EU court rules in favour of Russian oligarchs Fridman and Aven in blow to sanctions regime

A top EU court has annulled the inclusion of billionaires Mikhail Fridman and Petr Aven on the bloc’s sanctions list, finding there was insufficient evidence the two oligarchs backed the Kremlin’s war against Ukraine.

The ruling is a big blow to the EU’s sanctions regime against Moscow, which has targeted more than 1,700 people and more than 400 entities, accusing them of supporting or enabling the invasion of Ukraine.

The EU’s General Court concluded that the EU did not present enough evidence to show the billionaires were involved in efforts to undermine Ukraine, potentially setting a precedent for other appeals.

The ruling referred only to the period from February 2022 to March 2023. The subsequent period is subject to other legal proceedings. The lifting of sanctions will require a decision by EU member states.

“We are carefully analysing the judgment and its legal and practical implications. It is up to the Council to decide whether it would appeal against the judgment,” said a spokesperson for the European Commission.

The court said there might be “a degree of proximity between Petr Aven and Mikhail Fridman and Vladimir Putin or his entourage” but added the EU had failed to “demonstrate that [the men had] supported actions or policies” that harmed Ukraine, backed key Russian officials, or benefited from their decisions.

Aven and Fridman are the most high-profile Russians to have a top court rule against their inclusion on the EU’s travel ban and asset freeze list.

They were both hit with sanctions on the grounds that they “supported actions and policies that undermine or threaten the territorial integrity, sovereignty and independence of Ukraine”.

“The General Court considers that none of the reasons set out . . . is sufficiently substantiated and that the inclusion of Mr Aven and Mr Fridman on [sanctions lists] was therefore not justified,” the court said.

The ruling was “very unfortunate”, said a senior EU diplomat.

EU sanctions against hundreds of Russians were drawn up rapidly in the days following Russia’s full-scale invasion, and some Brussels officials have privately admitted that evidence often was hastily assembled, including citing press coverage.

Rulings by the General Court can be appealed.

Three less well-known Russian businessmen had their sanctions lifted in September, and the EU dropped restrictions against tech founder Arkady Volozh in March. Volozh and eccentric fintech billionaire Oleg Tinkov, who won a challenge against UK sanctions last year, remain the only prominent Russian businessmen to offer vociferous criticisms of Moscow’s invasion.

Fridman, who was born in Ukraine, initially called the invasion a “tragedy” and said war “can never be the answer” but declined to speak out more forcefully against Putin, hinting at possible reprisals for doing so.

He returned to Russia in October, which people close to the oligarch said showed how misguided western sanctions policy had driven tycoons into Putin’s embrace despite their misgivings about the war.

Instead of criticising the war directly, Fridman and Aven convinced some prominent anti-war Russians to sign letters backing the lifting of EU sanctions against them.

Leonid Volkov, chief of staff to the late opposition leader Alexei Navalny, later said he regretted signing the letter.

Following the decision, Volkov said the ruling was “very, very bad” because it showed oligarchs could defeat the sanctions without going against the Kremlin.

“Fridman and Aven didn’t say a word in public about the war and didn’t go into conflict with Putin,” he wrote on social media. “What signal is the court sending to Putin, his friends, and Russian oligarchs?”

Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center in Berlin who studies Moscow’s elite, said the Kremlin had encouraged oligarchs to challenge the sanctions in court in the hope of setting a legal precedent against them.

“The problem is the sanctions mechanism was not transparent,” she said. Had that been the case, the EU could have extracted war condemnations from Russian businessmen in exchange for sanctions relief. “But since there is a court decision they have no reason to do that.”

Fridman made millions in oil and telecoms, banking and retail in Russia before his arrival in London nearly a decade ago, where he and his partners set up Mayfair-based investment group LetterOne.

The UK and EU imposed sanctions on Fridman and Aven, as well as their partners German Khan and Alexei Kuzmichev, in the early weeks of Russia’s full-scale invasion of Ukraine in 2022.

The oligarchs were forced to cede control over LetterOne and moved to sell their stakes in Alfa-Bank, their biggest Russian asset.

Limited to a spending allowance of about £2,000 a month under the UK sanctions and facing an investigation from the UK’s National Crime Agency, Fridman struggled to pay for the upkeep on Athlone House, the £65mn mansion he owns in Highgate.

Fridman, who also has an Israeli passport, returned to Moscow shortly after the NCA dropped the last of three charges against him.

He and Aven, who holds a Latvian passport and lives in Latvia, declined to comment.