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“The team was recently visible advising on a number of pharmaceutical cases. Sources agree that the team is “moving in the right direction” and are particularly impressed by its work in the pharmaceutical sector”.

 

Any Transactions with the Persons, Who Fell under the Sanctions against Russia, Will Be Legally Questionable

30.09.2015

Dmytro Shemelin , Lawyer at Ilyashev & Partners Law Firm
Source: Interfax

Any transactions with the persons, whose assets were blocked by sanctions against the Russian Federation, will be legally questionable, thus, economic activity of such persons in Ukraine may actually stop. This opinion Dmytro Shemelin, lawyer at Ilyashev & Partners Law Firm, expressed to Interfax-Ukraine commenting on the implications of implementation of the decision of the National Security and Defense Council of Ukraine (NSDC) of September 2 on application of personal sanctions against the Russian Federation.

At the same time, according to the lawyer, regarding the mechanisms of implementation of the sanctions “the first thing you need to understand is that Ukraine has never introduced such sanctions before, so it is not clear yet how they will be imposed in practice”.

“Our government agencies have no experience in application of such sanctions. Moreover, the sanction bans were formulated both very strictly and very broadly. For example, a ban on disposal or use of property may be exposed to any business activity of the company, including payment of salary to employees, or use of own office or equipment. Another example is that “restriction, partial or complete termination”, which obviously can not exist concurrently, are introduced regarding flights of the Russian airlines”, he said.

“Thus, specification of sanctions is obviously put on the lower-level government agencies, creating a situation rather intense in every sense”, the lawyer underlined. Shemelin noted that the legislation will clearly not resolve a number of legal problems.

“The questions of the right of claiming loan under the agreement can become challenging: is it considered the asset? And, if so, whether the claim for payment of loan means “use or disposal of’ such asset? Is management by the Bank of Moscow of its Ukrainian subsidiary a kind of “use of asset”? Does the law on sanctions prevail over labor legislation, or employees of the companies subjected to sanctions will be able to further receive salary? What to do with the contracts concluded before imposition of sanctions – whether the contract subjected to sanctions can be executed? Must Aeroflot bring the passengers, whom the tickets were sold, to the place of destination and how it will be done?”- outlined the expert the range of problems.

Commenting on the possible consequences of the sanctions, D. Shemelin noted that “if the sanctions cause substantial harm to the Russian assets in Ukraine, we can expect a number of international lawsuits both in the European Court and in investment arbitration”.

“It is hard to imagine that the advisers of the President of Ukraine did not foresee such a possibility. Obviously, they counted, firstly, that the sanctions were temporary, and, secondly, that the sanctions were not completely unpredictable: they were adopted on the basis of law and in the interests of national security”, he said.

Further, the lawyer cited a number of problematic issues, inter alia “not too clear grounds for imposing sanctions”.

“If an international lawsuit is filed, Ukraine will have to prove the grounds for sanctions, i.e. for example, that The Russian National Commercial Bank OJSC (number 48 on the list No. 2) actually and objectively created a threat to the national interests, and it will have to be proved according to the international standards. It did not turn easy for our law enforcement agencies – it was illustrated by the history of removal of the European sanctions from our fugitive politicians”, he said.

At the same time, the lawyer believes that “in practice the severity of sanctions will be softened greatly most likely by a number of factors”.

 
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