sovereignty, and territorial integrity of Ukraine, countering terrorist activities, as well as preventing violations, restoring violated rights, freedoms and legitimate interests of citizens of Ukraine, the society, and the state. For this purpose, special economic and other restrictive measures may be applied to the group of persons defined by the Law. Specifically, sanctions may be imposed on foreign states, foreign legal entities, legal entities controlled by a foreign legal entity or a non-resident individual, foreigners, stateless persons, as well as entities engaged in terrorist activities.
A decision on the application of sanctions shall be taken by the National Security and Defense Council of Ukraine (hereinafter – “the NSDC”) and put into effect by a decree of the President of Ukraine. The application of sanctions must be based on the principles of legality, transparency, objectivity, relevance, and effectiveness. The Law lists a fairly large number of possible sanction types. Among them: blocking of assets – temporary restriction on a person’s right to use and dispose of assets owned by him/her; revocation or suspension of licenses and other permits, which are required to be obtained (held) to carry out certain activities; restriction on, or termination of, the provision of telecommunication services and use of public telecommunication networks, etc.
From a legal perspective, however, the Law gives rise to many questions in terms of its application, operation, and effectiveness.
First, the question arises whether it is legitimate to impose sanctions listed in the Law on Ukrainian citizens and legal entities. When taking into consideration Part 2 of Art. 1 of the Law, it is seemingly clear that the Law may be applicable to them only if they are classified as “entities engaged in terrorist activities.” However, this point is quite controversial, since the Law can be interpreted very broadly here. Moreover, the concept of “terrorist activity” is defined in the Law On Combating Terrorism and includes not merely the planning and implementation of terrorist acts, but also incitement, violence against individuals or organizations; organizing of illegal armed structures, criminal groups; recruitment, armament, training and use of terrorists; propaganda and dissemination of terrorism ideology; financing and other facilitation of terrorism, etc. Further, the Law On Terrorist Activities establishes criminal liability for the above mentioned actions in accordance with provisions of Art. 258 – 258-5 of the Criminal Code of Ukraine (deprivation of liberty, confiscation of property, prohibition to engage in certain activities, etc.). Measures of compulsion may be taken only by a court based on a judgement of conviction.
It should be remembered that Article 62 of the Constitution of Ukraine states that a person shall be presumed innocent of committing a crime and shall not be subjected to criminal punishment until his or her guilt is proved through legal procedure and established by a court’s judgement of conviction. The Law on Sanctions does not establish a procedure for finding a person guilty of crimes. There is also no mechanism in the Law to challenge such actions of the authorities. It is believed that a decision of the NSDC should be implemented without a court decision, as it is self-sufficient and provides a basis for executive authorities to comply with the imposed sanctions. The NSDC will need to prove that the decision to impose sanctions was made on legal grounds, only if the person subject to the sanctions applies to court. There is some uncertainty, however, as to the way the NSDC determines who should be sanctioned for terrorist activities in accordance with the Law On Sanctions and who should be punished in accordance with the Criminal Code of Ukraine.It is clear that, in a democratic country, sanctions cannot replace criminal liability, they must be imposed in proportion to the violations and have no political basis, otherwise principles of justice can be nullified.
Another issue that should be noted is the lack of a mechanism for the NSDC to monitor how other state bodies comply with its decisions.Currently, the Law does not specify who and how should report and control these processes, as well as record and report violations/attempts to violate sanctions by persons included in sanctions lists.
What are possible actions of persons included in sanctions lists?
If a person becomes aware of the fact that certain sanctions have been imposed on him/her based on the decision of the NSDC put into effect by a decree of the President of Ukraine, he/she may apply to the Supreme Court of Ukraine, since cases regarding appeals against acts, actions or omissions of the Verkhovna Rada of Ukraine, the President of Ukraine, have their specific aspects and are heard under the simplified litigation procedure in the Supreme Court by the panel of at least five judges of the Administrative Court of Cassation. It is for the Supreme Court to decide whether the NSDC interprets the provisions of the Law for the possibility of applying sanctions too broadly in some situations.
When a person has exhausted all available effective domestic remedies, in particular, after the case has been heard by courts of all instances in Ukraine, he/she may apply to the European Court of Human Rights (ECHR). An application may be lodged to the ECHR within a period of six months from the date on which the final decision was taken by a national court. The Court may deal only with those cases where the state represented by its bodies, institutions, organizations, officials or other public authorities has violated human rights or fundamental freedoms set forth in the European Convention for the Protection of Human Rights and Fundamental Freedoms and Protocols thereto, including the right to freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. When examining individual applications, the Court decides whether the State has actually committed a breach of its obligations undertaken under the Convention and Protocols thereto. Any decisions of public authorities must always be legally perfect and consistent with the approaches of the ECHR. Provided that the violation has been found, the Court takes appropriate measures.
Accordingly, if a person subjected to sanctions under the Law On Sanctions applies to the ECHR seeking protection of his/her violated rights, the Court will first have to determine whether the sanctions imposed on such person comply with constitutional standards and requirements and do not violate the person’s constitutional rights.It will also primarily assess the quality of the law under which the special economic and other restrictive measures have been imposed and whether it is precise, clear and foreseeable (§ 52 of the ECHR Judgement of 28 June 2001 in the case of VgT Verein gegen Tierfabriken Schweiz v. Switzerland).
Dr. Valentyn Gvozdiy
Managing Partner, Attorney at law, PhD
- The Legal 500 EMEA 2022
- Who’s Who Legal 2022