In light of the proceedings held on 23 January 2024 at the European Court of Justice on the claim of the National Settlement Depository (NSD) requesting the lifting of EU restrictive measures, RBC approached the founder of L&P with a series of questions on the legal nature of sanctions, political context of the EU Council’s decision to impose restrictive measures on NSD, and the impact of this decision on the Russian stock market.
Alexander Linnikov explained that introduction of restrictive measures by the EU Council in respect of NSD is a politically motivated decision aimed not as much at abridging the rights of NSD and its clients than at undermining the stability of the Russian stock market as a whole.
“Prominent European lawyers, and even the EU Court in some of its acts, note that the EU Council substitutes the preventive nature of sanctions with punitive measures,” — says Alexander Linnikov, although “according to the original design of the European legislator, the goal of restrictive measures was to change the behavior of sanctioned persons, not penalize them. However, in reality, it turned out to be the other way around. Moreover, some European politicians are starting to lose patience and openly acknowledge the intention to ‘make suffer’ not only the Russian state and key financial institutions of Russia, including NSD, but also ordinary private investors from Russia. Thus, any kind of fairness or any real economic justification for the ‘freezing’ of assets in which the share of NSD’s own funds is negligible, is out of the question,” — states the founder of L&P.
While answering questions on prospects of NSD’s lawsuit in the EU Court of Justice, Alexander Linnikov noted: “Our firm has substantial successful experience of challenging sanctions against Russian nationals in the EU Court of Justice. Therefore, we are not completely disappointed in the European justice and usually view the prospects of contesting sanctions with cautious optimism. However, in the NSD case, such optimism is hardly appropriate. The court will face a dilemma: to lift sanctions against NSD and thereby compromise the policy of a systemic blockade of the Russian stock market and isolation of Russian private and institutional investors, or to uphold the position of the Council, thereby acknowledging the de facto punitive nature of sanctions and casting serious doubt on the principle of inviolability of private property in Europe. We can only hope that the Court will follow its own practice and try to clearly divide the goals and objectives of the sanctions’ regime from the political rhetoric and ‘side effects’ in the form of harm to the interests of thousands of private investors from Russia“.